Misconduct in Detailed Assessment Proceedings
Farmer v The Chief Constable of Lancashire
In the recent case of Farmer v Chief Constable of Lancashire, the Claimant faced the consequences for misconduct in detailed assessment.
What is Detailed Assessment?
Detailed assessment is the process followed in order to reach an agreement/obtain an Order as to how much costs are owed by one party to another following the successful conclusion of a case.
At a Detailed Assessment Hearing, the Court determines the level of costs to be paid by one party to another. Generally, costs will be agreed between parties by virtue of negotiations during the detailed assessment process, and so the use of a Detailed Assessment hearing to determine the costs payable is relatively rare. However, not all opposing parties can always reach an agreement, and this is when a Detailed Assessment Hearing is necessary.
The first step for the Detailed Assessment costs procedure is drafting your Bill of Costs. As soon as the Bill of Costs has been submitted to the paying party alongside a Notice of Commencement, the paying party should consider any offer they should make for the costs claimed, and preparing and serve their Points of Dispute to the receiving party within 21 days. Following this, the receiving party should send Points of Reply to try and narrow the issues in dispute. Both parties should attempt to negotiate the costs claimed and reach an agreement, and litigation is always considered a last resort. It is always recommended that ADR be considered first before lodging for an assessment hearing. If agreement still cannot be reached, the receiving party should apply for a Detailed Assessment hearing (CPR 47 stipulates this should be done within three months of serving the Notice of Commencement).
Farmer v The Chief Constable of Lancashire
When preparing a Bill of Costs, the same will be signed with a certificate of accuracy to confirm the contents are correct. It is recommended you instruct a specialist Costs Draftsman or Costs Lawyer to ensure your Bill of Costs is prepared correctly. If it is not dealt with correctly, there can be severe consequences as the Claimant found in the matter of Farmer v The Chief Constable of Lancashire, following their misconduct in detailed assessment.
The Claimant’s Bill of Costs was served in June 2018 and totalled £174,565.79. The bill detailed that the claim had been funded under two separate retainers; Conditional Fee Agreement one, which covered three parts of the bill, and Conditional Fee Agreement two, covering the final section. Both retainers were dated post-LASPO.
There were several issues within the Claimant’s case. The Points of Dispute served by the Defendant sought clarification that cancellation notices had been included in the retainers, as the agreements had been entered into at the Claimant’s home. The Points of Reply that the Claimant submitted stated that all the retainer documents were in order.
Nevertheless, prior to the first detailed assessment hearing, the Claimant acknowledged that Conditional Fee Agreement one had no cancellation notice at all. Instead, they relied upon Conditional Fee Agreement two only, on a retrospective basis.
When the hearing commenced, the Master expressed concerns that the hourly rates claimed in the bill were higher than those allowed for in the Conditional Fee Agreement.
Due to this, the Master ordered an adjournment and disclosure of all of the retainer documents. In response to the Master’s orders, Conditional Fee Agreement two was disclosed alongside an attendance note and a signed cancellation notice from the Claimant. Nothing within the disclosed documents covered the first three parts of the bill, and there was no specific retrospective clause, although the Claimant’s representative highlighted that ‘there was an undertaking.’
Prior to the recommencement of the Detailed Assessment proceedings, the Claimant served a witness statement which apologised for the errors in the bill and supplied a revised, yet unsigned, Bill which stood at approximately a third of the original amount claimed. Following the Claimant’s misconduct, an application was filed to strike out costs under CPR 44.11 as there was no credible explanation for the errors made. Moreover, there had been a failure to assist the Court or present an accurate Bill since the original hearing.
Ultimately, it was decided that the Claimant’s conduct was unreasonable and that costs should be disallowed in their entirety.
Why Were the Costs Disallowed?
The Master established that the Claimant had provided no evidence in support of their entitlement to costs for the first three parts of the case. He also found that the second Conditional Fee Agreement had been cancelled by the Claimant, yet there was no evidence of an alternative retainer. Further, it was found that the Claimant had produced several certified documents which had been signed for without any proper concern.
These factors show how the Claimant lacked care and an organised plan during these proceedings. They also explain why the Claimant’s costs were disallowed and why their behaviour was deemed as ‘misconduct’.
Misconduct in detailed assessment proceedings was previously considered in the Court of Appeal, in the case of Gempride Ltd v Bamrah & Anor  EWCA Civ 1367. It quickly became a landmark case as the decision saw a successful Claimant lose half of their profit costs arising from a personal injury claim. The Claimant Solicitor had been found to be claiming a higher hourly rate than she was entitled to claim, and therefore was penalised as a result.
Both Claimants mentioned in this article displayed unreasonable and improper conduct; however, the cost judge in Farmer case took a much stricter approach and disallowed not half, but the entirety of the Claimant’s costs. This was likely due to the underlying defective retainer issues that also arose.
What Can We Learn from These Cases?
It is vital that a receiving party involved in detailed assessment proceedings verifies the accuracy of the Bill of Costs, retainer documents and Points of Reply with care. Completing these tasks should not be taken lightly, and any inconsistency can lead to severe costs consequences.
As originally posted by Hill Dickinson.
How can ARC Costs Assist?
Our team of highly experienced Costs Draftsmen and Costs Lawyers can assist in the recovery of your legal costs by drafting your Bill of Costs, as well as conducting detailed assessment proceedings, preparing your Points of Reply and providing advocacy services at any hearing. We can also use our skilled Costs Negotiators to negotiate your Bill of Costs with the opposing party. We will also provide advice on whether we believe the claim should progress to a detailed assessment hearing to ensure you achieve the best outcome.
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