PI Brief Update

Little Things to Know About the Revised Detailed Assessment Procedure - Matthew Hoe, Jaggards & Taylor Rose Law

16/07/13. The Jackson reforms changed costs overnight. Some of the changes were heralded with widespread commentary, and continue to receive it. There are other changes, critical to practitioners, that have received much less commentary. Lack of awareness may lead to expensive mistakes.

For instance, there have been changes to the detailed assessment procedure. Provisional assessment has caught the headlines. Provisional assessment looks after itself; it requires less participation from the parties. Other changes to the assessment procedure require parties to do things differently. However, my practical experience has been that many have carried on as before.

Restricted transitional provisions

The cause appears to be that practitioners consider that there ‘must’ be transitional provisions. Because, they reason, it would be illogical if there were not. The changes should not apply to assessment proceedings that had already started by 1^st April 2013. There are reports too that some judges, perhaps caught on the hoof, have commented extra-judicially that they would expect the old ways to apply.

The transitional provisions in CPR 48 for additional liabilities are not relevant. The only applicable transitional provisions are set out in paragraph 22 of The Civil Procedure (Amendment) Rules 2013 (SI 2013/262). They cover:

• the time for appealing from a decision in detailed assessment proceedings (para 22(9));

• offers in detailed assessment proceedings (para 22(10));

• interest on the costs of detailed assessment proceedings (para 22(11)).

The effect is that other changes to the steps of the assessment procedure apply if the step is taken after 1^st April 2013, regardless of when the notice of commencement of detailed assessment (N252) was served.

Replies to points of dispute

PD47 12.1 provides first that a receiving party can only reply to the points of principle in the points of dispute, or make concessions. A point of principle is not defined. But it would seem to be a matter of law rather than a mere objection to quantum of an item. A concession can be any agreement on a point of law or offer to accept less than is claimed in the bill.

Second, the practice direction goes on to outlaw general denials, specific denials and standard form responses. This reflects the general truism that replies do not assist. Saying that you don’t agree is no more helpful than not saying that you don’t agree. Also, receiving parties are subject to a restriction not placed on paying parties: the ban on the use of templates. On a paying party, the relevant control on templates will be how effective he wishes his points to be and how much resource he is prepared to allocate.

Replies often set out background facts in support of a rejection of a point of dispute. Some receiving parties may argue that to do so is a matter of principle. That would be a stretch. It would seem that they are matters of fact, set out in furtherance of a specific denial. Factual replies must be covered by the ban. A canny receiving party may seek to introduce such facts in furtherance of a very minor concession instead. The cannier receiving party will already have anticipated the objection and set out the relevant facts in the bill of costs.

Whilst a receiving party may want to prepare fuller replies to influence the outcome of a provisional assessment, that choice cannot be rationalised on the basis that the new practice direction does not apply where detailed assessment was commenced before 1^st April.

Even if the court has regard to the replies, it is unlikely that the court will allow their costs to the extent that they are non-compliant. In sub-£75K assessments commenced after 1^st April, receiving parties are more likely to comply with the new rules because of the cap on assessment costs of £1500 in CPR 47.15(5). In assessments commenced before 1^st April, in which costs remain uncapped, receiving parties should not continue to prepared detailed replies and expect to recover the costs.

Following in the recent footsteps of receiving parties applying to challenge the admissibility of points of dispute served with the open offer prescribed by PD47 8.3, we will also see paying parties applying to object to the admissibility of replies that do not comply with the practice direction. If receiving parties lose on such applications, it will increase the expense of the initial decision or lack of care to not comply with the practice direction.

Statement of costs

CPD 45.3 used to provide: ‘No party should file or serve a statement of costs of the detailed assessment proceedings unless the court orders him to do so.’

There is no corresponding provision in the new PD47.

This change is especially important in the run off of assessments commenced before 1^st April which are now coming to hearings.

CPD 45.3 was a practice direction to the old CPR 47.18. That rule still applies under the transitional provisions in the pre 1^st April cases. The position is not so clear for the practice direction. Does the preservation of the rule extend to its practice direction? Or has it been swept aside?

From an abundance of caution, it is safer to assume the latter.

Therefore, the default position in PD44 9.5(4)(b) would apply, and the statement of costs for a detailed assessment hearing must be filed and served not later than 24 hours before the time fixed for the hearing.

That is a change likely to capture practitioners unaware.

Prior to the 1^st April, the leading case on the consequences of the failure to serve a statement of costs was MacDonald v Taree Holdings. The court held that failure to file or serve a statement of costs did not warrant a complete disallowance, but there should be a proportionate response which may still result in a reduction in the amount of costs. But in the brave new world post 1^st April, and the overriding objective mark 2 emphasising the importance of compliance with practice directions, a winner on assessment may find himself with a pyrrhic victory of he has not filed and served his statement of costs. The court may disallow his costs.

The revised Part 7 and new PD47 deserve careful reading alongside the transitional provisions. If a practitioner is not going to follow one of the rules or PDs, he must be ready to explain his decision. Assertions that the new provisions do not apply (unless a transitional provision confirms) are not likely to hold up to analysis in court.

Matthew Hoe
Jaggards & Taylor Rose Law

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