What Is CPR 47.6?

CPR 47.6 is a rule under Part 47 of the Civil Procedure Rules, which deals with costs assessment in civil litigation. Specifically, it outlines the steps necessary to request a detailed assessment of costs.

After a court case concludes, the winning party (referred to as the receiving party) often seeks to recover costs incurred during the litigation process, such as solicitor fees, court fees, and disbursements. The general rule of thumb pursuant to CPR 44.2(2)(a) is “that the unsuccessful party will be ordered to pay the costs of the successful party” however, (2)(b) does allow variation from the usual rule when the Court feels it is warranted to do so.

Once it is resolved which party is to pay the costs of any action, then if costs cannot be agreed between the parties, CPR 47.6 facilitates a formal procedure to determine what costs are reasonable and proportionate, referred to as the detailed assessment process.

The detailed assessment process is in itself, quite unusual, in that initially the formal process is begun without any involvement of the Court, and in the majority of cases, the detailed assessment procedure is resolved by agreement without any Court input whatsoever.

Nevertheless, CPR 47.6 provides  a transparent and set method of resolving the recovery of costs, balancing the interests of both paying and receiving parties.

CPR 47.6 only becomes applicable after a court order for costs, settlement, or other costs-related judgment has been made, and one party is entitled to recover costs from the other.

A Part 36 offer may also be relevant in the context of costs recovery, and is a form of deemed costs order as defined under CPR 44.9.  Part 36 offers are formal settlement proposals made under Part 36 of the Civil Procedure Rules, encouraging parties to resolve disputes early and avoid prolonged litigation. These offers can significantly influence the detailed assessment process, as accepting a Part 36 offer typically impacts costs liabilities. If a Part 36 offer is not accepted and the rejecting party later fails to achieve a better outcome, they may face severe costs consequences, including being ordered to pay the other party’s costs from the date the offer expired.

What Are the Most Common Scenarios Where CPR 47.6 Detailed Assessment Would Apply?

• When the amount of recoverable costs has not been agreed upon between the parties.
• The matter settles by way of a Part 36 Offer and acceptance, or if a non-Part 36 Offer has been agreed, then a Tomlin Order should be entered into staying the main proceedings and allowing for the recovery of costs.
• When a court has ordered that costs are to be assessed in detail, rather than summarily (a quicker process typically used for smaller amounts, and which usually follows any hearing of 1 day or less).

The rule is vital in ensuring that both parties understand their rights and obligations when resolving cost disputes. 

What is the CPR 47.6 Process? 

1. Preparing the Bill of Costs

A central document in the detailed assessment process, the bill of costs is essentially a detailed breakdown of the costs within a case that outlines all legal fees and disbursements the receiving party seeks to recover on an item-by-item basis. In an electronic bill (for multi-track matters), the bill is even more detailed and breaks down each routine communication, and how the costs are claimed for each phase within the scope of any approved Costs Budget. 

2. Serving the Notice of Commencement

To commence detailed assessment proceedings under CPR 47.6, the Bill of Costs must be served with a  Notice of Commencement in Form N252. The Notice formally informs the paying party that the receiving party is seeking a detailed assessment of costs and specifies the amounts sought.

Reference is made to Practice Direction 47, para 5.2 which sets out the documents which should accompany the Notice of Commencement, including:

– Authority to proceed to detailed assessment (Order or Part 36 Offer/acceptance);

– Bill of Costs;

– Disbursement vouchers/Counsel fee notes;

– Signed backsheet certifying the Bill as accurate;

– If a Multi-Track matter, a breakdown of costs as against any approved Budget (Precedent S)

3. Timeframe for Paying Party’s Response & Points of Dispute

Once served with the Notice of Commencement and the bill of costs, the paying party has 21 days to respond following the receiving party serving a Notice of Commencement and Bill of Costs. Their response can take one of the following forms:

• Agreement: The paying party agrees to the full amount claimed in the bill.
• Points of Dispute: The paying party contests specific costs, raising objections known as “points of dispute.”
• No Response: In which case the receiving party can apply for a Default Costs Certificate for the full amount claimed.

4. Points of Dispute & Replies

Points of dispute are the paying party’s formal objections to the bill of costs. Common grounds for disputes include:

• Excessive hourly rates charged by solicitors.
• Unnecessary or disproportionate expenses.
• Duplicate or unclear entries in the bill of costs.

