The million pound question! There is no common allowance and the amount of costs allowed significantly differs case by case. As a paying party, if you are able to win on a few preliminary points such as the hourly rates claimed or the level of fee earner, then the Bill of Costs could be substantially reduced before the Judge begins looking at any individual items. As a receiving party, the key is preparation and knowing your case. Much depends on the case, the file management and the conducting fee earner.
The general rule is that the receiving party is entitled to the costs of the assessment. However the Court does have discretion and the Judge will have regards to the Civil Procedure Rules and all the circumstances, including –
- the conduct of all the parties;
- the amount, if any, by which the Bill of Costs has been reduced; and
- whether it was reasonable for a party to claim the costs of a particular item or to dispute that item.
These three useful tips may assist the paying party:
- Make reasonable offers to settle early in the Proceedings. Offers made later in the proceedings will be given much less weight by the Judge.
- Do not raise Preliminary Points without justification. This will aggravate the Judge and give your opponent ammunition to attack your conduct.
- Make an early Payment on Account of Costs. This will reduce your liability for interest and avoid unnecessary Applications.
Where a solicitor’s bill/invoice is challenged by the client or other relevant party pursuant to the Solicitors Act 1974, the solicitor will be liable for the costs of the assessment if the fees are reduced by one fifth or more. If they are reduced by less than one fifth, then the challenging party will be liable for the costs.
Costs Advocacy should be dealt with by a Costs Expert.
Costs Lawyers have rights of audience in all costs proceedings including appeals and in first instance before the House of Lords or Her Majesty’s Privy Council.
In circumstances where a Costs Lawyer is instructed, they will be well equipped to attend the Detailed Assessment Hearing and deal with the issues raised. That said, the fee earner knows their case better than anyone else and therefore, in circumstances where the Bill of Costs is substantial, the attendance of the fee earner (alongside the Costs Lawyer) may be advantageous as they can provide greater insight, explanation and justification for the time spent or steps taken. This is of course only realistic where the costs in dispute are substantial enough to reasonably warrant the presence of two fee earners.
This has often caused Claimant’s Solicitors many hours of concern. Is my CFA OK? A question commonly asked. Many Solicitors turned to Costs Specialists to prepare CFAs or similar such documents, as the rules and case law were complex and often changing. The impact of the case law was often retrospective and Claimant’s were therefore reluctant to disclose their CFA. The Costs Practice Directions now provide that the CFA should be disclosed and therefore there is no hiding from the truth.
A minor breach with the CFA will not necessarily render it unenforceable. There are different regulations for CFAs depending on the type and date of the document. If you are in doubt about your CFA, you should seek advice from a Costs Expert sooner rather than later. Mistakes can be rectified if done so early on. Once the case is settled, it is much harder for mistakes to be corrected.
This question could be likened to ‘how long is a piece of string’! There is a structure to the entire process and there are certain deadlines to be adhered to but, as with all litigation, a lot rests on the conduct of the parties, issues raised and the capacity of the Courts. The key timescales are as follows:
- Notice of Commencement should be served within 3 months of the Authority for Costs
- Points of Dispute are to be served within 21 days of the Notice of Commencement
- Replies (which are optional) are to be served within 21 days of the Replies
- The Request for Detailed Assessment should be made within 6 months of the Authority for Costs