Provisional Assessment: Peaceful process
Following the Pilot Scheme under CPD 51E and the implementation of the Jackson reforms, new rules came into play on 1 April 2013 which means claims for costs which total £75,000 or less (CPR 47.15(1)) are assessed on the papers and neither party is required to attend a Detailed Assessment hearing.
Here I will outline the basics of the Provisional Assessment process for receiving parties and comment on how to ensure you have the best chance of passing through the process smoothly and successfully. Efficiency in this process is especially important because the recoverable costs are capped at a maximum of £1,500 plus VAT, plus Court fee (CPR 47.15(5)).
In order to commence the assessment process you will need to serve (as per CPD 5.2 supplementing CPR 47.6) the following documents on the paying party:
- Notice of commencement in Form N252;
- A copy of the bill of costs with signed certification;
- Relevant details about any additional liabilities;
- Copies of the fee notes of Counsel and of any expert in respect of fees claimed in the bill;
- Written evidence as to any other disbursement which is claimed and which exceeds £500;
- A statement giving the name and address for service of any person upon whom the receiving party intends to serve the notice of commencement.
While not a requirement you may decide to serve all fee notes and vouchers to avoid potential queries/ arguments later on. It is our practice to annotate the disbursement vouchers in the Assessment Bundle with the corresponding item numbers in the bill for ease of reference.
Points of Dispute
The paying party’s objections to the bill of costs “must be short and to the point” (CPD 8.2) and insofar as practicable they must:
“(a) identify any general points or matters of principle which require decision before the individual items in the bill are addressed; and
(b) identify specific points, stating concisely the nature and grounds of dispute.”
It is quite common to see objections to particular items which simply say “excessive” or “unreasonable”. We take the view such objections do not comply with (b) above and we have been successful in persuading the Court on Provisional Assessment to strike-out such objections.
It should also be remembered that the paying party is required to “state in an open letter accompanying the points of dispute what sum, if any, that party offers to pay in settlement of the total costs claimed.”
There is usually no good reason why a paying party cannot pay at least this amount on account of costs.
Replies to Points of Dispute
Once Points of Dispute have been received Replies to Points of Dispute can be prepared pursuant to CPR 47.13. Remember that CPD 12.1 & 12.2 supplementing CPR47.13 confirms that Replies “must be limited to points of principle and concessions only. It must not contain general denials, specific denials or standard form responses”.
Although a number of judges have expressed dismay at seeing receiving parties providing standard responses to the Points of Dispute our experience shows us that a concise response can be necessary to justify the costs or explain why the objection is wrong. Indeed some Judges have taken the absence of a response as an indication that the objection is accepted! Although optional we would always advise serving Replies as this could be the only opportunity to respond to the objections on Provisional Assessment.
Request for Provisional Assessment
Assuming the parties have been unable to reach agreement the next step would be to request a Provisional Assessment by completing the relevant Form N258 in accordance with CPR 47.15 (3). The form is self-explanatory. The following documents should be provided:
- The document giving the right to Detailed Assessment (i.e. Sealed Court Order or acceptance of a Part 36 offer);
- The Notice of Commencement (Form N252);
- The Bill of Costs;
- Points of Dispute;
- Replies (if any);
- Statement of parties;
- Relevant details of any additional liability claimed;
- Copies of all the orders made by the Court relating to the costs of the proceedings which are to be assessed;
- Any fee notes of Counsel and receipts or accounts for other disbursements relating to items in dispute;
- (Where there is a dispute as to the receiving party’s ability to pay) the client care letter delivered to the receiving party or legal representative’s retainer.
In cases where Provisional Assessment applies:
- An additional copy of the bill, including a statement of the costs claimed in respect of the Detailed Assessment based on the assumption that there will not be an oral hearing; and
- The offers made (those marked ‘without prejudice save as to costs’ or made under Part 36 must be contained in a sealed envelope, marked ‘Part 36 or similar offers’, but not indicating which party or parties have made them).
In order to assist the Court we usually prepare an indexed, paginated bundle. This will ensure the Judge can easily work through the documents saving Court time and making for a simpler assessment. In our experience Judges have little patience for disorganised paperwork!
On receipt of the Request for Provisional Assessment it is within the Court’s discretion to decide that the claim is unsuitable for Provisional Assessment. In our experience this can occur where there are significant issues of principle, arguments over conduct or if relatively large items such as insurance premiums are in dispute. If you feel the Court (or you) would benefit from oral submissions, invite the Court to invoke its discretion when you file the Request.
Once the Provisional Assessment has taken place the Court will send the assessed bill of costs to both parties with a Notice stating that any party who wishes to challenge any aspect of the Provisional Assessment must file and serve a written request for an oral hearing within 21 days. If no request is filed within this time the assessment will be binding on the parties “save in exceptional circumstances”.
If you do wish to challenge the Provisional Assessment your request should identify the items you wish the Court to review at an oral hearing and provide a timescale for the hearing (CPR 47.15(8)).
You should bear in mind CPR 47.15(1) states that any party which has requested an oral hearing will be responsible for the costs of an incidental to that hearing unless:
“(a) it achieves an adjustment in its own favour by 20% or more of the sum provisionally assessed; or
(b) the court otherwise orders.”
The review can sometimes be an uphill struggle: you will usually appear before the Judge who conducted the Provisional Assessment, and have to try to convince them they were wrong (or at least not wholly right!).
Also note the costs limit of £1,500 no longer applies once an oral hearing has been requested.
Costs of the assessment process
The receiving party will be entitled to the costs of the Detailed Assessment process except where the Court makes some other order.
CPR 47.20(3) states – “In deciding whether to make some other order, the court must have regard to all the circumstances, including –
“(a) the conduct of all the parties;
(b) the amount, if any, by which the bill of costs has been reduced; and
(c) whether it was reasonable for a party to claim the costs of a particular item or to dispute that item.”
However, clearly any offers the paying party has made, and whether those offers have been ‘beaten’ will be highly relevant. Part 36 is modified in CPR 47.20 in order to apply to costs proceedings. An early, sensible Part 36 offer can expose the paying party to risk and bring rewards if not accepted.
 These notes deal with the procedure assuming the receiving party has an order or deemed order for costs. If not then ‘costs only’ proceedings will be required under CPR Part 8 pursuant to CPR 46.14.
 It should be noted that CPD 9.5 (3) supplementing CPR 44.6 confirms that the statement of costs should follow as closely as possible Form N260 and must be signed by the party or the party’s legal representative.