Costs Assessment

Costs Assessment is a procedure which takes place following the conclusion of a case. A Court will either order Summary Assessment or Detailed Assessment of a parties’ costs.  For legally aided parties, summary assessment will not take place and this is reserved for straight forward inter-partes disputes.  Detailed assessment is the method of assessment of legally aided costs, and this process is now completed by the LAA themselves predominantly, rather than via the Courts.

It is stated in the Costs Assessment Guidance 2018 – Version 7 – October 2021 (TC), that “Summary Assessment under the CPR is not possible in relation to payment to providers under legal aid or under an inter partes order for costs where the receiving party is legally aided (Practice Direction 9.8 of CPR 44.6)”

Detailed Assessment is governed by Civil Procedure Rule 47 and is guidance to which the Legal Aid certificate relates if there is an overlap between inter-partes and legally aided costs.  When completing work for Detailed Assessment, the fee earner’s charge out rate is fixed in legally aided cases (subject to any enhancements), but elevated rates can be claimed without referral to the indemnity principle, if a legally aided party is awarded their costs on an inter-partes basis.  Such rates will be decided on an hourly rate basis, being held to the reasonable standard (generally as against the guideline hourly rates).

Whether the costs to be assessed are inter-partes or legal aided however, the assessment process is very similar.  Both processes involve a legal costs expert analysing the digital or hard-copy file of papers from the case and producing a Bill of Costs (for legally aided matters, this will be an XML file to submit on CCMS).

Inter Partes Process

If it is an inter-partes dispute, the Bill will be sent to the Paying Party so that they can have the opportunity to prepare Points of Dispute. The Receiving Party may then respond to any items challenged by the paying party in their Replies to the Point of Dispute.

If Points of Dispute are not served within 21 days, a Default Costs Certificate can be sought by the receiving party.

If the matter does not settle at this point ADR should be attempted. If this is not effective, the matter will proceed to a court hearing. Depending on the value of the case, the hearing will take place on paper (Provisional Assessment) or at the County Court (Detailed Assessment Hearing).

Legal Aid Costs Process

The XML Bill of Costs will typically be submitted on CCMS to the LAA to consider and assess the costs claim.  Supporting evidence in the form of Court Orders, FAS forms and attendance notes may be requested.  The LAA are typically quite prompt in assessing the costs, and a turnaround of 2 weeks on your submitted Bill can be expected.

Costs Assessment Guidance: Legal Aid

Legal Aid is a government-funded service which can be provided if an individual can show that they are eligible. The individual would need to provide evidence to show that they cannot afford legal fees and that their case is serious. The Legal Aid Agency (LAA) provide the services for civil and criminal cases, ensuring that individuals in England and Wales have access to justice.

The aid can be used to pay legal fees for advice, mediation and representation in Court. The Standard Civil Contract governs the provision of legal aid services. Guidance for the application of this document can be sourced online however, support via Legal Aid is most often provided in respect of family (domestic abuse, Children Act, ancillary relief) and care/supervision proceedings.

A Legal Aid Client’s Rights on Costs Assessment

If an individual is required to contribute to their legal aid fees or if the statutory charge is applied, they have a financial interest in the amounts being claimed from the LAA and the client therefore has a right to inspect/contest the level of legal fees claimed. Also, if revocation of legal aid occurs, the client is considered to have a financial interest as they will become financially liable for the legal costs incurred.

According to the Costs Assessment Guidance 2018 – Version 7 – October 2021 (TC), a client’s rights in relation to costs assessment are that “on an assessment, review or appeal he or she can make written representations to the Agency or to a costs assessor within 21 days of being notified of his or her rights.” 

Repayment of Legal Aid Costs

In matters where an amount of costs are recovered from a Paying Party, or when a successful  legally aided party receives damages or keeps/gains property, the Receiving Party may be required to pay a percentage of their damages to the Legal Aid Agency in the form of a statutory charge to contribute to their legal fees.

It should be highlighted that costs of Detailed Assessment proceedings will not form part of the statutory charge.

Costs Assessment Assistance – Legal Aid Costs Draftsman:

Following the conclusion of a case, a Legal Aid fee earner (publicly funded) will be able to recover their costs from the LAA. The fee earner, usually a Solicitor, Paralegal or Litigation Executive, are obligated to provide their client with a Bill of Costs if they have a financial interest. They should also inform the client of their financial interest and their right to prepare written representations to endorse or contest the Bill of Costs.

It can be advantageous to instruct a Legal Aid Costs Draftsman who has specialist knowledge of the recovery process for Legal Aid provided by the LAA. They are able to calculate the incurred costs on civil, family and criminal law cases that have been funded by the LAA. The cases that a Legal Aid Costs Draftsman can work on most often relate to domestic abuse, ancillary relief, Children Act proceedings and housing disrepair.  Other areas of legal aid assistance are available however. Through the implementation of their expert knowledge, a Legal Aid Costs Draftsman can maximise the fixed fees/hourly rates which can be recovered.

The fees of the Costs Draftsman will be paid by the agency in matters where it is deemed reasonable to instruct an expert in legal costs (generally in exceptional/hourly rate matters).

Costs Assessment Guidance: Costs Orders in Legal Aid Cases

Sometimes, in civil or family matters, an inter-partes costs order may be produced by the Court. This will determine that one party will pay the costs of the other party. In these matters, the individual relying upon Legal Aid will be required to recover their costs from the Paying Party first (assuming the costs order is in their favour), instead of from the LAA.

It should be noted that the indemnity principle is immaterial in respect of hourly rates on publicly funded matters.

How can ARC Costs Assist?

Our team of costs experts have a varied range of skills. Therefore, we will be able to assist you in costs assessment of Legal Aid costs. We can also provide costs assessment guidance.

We can prepare comprehensive Bills of Costs in XML format for submission to the LAA on the CCMS system, and in inter-partes matters following service of the Bill on the Paying Party, we deal with Points of Dispute or Replies to Points of Dispute alongside other costs instruments. Our average recovery on LAA funded matters is 95% of costs claimed (without enhancement), and 72% on all Bill of Costs in inter-partes disputes, which demonstrates our excellent ability in recovering costs.

Please contact us at 01204 397302 or info@arccosts.co.uk where we can provide you with advice on your case.

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