Serving a bill of costs by e-mail
“The provisions of the CPR for service upon a solicitor, for service by email and for service to the right postal address should be familiar to every solicitor who conducts litigation..”.
Master Leonard, Gregor Fisken Limited v. Bernard Carl
There have been two cases recently concerning the service of a bill of costs by e-mail: Serbian Orthodox Church – Serbian Patriarchy v. Kesar & Co, and Gregor Fisken Limited v. Bernard Carl.
In both cases the receiving party had obtained a Default Costs Certificate after the paying party had failed to serve Points of Dispute. However, in both cases the receiving party had failed to comply with the rules surrounding service.
These decisions are a salutary reminder that under PD 6A the party to be served by “electronic means” must have indicated in writing to the party serving that they are willing to accept service by that method, and service is only valid if sent to the nominated e-mail address(es).
In Kesar, the parties had agreed to accept service of documents by e-mail, which was a good start. However the solicitors for the Church then sent the bill of costs to a different e-mail address than the one nominated by Kesar & Co.
On Appeal the High Court upheld the Senior Costs Judge’s decision that this was not good service.
However, the High Court found there was good reason (under CPR 6.15 and 6.27) that the steps taken to bring the bill of costs to the attention of Kesar was good service. Foxton J reached that conclusion for the following reasons:
i) It is clear on the evidence that the documents to be served were sent to an email address which Kesar had used, and which was set up not to notify senders that the email was no longer in use or to direct them to a different email address, but automatically to forward the documents to the address which was in use.
ii) The documents were received through the agreed mechanism for service, and, short of opening the email (which Mr Kesar did not do before the DCC was entered), it would not have been possible for Kesar to know whether the notice of commencement had reached that email box because it had been sent there directly or forwarded in accordance with the arrangements Mr Kesar had put into place.
iii) This was in a case in which the served documents not only reached the party to be served, but did so by service to an email address which was set up to receive electronic service of documents such as the notice of commencement, and which ought to have been monitored to that end.
iv) By reason of its arrival at that email address, the document reached Kesar by a means from which, had the email been opened, it would have been obvious this was an attempt at formal service.
v) I accept that validating service involves prejudice to Kesar, but that prejudice is of a very different kind to, for example, loss of a limitation defence. The prejudice in question is that there has been a default assessment of its costs liability, unless it is able to show “good reason” for setting the DCC aside.
Unfortunately for Kesar & Co, they were then unable to demonstrate good reason to set aside the Default Costs Certificate of £222,256.85.
The Claimant obtained a Default Costs Certificate in the sum of £510,889.61 after the Defendant failed to serve Points of Dispute.
However the Claimant’s costs specialists had failed to effect good service in spectacular fashion.
Master Leonard observed, “…the Claimant attempted to serve upon the wrong person, by the wrong method, simultaneously serving by post to the wrong address. All of these errors could have been avoided with a little diligence.”
The Master was asked to consider whether to exercise discretion to retrospectively authorise service under CPR 6.27.
While it was reasonable to conclude that the bill of costs came to the Defendant’s attention, that factor alone was insufficient.
The Master commented “…that the Claimant has not taken reasonable steps to effect service in accordance with the rules. The provisions of the CPR for service upon a solicitor, for service by email and for service to the right postal address should be familiar to every solicitor who conducts litigation, and as I have said the multiple errors made in purporting to serve the Defendant could have been avoided with a little diligence.”
There was also substantial prejudice to the Defendant who was facing a costs liability of over £500,000 due to procedural irregularity.
For those reasons the application under CPR 6.27 was refused and the Default Costs Certificate was set aside.
The Practice Direction for the electronic bill of costs states:
5.1A Subject to paragraph 5.1B, whenever electronic bills are served or filed at the court—
(a) they must be served or filed in hard copy, in a manageable paper format as shown in the pdf version of Precedent S; and
(b) a copy of the full electronic spreadsheet version must at the same time be provided to the paying party, or as appropriate filed at court, by e-mail or other electronic means.
How can one comply with the Practice Direction if the paying party does not accept service by e-mail? Answers on a postcard.