Application “Without Notice” Criticised by Costs Judge

 

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ARC Costs recently assisted a Receiving Party Claimant on a case whereby a Nil assessment Order was received, stating that the Claimant had failed to request an Provisional Assessment following an Unless Order. We were successful in having the Nil Order set aside, as well as the Unless Order stating that the Claimant was compelled to set down for Detailed Assessment under CPR 47.14.

 

Facts of the Case

The case was in relation to a housing disrepair matter which settled by way of a Consent Order in the sum of £6,000 plus the costs of repairs and reasonable costs to be paid. The Claimant Solicitors therefore instructed ARC Costs to prepare the Bill of Costs and to assist with Detailed Assessment proceedings.

ARC Costs prepared and served the Bill of Costs alongside a Notice of Commencement, with Points of Dispute due within 21 days service of the same.

The representative for the paying party contacted ARC Costs and requested a fourteen day extension for serving Points of Dispute, which ARC Costs agreed to. Two further extensions were later requested by the paying party and agreed by ARC Costs.

It was later agreed that service of Points of Dispute via email would be acceptable to give the Paying Party further time to prepare, and the Points of Dispute were received via email. This was the last communication received by ARC Costs on behalf of the Paying Party.

In the subsequent period, it was considered negotiations remained ongoing and Points of Reply were not prepared to save on costs for all parties.  Despite chasing a response to an offer, the Paying Party made an application without notice for an Unless Order to strike out the Bill of Costs for failing to apply for assessment. This Order was for the Claimant to file the matter for provisional assessment, failing which, the Claimant’s Bill of Costs would be struck out. Within the N244 application notice, the Paying Party requested that the application not be served on the Claimant by the Court.

An Unless Order was subsequently made by the Court stating;

“(i) Unless the Claimant requests provisional assessment hearing within 21 days of service of this Order, the detailed assessment proceedings shall be dismissed, the Claimant’s costs shall be assessed at nil and the Claimant shall pay the Defendant’s costs of the detailed assessment proceedings to be assessed if not agreed on the standard basis;

(ii) The Claimant do pay the Defendant’s costs of this application summarily assessed in the sum of £600;

(iii) This Order was made without a hearing. Any party can apply to have it varied or set aside within 7 days of the date of service of this order;”

At the point of the application being made, neither ARC Costs, nor the Claimant Solicitors were ‘put on notice’ of the threat of any such application despite the requirements of CPR 23.4. Neither the Solicitor nor ARC Costs were provided with a copy of the Unless Order made by the Paying Party, and as the Court had been requested to make the order without notice, the Court had not sent the document (the expectation being service would be effected by the Applicant Paying Party).

In the interim period, ARC Costs had continued to chase for progress in the matter and had served Points of Reply, to no response from the Paying Party.  As such, ARC Costs applied for a provisional assessment without knowledge that an Unless Order had previously been made.

By this time however, the timescales set out in the Unless Order had expired, unbeknownst to the Receiving Party and ARC Costs.

The Defendant Solicitors subsequently provided a copy of the Unless Order via email several months after it was made.  This was the first time the Receiving Party had been “served” with the Unless Order.

It later came to light that the Defendant had written to the Court on multiple occasions requesting that the Bill of Costs and Detailed Assessment proceedings be dismissed in light of the Receiving Party failing to comply with the Unless Order obtained. The Paying Party had failed to copy any representatives of the Receiving Party into this correspondence to the Court in a flagrant breach of CPR 39.8.

ARC Costs made repeated attempts to communicate and negotiate with the Paying Party in order to reach a settlement as to the costs matter.

Subsequently, the Claimant’s Solicitors received an Order which stated;

“Upon the Claimant having failed to request provisional assessment in accordance with Order of 25 October 2022;

i. the detailed assessment proceedings are dismissed;

ii. the Claimant’s costs are assessed at nil;

iii. the Claimant shall pay the Defendant’s costs of the detailed assessment

proceedings to be assessed if not agreed on the standard basis;”

Following a string of communication with the Paying Party’s representatives, it was finally confirmed by them that they had made an “application without notice” and no justification was made as to why this type of application was made, contrary to the specifications of CPR 23.4(1).  A copy of the application was initially refused to be provided, and this only followed after further requests were made.  Even at this point full disclosure was not provided, and the full contents of documentation lodged/correspondence with the Court only followed in a ‘drip-fed’ method over the course of several days.

 

ARC Costs’ Application & Submissions 

ARC Costs were instructed to make an application set aside the Paying Party’s Unless Order.  Consent was sought, but was not agreed to and therefore a contested application was required to be made.

In our submissions, reference was made to CPR 23.4, which states that the Paying Party must make the application on notice, unless otherwise specified by a Rule, Practice Director or Court Order. No such Order had been made permitting the application to be made without notice, and CPR 47.14(2) does not permit the application to be made without notice.

Furthermore, we argued that, even if a “without notice application” had been permitted, pursuant to CPR 23.9 (2), it should specifically have been served by the Paying Party unless the Court Ordered otherwise. On considering the Unless Order made, there was no such provision.

On receipt of a copy of the Paying Party’s application after several requests, it was noted that the copy of this application specifically stated that no other party should be served with the application, and the letters “N/A” were included in response to Question 9 as to any service address for the application.

In light of the above, we put forward the submission that the Paying Party’s conduct was one of persistent breach of the CPR and overriding objective, but could, with reasonable objectivity, be categorised as egregious opportunism. 

 

Outcome of the Application

The Paying Party continued to pursue the matter to a contested application hearing however, hours before the hearing was due to take place, a somewhat underwhelming offer was received on the Bill of Costs.

On our advice that the application to set aside the Unless Order had good prospects, the offer was rejected and the matter proceeded to the contested hearing.

Ultimately, the Judge agreed that the Orders obtained by the Paying Party had been obtained in an inappropriate and unreasonable manner. He also confirmed that they had breached CPR 23.4, 23.7 and 23.9, as well as 39.8(1), and the Defendant Solicitors were heavily criticised for such actions.

The Judge considered Paragraph 43 of Denton, and granted relief from sanctions, and the Receiving Party were also permitted to recover the costs of the application on the indemnity basis.

 

How can ARC Costs Assist in Application “Without Notice” Disputes?

ARC Costs have a team of experienced Costs Draftsmen and Costs Lawyers who can assist in all types of inter partes application disputes, including those which involve an application “without notice.”

As independent experts, we can be instructed be either of the Paying or Receiving Parties in a dispute, to advance the strongest possible submissions.  If a party has acted unreasonably and failed to comply with the relevant rules to obtain a costs-related order, we strongly recommend you get in contact with a costs expert to ensure the correct order is made.  Failure to act promptly can result in lesser prospects of being able to set the order aside. 

To find out about how we may be able to help you, please speak to one of the team by calling us at 01204 397302 or  email one of our experts at info@arccosts.co.uk

 

 

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