Case Study: £115,000 Bill of Costs Reduced by 50% Before Detailed Assessment
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Recovering or challenging legal costs is rarely just about the figures on a Bill of Costs. A successful outcome often depends upon identifying procedural issues, understanding proportionality and adopting the right strategy throughout the detailed assessment process.
This case demonstrates how early technical analysis and robust negotiation enabled ARC Costs to achieve a significant reduction in a substantial Bill of Costs before the matter reached a contested hearing.
The background
ARC Costs was instructed to act for the paying party following the conclusion of a Central London dispute that had proceeded all the way to trial.
The claimant was awarded damages of £17,914.20.
Following judgment, the receiving party served a Bill of Costs seeking recovery of £115,051.
Given the level of damages awarded, the value of the Bill immediately raised concerns regarding proportionality. Whilst costs will often exceed the damages recovered in certain cases, particularly where matters are hard fought or legally complex, the level of costs claimed must still be reasonable and proportionate when viewed in the context of the litigation as a whole.
Our client therefore instructed ARC Costs to review the Bill and advise on the prospects of successfully challenging the costs claimed.
Identifying the key issues
A detailed review of the Bill identified several issues that warranted challenge.
First, we considered that the overall level of costs claimed was disproportionate to the nature and value of the dispute.
Secondly, the matter had proceeded on the Multi-Track, yet the Bill had been presented as a traditional three-column Bill rather than in Precedent S format. Given the applicable procedural requirements, we considered this to be a significant issue that should be raised during the assessment process.
In addition, our review identified extensive claims for fee earner time which, in our view, exceeded what could reasonably be justified by the work undertaken.
Rather than focusing on isolated entries, we assessed the Bill as a whole, identifying patterns of excessive time recording and considering how those issues would be viewed during detailed assessment proceedings.
A strategic approach to the dispute
Having reviewed the Bill in detail, ARC Costs prepared comprehensive Points of Dispute, setting out the challenges to both the overall value of the claim and the individual items within the Bill.
The receiving party subsequently served Replies, maintaining much of its original position.
Despite negotiations, the receiving party was unwilling to reduce its claim below £85,000.
Given the significant difference between the parties’ respective positions, the matter proceeded towards a detailed assessment hearing, which was listed for a full day before the Senior Courts Costs Office (SCCO).
Throughout this period, we continued preparing the case on the basis that the hearing would proceed, ensuring that every aspect of the dispute had been fully analysed and that our client was in the strongest possible position.
Settlement before the hearing
As the detailed assessment hearing approached, negotiations continued.
With the hearing imminent and both parties having fully prepared their respective cases, the receiving party ultimately agreed to compromise.
The matter settled for £57,500 inclusive.
This represented a reduction of approximately 50% from the original Bill of Costs.
Importantly, the settlement also included the receiving party abandoning its claim for the costs of the detailed assessment proceedings together with any interest that would otherwise have been sought.
Avoiding a contested hearing not only produced a substantial financial saving but also eliminated the additional time, cost and uncertainty associated with a full day before the SCCO.
The outcome
The final settlement delivered significant value for our client.
Key outcomes included:
- The original Bill of Costs of £115,051 was reduced to £57,500.
- The receiving party accepted a reduction of approximately 50%.
- No additional detailed assessment costs were recovered.
- Interest was not payable.
- The matter settled before the listed SCCO hearing, avoiding further litigation costs.
The client was delighted with the outcome, having substantially reduced its costs exposure whilst avoiding the expense of a contested assessment hearing.
Why this case matters
This case illustrates the importance of obtaining specialist costs advice at an early stage.
A Bill of Costs should never be accepted at face value simply because it has been served following a successful claim. Careful scrutiny can often identify procedural issues, disproportionate claims or excessive time recording that justify significant reductions.
Equally, successful costs disputes are not always won through contested hearings. Thorough preparation, robust Points of Dispute and a clear understanding of the strengths of a case often encourage sensible commercial settlements before a hearing takes place.
At ARC Costs, we regularly advise paying parties on challenging substantial Bills of Costs, whether through negotiation or detailed assessment proceedings. By combining technical expertise with a commercial approach, we help clients minimise unnecessary costs exposure whilst achieving practical, cost-effective outcomes.
This matter is an excellent example of how careful analysis, strategic preparation and effective negotiation can produce an outstanding result without the need for the court to determine the dispute.
ARC Costs can be contacted via email at info@arccosts.co.uk, or by telephone on 01204 397302. For more information on legal costs, please find out more about our speciality areas of expertise and our services on our legal costs page.