Points of dispute must be filed with the court and served on the receiving party. The receiving party can then respond with replies to points of dispute, defending the costs they have claimed.

Once served, the receiving party is entitled to respond to legal arguments in any Points of Reply.  These are optional, and should be served within 21 days of service of Points of Dispute, but we would strongly recommend a response is given otherwise any Court on assessment will only see one side of the parties’ positions.

5. Detailed Assessment Hearing

If the parties cannot reach an agreement after exchanging points of dispute and replies, then a Detailed Assessment Hearing will be applied for. At this hearing, the court will:

• Examine the bill of costs and the objections raised.
• Determine whether the claimed costs are reasonable and proportionate.
• Issue a final costs assessment.

There are two types of detailed assessment hearing, which take the form of either:

– Provisional Assessment Hearing – Usually for bills under £75,000 in value, takes place on the papers only and parties’ attendance at Court is not required.  Costs of the process are capped at £1,500 + VAT + Court fee.

– Attended Detailed Assessment Hearing – For Bills of £75,000+ in value, or where the Court has ordered consideration of bespoke issues.  Costs are uncapped, and these hearings can often be several days (as they relate to higher value bills) or weeks.  As such, detailed assessment costs can become substantial, and are often a minimum of £5,000 – £10,000, and rapidly increase as the length of any hearing increases.  In such circumstances, parties should consider potential ADR alternatives such as mediation or arbitration, to try and keep costs escalating.

Deadlines and Consequences of Non-Compliance

Adhering to deadlines is crucial in the CPR 47.6 process. Missing deadlines can have significant consequences:

For the Receiving Party

• If the receiving party does not serve the Notice of Commencement within three months, they risk losing the right to recover costs and the paying party is entitled to apply for an unless order to force service of a bill, failing which the claim for costs could be struck out (CPR 47.7).

For the Paying Party

• If the paying party does not respond within 21 days, the receiving party can apply for a default costs certificate, automatically awarding the full amount claimed in the bill.

ARC’s Recent Assistance and Compliance with CPR 47.6

ARC Costs recently assisted a firm of solicitors who were unable to negotiate their costs following a Judicial Review case. The firm initially claimed costs of £14,200 within an informal Schedule of Costs, but they had received an offer of only £7,000 from the paying party and were unable to progress negotiations.  Ultimately a threat had been made that an application would be made for an unless order to enforce commencement of detailed assessment proceedings.

The solicitors instructed ARC Costs to prepare a Bill of Costs to ensure compliance with CPR 47.6, and ultimately the digital papers were costed and a Bill produced within a week of instruction.

ARC Costs prepared a compliant three-column bill, which upon costing of the full file, totalled £18,205. This was formally served with a Notice of Commencement. Before ARC Costs filed the Points of Dispute, the paying party made an increased offer of £11,500 and, following provision of a short extension for service of Points of Dispute, further negotiations took place the receiving party ultimately recovered £13,350 by way of agreement.

This outcome represented a 91% increase in recovery compared to the original offer,  and was almost the full amount of costs originally sought, thus demonstrating the importance of ensuring you have in place a reliable legal costs partner for your law firm.

How Can ARC Costs Assist Your Law Firm?

Navigating the detailed assessment process under CPR 47.6 can be daunting, but ARC Costs is here to help. With expertise in legal costs and procedural rules, we provide tailored support to ensure you achieve the best outcome.

Here’s how we can assist:

Preparation of the Bill of Costs
We draft clear, detailed, and compliant bills of costs to maximize recovery and minimize disputes.

Review and Response to Points of Dispute, and Provision of Negotiation Services
Our team analyses objections raised by the paying party, crafting robust replies to defend your claimed costs effectively.  Our team will also calculate a valuation bracket for your Bill, and negotiate in accordance with agreed parameters.

Guidance on Deadlines
We help you stay on track with all deadlines, avoiding a delay in commencing a detailed assessment, cost delays and sanctions.

Representation in Hearings
If your case proceeds to a detailed assessment hearing, our experienced costs advocates provide representation to secure the best possible outcome.

Applications for Default Costs Certificates
When the paying party fails to respond, we handle the process of obtaining a default costs certificate to expedite recovery.

By partnering with us, you can navigate the complexities of CPR 47.6 with confidence and efficiency.

Contact ARC today on info@arccosts.co.uk or alternatively contact us on 01204 397302 for more information on how we can assist.

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