CPR 47.15 and the Provisional Assessment Process
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What is CPR 47.15?
When a Receiving Party is unable to reach agreement of their costs (on a Bill of a value of less than £75,000 in total), then in order to determine the appropriate amount of costs recoverable, the Receiving Party requests their Bill of Costs to be assessed by way of provisional assessment pursuant to CPR 47.15. The Provisional Assessment process was formally introduced (though had been piloted previously) with the Jackson Reforms in April 2013.
When Should a Receiving Party Apply for Provisional Assessment?
If you are at the point of seeking Court assessment of your costs, then it is important to ensure all previous steps have been followed compliantly.
To get to the point of lodging for an assessment under CPR 47.15, a compliant Bill of Costs must have first been prepared, and served on the Paying Party with a Notice of Commencement. This triggers the initiation of detailed assessment proceedings.
Thereafter, the Paying Party has 21 days following service, to submit Points of Dispute (their written legal submissions) challenging the costs claimed, and in response the Receiving Party is entitled to serve Points of Reply.
It is important to note that up to this point from the service of the Notice of Commencement, no Court input or involvement is generally necessary, pending any interim applications having been filed.
Negotiations can take place at any point, and if agreement has not been reached following service of Points of Dispute and Reply, you should take heed of CPR 47.14 which stipulates that the Receiving Party must lodge for assessment within 3 months of the date set out in CPR 47.7. In summary, from the date a costs order is made, or Part 36 Offer accepted, the Receiving Party has 6 months to apply for an assessment in accordance with the Rules.
What Happens if I Miss the Deadline set out in CPR 47.14?
There are no automatic consequences, and if you have missed the “soft” deadline then don’t worry, you can still recover your costs and have them assessed.
That said, if the deadline passes, it is open to the Paying Party to apply for an unless order to strike out your claim for costs (this would be on notice, and in any event the Court would give you 14-21 days to file for assessment in any subsequent Order made).
If you lodge late for assessment under CPR 47.15 and no application for strike out of the claim for costs has been made, then in accordance with CPR 47.14(4), the Court can disallow interest on unpaid legal costs for the period of delay.
How Do I Apply for Assessment Under CPR 47.15?
Detailed assessment proceedings commenced compliantly, and in circumstances when negotiations have been exhausted (remember to also consider mediation or arbitration alternatives), then you may want to consider applying for a Part 47 Rule 47.15 assessment.
Form N258 is to be used to apply. As has been alluded to previously, detailed assessment at Court can take two forms:
1. Provisional Assessment – Default option for all bills of £75,000 in value or less. The assessment is carried out on the papers and detailed assessment costs are capped at £1,500 + VAT + Court fee for the successful party.
2. Attended Detailed Assessment – CPR 47.15 does not apply and the matter is listed for an attended hearing, whereby the Receiving and Paying parties can attend and make oral submissions on the Bill of Costs. The Court completes an item-by-item analysis with the parties present, and the costs of detailed assessment in this process are not capped, and therefore the process can be very costly.
To apply, the N258 form needs to be completed with the CPR 47.15 Provisional Assessment option selected, and sent to the Court in which proceedings were concluded. In addition the Receiving Party must file supporting papers as follows:
- Notice of Commencement;
- Entitlement to costs (Order or Part 36 Offer and acceptance);
- Bill of Costs with signed backsheet;
- Points of Dispute and Reply;
- Disbursement vouchers;
- Copy retainer (if in dispute);
- Copies of any offers exchanged (to be placed in a sealed envelope or marked as confidential).
If proceedings took place in a London based Court, then your case will need to be lodged to the Senior Courts Costs Office electronically via CE file.
Affected Courts are: Barnet, Brentford, Bromley, Central London, Clerkenwell and Shoreditch, Croydon, Edmonton, Ilford, Kingston, Mayors and City of London, Romford, Uxbridge, Wandsworth and Willesden.
What Happens Next?
If you have applied for a CPR 47.15 Provisional Assessment, you will receive a Court listing date stating when the paper assessment will take place. No further action needs to be taken at this point unless the Court provides further directions, and you will not need to attend the hearing (unless for reasons given, an attended detailed assessment hearing is required).
Once the hearing date passes, an annotated copy of the Bill is usually returned to the parties to agree the arithmetic of any decisions made by the Court. The costs officer will have gone through the Points of Dispute and Reply, and provided a commentary on their decisions, allowing the assessed Bill to be calculated.
Clarification can be sought from the Court on any decisions/issues of ambiguity, and generally the Court asks the parties to return to them with the agreed calculated outcome of the Bill, as well as any agreed sums for interest and detailed assessment costs, within 14 days.
If agreement cannot be reached on the assessment outcome arithmetic, the Court can be asked to determine the same, as well as interest and detailed assessment costs (at this juncture, the Court will consider the offers exchanged to determine which party is to pay the costs of detailed assessment, which by way of a reminder that on provisional assessment the maximum amount the Court can award is capped at £1,500 together with any VAT thereon and any Court fees paid by that party).
Are you Entitled to an Uplift?
Remember that if prior to assessment, you made a Part 36 Offer (and if you are thinking of lodging for a CPR 47.15 assessment, remember to make a Part 36 Offer!) and you have beaten it i.e. the result is higher than what your Part 36 Offer was, then you are entitled to the costs consequences as set out in CPR 36.17, unless the Court otherwise orders.
Specifically, you are entitled to recover interest at an enhanced rate of 10% above base rate, have your detailed assessment costs assessed on an indemnity basis, and most importantly, a 10% uplift is awarded on the assessed bill. As such if your Bill was assessed at £20,000, if you beat your own Part 36 Offer, you would be awarded £22,000.
Again, these amounts should be sought from the other side as part of any discussion post-assessment, and the Court can provide impartial input on this if it becomes a dispute.
Can a Party Dispute the Outcome of a Provisional Assessment?
In short, yes, and this is addressed in CPR 47.15 (&) and (8). Within 21 days of being served with the assessed bill, either party can apply for an oral hearing.
Caution should be adopted in taking this approach, as proceeding to an oral hearing a) removes the detailed assessment costs cap and exposes parties to additional costs risks, and; b) to be successful on an oral hearing you need to vary the assessed Bill of Costs by atleast 20%.
This is a significant hurdle to overcome, since you are challenging the Judge’s own decision, and therefore you may be certain of the prospects of success if you are to proceed to an oral hearing.
To request an oral hearing, a written request must be made to the Court in line with CPR 47.15(8) within the aforementioned timescales, otherwise the Provisional Assessment will be considered binding (save in exceptional circumstances).
How can ARC Costs Assist Your Law Firm?
ARC Costs specialise in legal costs disputes and are independent experts that regularly assist with both CPR 47.15 provisional assessment proceedings, and higher value detailed assessment disputes.
As a specialised team of experienced Costs Draftsmen and Costs Lawyers, we can assist either paying or receiving parties in resolving costs disputes.
For Receiving Parties we can assist throughout litigation, settling Costs Budgets at the case management stage, or on conclusion of a case in preparing a Bill of Costs. We also provide legal costs negotiations services and regularly prepare Points of Reply as part of conducting detailed assessment proceedings.
For Paying Parties, for whom we often settle Points of Dispute, we ensure that only a proportionate level of costs is recovered, with any excess reduced from your costs liability.
If you would like more information on any of our services or wish to speak to a member of our costs team about your case, then please do not hesitate to contact us. Please call one of our experts on 01204 397302, or email one of our costs experts direct on info@arccosts.co.uk.
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