The ARC Costs team was recently approached by a paying party facing an unusual and highly challenging situation. A bill of costs had been served over a decade after the original costs order was made, raising significant legal and procedural concerns. The firm requested that ARC Costs assisted in the preparation of Points of Dispute.

The case stemmed from a Committal Application initiated by the Claimant in 2011 following a judgment that required the Defendants to repay a debt. After various legal proceedings, the matter concluded with a final hearing in August 2012.

Fast forward to 2024, the receiving party unexpectedly served a bill of costs upon the paying party totalling £104,118.77.

ARC Costs were therefore instructed to challenge the validity of the bill and the conduct of the receiving party.

The rules under CPR 47.7

CPR 47.7 outlines the specific time periods for commencing detailed assessment proceedings, depending on the source of the right to such assessment. The rule emphasises the importance of timely action in costs assessments to ensure fairness and prevent undue delay.

Generally, if the right arises from a judgment, order, award, or other determination, the receiving party must file a Notice of Commencement within 3 months of that date.

If the assessment is stayed pending an appeal, the 3-month period starts once the stay is lifted.

For cases involving discontinuance under Part 38, the 3-month period begins after the service of the notice of discontinuance or the dismissal of an application to set aside the notice.

When the right to costs arises from accepting to settle under Part 36, the 3-month deadline begins on the date the right to costs arose. This typically the date of acceptance of a Part 36 Offer. These strict deadlines ensure timely resolution of costs issues, preventing unnecessary delays.

Case study: 12 year delay in commencing detailed assessment 

The most pressing issue in the aforementioned case was the extraordinary delay in serving the bill of costs. Under CPR 47.7, detailed assessment proceedings must be commenced within three months of the final order.  Service can however, be effected after this date, but there are no automatic sanctions unless the Paying Party has applied for an Unless Order to enforce service of the Bill.

The Receiving Party in this instance missed this deadline by 11 years and 9 months, severely prejudicing our client.

Over such a lengthy period, memories had faded, documents were lost or destroyed (especially given GDPR compliance and the litigants’ status as persons unfamiliar with legal processes), and the overall ability to mount a robust defence was compromised.

In addition to this, the orders provided by the receiving party were neither signed to indicate consent nor sealed by the court. This raised serious doubts about the terms that were actually ordered. In the absence of a sealed order, there was no clear authority to claim the costs.

Furthermore, the paying party was uncertain as to whether any costs were truly owed, particularly given the ambiguous and contradictory nature of the orders from 2011 and 2012.

The paying party contended that the 12-year delay amounted to misconduct under CPR 44.11. This rule allows the court to disallow all or part of the costs being assessed if the conduct of a party or their legal representative was unreasonable or improper.

Given the unreasonable delay, the paying party argued that the receiving party’s conduct fell squarely within the scope of CPR 44.11 and warranted the court’s intervention to strike out the bill entirely.

ARC Costs also argued that the claim was time-barred under Section 24(1) of the Limitation Act 1980, which prevents actions from being brought upon a judgment after six years from the date it becomes enforceable. Given that the matter concluded in 2012, the 2024 bill was well beyond the permissible time frame, further supporting our request to strike out the bill.

To strengthen our position, the Paying Party relied on the Court of Appeal decision in Weston & Anor v Weston & Ors [2006] EWCA Civ 42. In that case, the bill of costs was served 18 years after the substantive matter had concluded. The court found that the paying party had been significantly prejudiced by the passage of time and disallowed the costs on the grounds of misconduct.

Drawing parallels to our case, although the delay here was 12 years instead of 18, the resulting prejudice was similar.

In Weston, the Court recognised that such excessive delays undermine the ability of the paying party to challenge costs effectively, which aligns closely with the circumstances our client faced.

How Can ARC Costs Assist?

ARC Costs are a highly experienced team of Costs Lawyers and Costs Draftsmen. We can assist in recovering or disputing legal costs whether you are the paying or receiving party.

As independent costs experts, we can alternatively be instructed by the paying party to settle Points of Dispute and to minimise the costs claim be made against them.

We 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.

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