In Vine v Belfield [2021] EWHC 3068 (QB) (05 October 2021) (‘Vine’), the High Court of Justice (Media and Communications List) was required to consider a request for payment on account where the Receiving Party had failed to lodge the appropriate form N260 statement of costs on time, thus frustrating the wider summary assessment of costs process.

What is a Costs Schedule?

Before considering the decision, it is important to first recap the rules for the service and format of statements of costs. Practice Direction 44 sets out a clear duty that the costs schedule must follow the N260 statement of costs format as closely as possible and must also be filed 2 days before any Fast Track hearing or 1 day before for all other hearings. These rules help to ensure the timely provision of standard formatted costs documents which enable swift consideration of costs at the outcome of any Fast Track Trial or other hearing.

In the absence of such documents, or if provided with a costs schedule which does not follow the usual format and does not clearly detail the costs, the Court may be required to order that the costs be subject to detailed assessment if not agreed, thus requiring further judicial time.  Though no specific sanctions are outlined in CPR 44 for failure to file an N260, the Court can take into account such failure when making any order for costs.

The schedule should clearly identify the number of hours claimed, hourly rates, grade of fee earners, disbursements, attendance costs and VAT.

It is for the above reasons that PD44 para 9.6 exists so as to disincentivise failure to provide correct formatted cost documents on time. Pursuant to this provision, a party that fails to advance a reasonable reason as to why PD 44 para 9.5 has not been complied with can expect such a default to be considered by the Court in deciding what order to make regarding costs. This extends to further include the costs of any further hearing or detailed assessment hearing that may be necessary as a result of the default.

Vine v Belfield

In Vine, the Court was engaged in the consideration of an allegation of internet-medium based defamation and harassment claim at the very early stages. Following the issuance of the Claim Form, the appropriate Acknowledgement of Service was filed. Rather than filing a Defence, the Defendant issued an application seeking a preliminary Trial on a number of issues, and as a result of this, the Defendant was required to serve a written notice of its case on these issues. The Defendant however, failed to comply with this requirement, partly owing to an ongoing criminal Trial in the Crown Court.

The Claimant accordingly made an application requiring the Defendant to file said written notice. In considering the same application, the Court did not wish to allow the Defendant’s lack of Court Order compliance to derail the set preliminary issue Trial date of 05/10/2021 and therefore, the parties were required to prepare to attend the same and to file the appropriate skeleton arguments. 

Notwithstanding this, it was viewed that the Defendant had still failed to advance a clear and cogent position on the preliminary issues, culminating in an adjournment of the Trial on the preliminary issues and directions being made requiring the Defendant to instead serve a Defence.

Turning to the issue of costs, culpability for the ‘costs thrown away’ was considered to rest firmly on the shoulders of the Defendant, the failure to comply with multiple Court orders and/or otherwise file cogent documents ultimately causing the adjournment of the preliminary issues Trial. Equally the Court was mindful of the fact that non-compliance with Orders would ordinarily lead to sanctions being imposed. There was however, one issue – the Claimant had engaged in a failure of its own, a failure to lodge the relevant statements of costs document(s).

In light of the Claimant’s default, the Defendant highlighted the applicable timeframes set out in PD44 para 9.5(4) in conjunction with the sanction-opportunity set out in PD44 para 9.5(6). Notwithstanding the Claimant’s non-compliance, it was considered in the circumstances that the Claimant remained entitled to payment of the costs of a previous application and also the costs of the 05/01/2021 hearing itself, this being because the ultimate source of the wasted costs being incurred was the Defendant’s non-compliance with various Court orders and directions.

Turning to the assessment of the Claimant’s application costs, undertaking a summary assessment of the schedule of costs was not possible, the Defendant having not been afforded adequate opportunity to challenge the same. Given this, the Court ordered that such costs be the subject of detailed assessment if not agreed, thus preserving the opportunity of the Defendant to challenge the costs and preserving the Claimant’s right to seek the same costs.

Regarding the sought payment on account, it was considered that only limited reductions were likely to be made on assessment, and therefore, in the interests of justice, pending full arguments being made within Points of Dispute/Points of Reply/at any attended detailed assessment hearing, an order for the payment of £25,000 on account was appropriate.

The Vine decision highlights the importance of PD44 para 9.5 and 9.6. Had the Defendant had all of his proverbial ducks in a row, it would have likely found itself in a strengthened position in seeking a sanction. The risk of a sanction did nevertheless lie dormant however, therefore it remains essential for any party to file N260 statement of costs documents in good time. Equally the decision demonstrates the Court’s commitment to ensuring justice in all the circumstances, as demonstrated by the Court’s ordering of a payment on account without a summary/detailed assessment having yet taken place.

Information on the N260 and the online version of this document can be found on the government’s website.

How can ARC Costs Assist?

The ARC Costs team of Costs Draftsmen and Costs Lawyers are always happy to help with costs challenges, including those involving a Costs Schedule.  

Whether you have been ordered to pay costs or wish to recover your costs, we can assist as independent costs experts in either minimising/maximising your recovery of costs.

If you wish to get in touch, please email info@arccosts.co.uk, or telephone 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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