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Following litigation in England and Wales, the losing party is usually ordered to pay the legal fees of the successful party. The process of assessing the costs and deciding how much the losing party has to pay is called the detailed assessment process.
The regulations for detailed assessments are detailed in Part 47 of the Civil Procedure Rules,
The first step is for a bill of costs to be prepared. It is a document that details the work done by the solicitor and any disbursements paid, including expert fees, court fees, and counsel fees.
The bill is sent to the paying party. It can be sent on an informal basis, or costs litigation can be commenced.
Detailed assessment proceedings should be commenced within 3 months. There may be penalties for a failure to do so.
The bill of costs is served along with;
Points of Dispute allow the paying party to dispute any items in the bill. It can be a point of principle, for example, proportionality, or it may be in respect of a particular item, for example, the time spent preparing a document.
The paying party must serve points of Dispute within 21 days. Failure to do so may result in the costs being allowed as claimed.
Default costs certificate can be obtained when the Points of Dispute are not served within 21 days. The Request for the Default Costs Certificate is sent to the court along with a copy of the bill and court fee.
The amount of the bill is claimed in full, plus the court fee and a fixed fee for preparing the request.
A party can request to set aside the default costs certificate. Any application must be made promptly, supported by evidence. A copy of the bill of costs, and the draft Points of Dispute should accompany the Application.
The default costs certificate will only be set aside if there is “a good reason” to do so.
The Replies are the opportunity to respond to any objections raised to the costs in the Points of Dispute.
They should be limited to points of principle and concessions only. They must not contain general denials, specific denials, or standard form responses.
A detailed assessment hearing is the equivalent of a trial in costs litigation. It can be either a paper assessment or a hearing in person. This depends on the value and complexity of the matter.
A detailed assessment hearing should be requested within 3 months of serving the Notice of Commencement. There may be penalties if the hearing is not requested in time.
Bills that total less than £75,000 are assessed using a Provisional Assessment. It is a paper assessment, and the parties do not attend court.
The court will assess the bill using the issues raised in the Points of Dispute and the Points in Replies.
After the assessment, the bill is returned to the parties along with a Notice from the court. The parties recalculate the bill and agree on the amount of the provisionally assessed bill.
If a party is unhappy with the decision by the court, they can request an oral hearing. It must be made in writing, within 21 days of receipt of the Notice from the court. The request must identify the item(s) they wish to be reviewed and provide an estimate for the hearing length.
The court then lists the matter for an oral hearing.
The party who requested the oral hearing will be responsible for the costs of the hearing, unless they obtain an adjustment of more than 20% of the provisionally assessed sum. In practice, the parties will undertake a costs/benefits analysis to decide whether to request a hearing.
When the bill totals more than £75,000, or is deemed unsuitable for provisional assessment, a detailed assessment hearing is listed. An advocate represents the parties in court. Their case is presented based on the Points of Dispute and Points in Reply.
At the end of the hearing, the parties recalculate the bill of costs based on the decisions made.
The receiving party is entitled to the costs of the hearing unless the court orders otherwise.
The provisions in the CPR Part 36 apply to detailed assessment proceedings. The receiving party will not recover their costs if they fail to recover more than any Part 36 offer made by the paying party and may be responsible for their costs.
The costs of the detailed assessment are usually summarily assessed at the end of the hearing.
For assistance with the legal costs or for more information on the detailed assessment process, please contact enquiries@chantrycosts.co.uk
The information is intended for guidance and should not be considered legal advice.