Background

ARC Costs were recently instructed by a Litigant in Person Paying Party who had received a Bill of Costs in the sum of £12,277.50 in a debt related dispute. The client was concerned about the size of the bill and sought our assistance in preparing Points of Dispute and negotiating a settlement.

Our Approach

The team at ARC Costs carried out a detailed review of the bill and identified multiple items that were either unreasonable, excessive, or not recoverable under legal costs recovery rules. Based on our assessment, we advised the client to make an initial offer of £6,000 to the Receiving Party.  Items of concern included the hourly rates being significantly in excess of the guidelines, excessive time claims and general duplication between fee earners.  On a proportionality basis, the costs were overall a concern as the dispute had resolved within 12 months, and were in relation to a debt of a little over £10,000.

The Receiving Party rejected this proposal, describing it as “ridiculous” and asserting that the Paying Party’s offers were pitched too low. They ultimately made the decision to proceed to a Detailed Assessment Hearing necessitating ARC Costs to prepare Points of Dispute to protect the Paying Party’s position.  Points of Reply were subsequently received but did not assist in narrowing the issues, and so the matter was lodged by the Receiving Party for assessment.  As the Bill was for less than £75,000, the provisional paper assessment process took place.

Outcome

Following the Detailed Assessment Hearing, the Court reduced the bill to £6,228.54, which was essentially 50% of the originally claimed amount on the Receiving Party’s bill of costs. This demonstrated that our proposed settlement figure was proportionate and reasonable from the outset despite the Paying Party’s assertions, and as such it was considered reasonable to write to the Court seeking for costs below the assessment cap of £1,500 + VAT + Court fee to be awarded (these costs exceeded £2,500 + VAT + Court fee, and so the Receiving Party was seeking the capped amount for provisional assessment costs).

Costs of Detailed Assessment under CPR 47.20(3)

With the bill being reduced by almost half, we sought to rely on CPR 47.20 (3), which provides that when deciding whether to make an alternative costs order, the Court must have regard to:

(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.

We argued that, in light of the significant reduction, the Receiving Party’s conduct in rejecting the Paying Party’s realistic offer, and pressing on to assessment was unreasonable. This gave strong grounds for the Court to reduce or disallow their costs of the detailed assessment process entirely.

The Court’s decision was that the general principle of CPR 44 should apply, that the Receiving Party had been successful on assessment, but that bearing in mind the level of reduction, assessment costs should be limited to £1,250 + VAT.  Even taking into account these costs, the involvement of ARC Costs produced a substantial saving of circa 40% for the Paying Party. 

How can ARC Costs Assist Paying Parties?

If you intend on challenging legal costs, it is always worth speaking to a specialist Costs Draftsman or Costs Lawyer to ensure you are taking the correct approach. At ARC Costs, all our initial legal advice is free of charge, and we will only raise a fee if a quote has been agreed with yourselves for any recommended work. 

Our specialist costs team are independent and we regularly assist Receiving and Paying parties, either to maximise or reduce the recovery of legal costs in a case respectively.

Our team holds extensive experience in disputing and negotiating legal costs, preparing Points of Dispute or Reply, and providing representation at Detailed Assessment. If you would like to discuss your query further, please contact us on 01204 397302, or email us at info@arccosts.co.uk.