Cost of Arbitration V Court in Costs Disputes on Detailed Assessment

The normal procedure in a costs dispute is the process of detailed assessment, whereby the case proceeds to a provisional/detailed assessment hearing at Court to have the costs assessed by a Judge. Using this process, a hearing date will usually be received around 6 months after a party files their Notice of Commencement and the hearing date will usually be 2- 3 months in the future, making this process quite protracted.

During the negotiation of costs process, it is worth considering the cost of arbitration v court, to decide whether you should proceed with the detailed assessment process, or if you should agree to an alternative method of costs dispute resolution, such as arbitration.

At a detailed assessment hearing, a Judge will usually consider the conduct of all parties and will consider whether any type of alternative dispute resolution (ADR) has been attempted by the parties. ADR can include arbitration and mediation and has been encouraged by the Courts to save time and costs incurred due to the expensive nature of Court proceedings.

What is Arbitration?

In England and Wales, arbitration is regulated by the Arbitrations Act 1996. Arbitration is a method of ADR which involves resolving disputes without taking the matter to Court. Before initiating arbitration proceedings, it is important that both parties agree to this type of resolution.

Arbitration awards are usually final and binding however, they can be appealed in limited circumstances. In some cases, the cost of arbitration v court in costs disputes can make arbitration an attractive alternative to the detailed assessment process.

The process of costs arbitration involves sending your Bill of Costs to an arbitrator, along with any Points of Dispute and Points of Reply.  Like a detailed assessment hearing, the arbitrator will then review the Bill and provide their decision on the Points raised. The parties will then have to abide by the legally binding outcome, as they agreed to the arbitration process taking place.

In general, the time frame for an arbitration decision is much shorter than that of the Court in a detailed assessment of costs. Costs cases in arbitration tend to be settled within 45 days. This shorter process usually makes the option more attractive than the several months+ period between filing a Notice of Commencement and proceeding to a Court hearing at detailed assessment.

The cost of an arbitration hearing for a costs dispute is generally cheaper than a Court hearing for detailed assessment due to the rising costs of Court fees and expert fees.

In complex costs cases, use of the arbitration process may be particularly effective as the process will be overseen by a senior costs Counsel or Costs Lawyer with a significant degree of expertise in costs law, whereas some Judges conducting detailed assessment do not have such experience. Time and costs can be reduced in the process of arbitration as the expertise of the arbitrator will reduce the need for the involvement of independent experts.

 

How Can ARC Costs Assist?

ARC Costs are a firm of experienced legal cost draftsmen, assisting law firms and litigants in person in the recovery and negotiation of legal costs. We have been successful in costs recovery in the majority of our dispute resolution cases. We can advise and assist in the process of alternative dispute resolution, such as arbitration and mediation.

We can also assist in recovering legal costs by drafting your bill of costs, as well as points of reply and negotiating your bill of costs with the other side before advising on whether the claim should proceed to a Detailed Assessment Hearing.

We can assist in the negotiation of a bill of costs, irrespective of whether you are a receiving or paying party.

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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