ARC Costs were recently instructed by Defendant Solicitors (Receiving Party) in a complex and long-running property dispute to assist with the preparation of a Bill of Costs, negotiate costs recovery, and, where necessary, proceed to a Detailed Costs Assessment hearing.

We were ultimately successful in achieving £90,000 plus Detailed Assessment costs of over £21,000. The costs claimed in the original bill were £107,604.20, meaning that recovery on the initial Bill was in excess of 84%.

Detailed Costs Assessment: An Overview

Upon conclusion of a case, one party may be ordered to pay all or part of the costs of the other party (usually the successful party). When parties cannot agree legal costs payable after a case, detailed assessment is used to determine the amount of costs the receiving party is entitled to.

As part of a detailed costs assessment, the receiving party must file a Bill of Costs, setting out all costs claimed, and serves it with a Notice of Commencement within 3 months of the costs order (though it can be served later, subject to potential sanctions pursuant to CPR 47.7). The paying party then has 21 days to serve on the paying party, Points of Dispute, challenging items in the bill.

The receiving party can reply to these disputes, though it’s not compulsory. If costs are still not agreed, the receiving party must request a Detailed Assessment Hearing within 3 months of the end of the dispute period.

At the hearing, a Costs Judge, District Judge or costs officer reviews the bill and disputes, deciding what costs are reasonable. Throughout the process, parties can settle costs by negotiation.

If deadlines are missed, consequences follow. For example, the paying party risks a Default Costs Certificate being issued if Points of Dispute aren’t served in time, meaning they may have to pay the full bill. The detailed cists assessment process is governed by Part 47 of the Civil Procedure Rules.

Case Study: Facts of the Case

The dispute centred on who had the beneficial ownership of a property. The Claimant was the cousin of the Second Defendant. The First and Second Defendants were previously married but are now estranged. The Claimant was initially the registered owner of the property and lived there with the Defendants until their marriage ended, after which he transferred the legal title to the First Defendant.

Later, the Claimant registered a restriction against the property’s title, claiming a beneficial interest through a trust deed. The First Defendant, upon learning about the restriction, sought its removal. Meanwhile, the Second Defendant let the property without the Claimant’s consent.

Each party claimed they were the rightful sole owner, having funded the property purchase. The Claimant alleged an agreement existed with the First Defendant under which he would manage the property until he started a family, after which ownership would return to him.

He claimed the transfer to the First Defendant was made under this agreement. However, the First Defendant denied any such agreement and alleged the document relied on by the Claimant was forged. The Second Defendant supported the existence of an agreement, stating it created an enforceable contract.

Due to these disputes, the Claimant issued legal proceedings against the First Defendant. The First Defendant responded, and an application was made to the Court for relief from sanctions, which was dismissed. Directions were given for the case to proceed, and both parties submitted their pleadings.

During the process, the First Defendant alleged the trust deed was fraudulent and placed on the title without her consent, while also accusing the Second Defendant of letting the property without permission. The Claimant denied the fraud allegations and maintained his claim to a beneficial interest.

The matter was allocated to the multi-track, and both parties were given permission to jointly instruct a handwriting expert to examine the authenticity of the disputed document. Disclosure of documents was exchanged, and both parties submitted witness statements.

A handwriting expert’s report concluded that the questioned signatures were indeed made by the First Defendant. Applications and further evidence were exchanged, and the case progressed through several case management conferences and pre-trial reviews.

Eventually, at Trial, the First Defendant accepted that she held the property on trust for the Second Defendant, with the division of shares to be agreed between them.

Consequently, the Claimant’s claim was dismissed, and the restriction on the property was ordered to be removed. Directions were given for how the property should be sold and proceeds divided between the Defendants. Costs orders were made against the Claimant and the Second Defendant.

ARC Costs were instructed to prepare the bill of costs and commence detailed assessment proceedings with the paying party.

Detailed Costs Assessment of the First Defendant’s Bill of Costs

The dispute, which took several years to reach resolution, involved extensive legal work including multiple interim hearings, a six-day Trial, and the involvement of both Counsel and expert witnesses. The Bill of Costs prepared, which had to be phased in the electronic bill format (Precedent S) to reflect costs budgeting that took place, reflected the significant work undertaken over the course of the proceedings and included items undertaken at solicitors’ hourly rates for substantial case preparation, fees for leading and junior Counsel, and the costs associated with instructing expert handwriting evidence.

The original Bill of Costs totalled £107,604.20. Negotiations and exchange of Points of Dispute and Replies took place however, an amicable resolution could not be reached.  The Paying Party was, for the main part, conducting matters as a Litigant in Person (though they had obtained input from a Costs Draftsman to settle Points of Dispute).  Productive negotiations were unable to take place, the Paying Party only offering a maximum of £27,000 for the Bill of Costs amid fraught allegations between the parties as to how the litigation had been conducted.

ARC Costs advised the client and stated there was little option but to proceed to a detailed assessment hearing.  We successfully secured a recovery of £90,000 for the Bill of Costs, in addition to which interest was recovered and in excess of £21,000 was awarded for the costs incurred in the Detailed Assessment process itself, leaving the Paying Party with a total liability exceeding the original Bill of Costs had it just been agreed as claimed. This represented an excellent outcome for the client, reflecting the complexity and duration of the matter.

How can ARC Costs Assist in Detailed Costs Assessments?

ARC Costs regularly assist is Detailed Costs Assessments. We are an experienced and independent team of specialised Costs Draftsmen and Costs Lawyers. As independent experts, we can assist either Paying or Receiving parties in resolving costs disputes.

For Receiving Parties we are adept at preparing Costs Budgets and Bill of Costs, as well as providing legal costs negotiations services and preparing Points of Reply. Ultimately we can ensure your legal costs are recovered to the maximum degree possible, and we will always advise on appropriate settlement parameters from the outset for you to determine to what degree you can expect recovery of your legal costs.

Similarly if instructed by the Paying Party, we are adept at settling Points of Dispute, and conducting negotiations to reduce your exposure to legal costs.

If you would like more information on any of our services or wish to speak to a member of our expert costs team about your legal costs, then please do not hesitate to contact us. Please call one of our independent experts at 01204 397302, or email one of our costs experts direct on info@arccosts.co.uk.

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