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Filing CFA's for Provisional Assessment

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Mehmi v Pincher is a case arising out of the CPR 47.15 provisional assessment procedure, on which little guidance has been received from the Court to date.

The claim arose out of a road traffic accident in March 2012, where the Claimant received damages for personal injuries. The Claimant’s solicitors acted under a Conditional Fee Agreement. The claim eventually settled for £2,756.00 after proceedings had been commenced.  As is often the case where substantial costs are sought in relatively straightforward cases which exceed the value of the claim, the costs could not be agreed.

The receiving party served the Notice of Commencement and the Bill of Costs in September 2013. Points of Dispute were received on 10 October 2013. A point raised by the Defendant (Paying Party) included a request that the Claimant prove the existence of a valid retainer with the production of the CFA. The Claimant did not disclose this document.

The claim did not settle and so the Claimant applied for a Provisional Assessment hearing.  CPR 47.14 and Practice Direction 47 PD.13.2 and the N258 form all stipulate the following:  

‘It is confirmed, where the claim is funded by a CFA agreement, the provisional assessment requires a copy of the CFA to be filed (although not to the paying party) to establish the validity of the retainer’

The Claimant did not file the CFA at the point of applying for a hearing. It was not clear whether this was because his solicitor was misled by the erroneous wording of the N258 (which refers to a dispute as to the receiving party’s “ability” to pay, when it should read “liability”) or because she was confusing the requirement for disclosure and the Pamplin election procedure with simple filing. Either way, on the Provisional Assessment paper determination, District Judge Woodburn regarded the requirement of lodging the retainer as not having been fulfilled and accordingly made a nil assessment.

The Claimant’s solicitor made a request pursuant to CPR 47.15(7) for an oral review, and secondly made an application for relief from sanction pursuant to CPR 3.9. On 14 July 2014 the combined application for relief and oral review came before District Judge Baker. District Judge Baker, hearing the application for relief first, declined to grant it on the basis of the Court of Appeal’s decision in Denton and thus upheld the original nil assessment.

The Claimant appealed and on appeal His Honour Judge Wood QC, sitting with District Judge Jenkinson as an assessor, decided that the District Judge had been wrong to deal with the application for relief at all as the application was unnecessary; the Provisional Assessment process provided an automatic right to any party dissatisfied with the outcome of the ‘paper exercise’ to apply for an Oral Hearing on any of the issues decided. An Oral hearing is not an appeal and was not intended to be a substitute for the detailed assessment procedure and although the oral hearing is limited to those items in the bill which are challenged under sub-paragraph (8) and thus is circumscribed, it is in other respects a detailed assessment.

Specifically HHJ Wood QC said: “It seems to me that the process involved in the provisional assessment must mirror, albeit without oral representations, that which would ensue in a detailed assessment hearing. If the costs judge had parties in front of him or her in such circumstances, but could not be satisfied as to the validity of the retainer, either because the documents had not been provided or because the receiving party elected not to disclose the retainer, would that amount to a sanction or a judicial determination? I am quite satisfied that it would be the latter, and therefore I see no difference with the paper decision.”

Further, he noted: “There is a built-in entitlement to an oral review on any aspect of the provisional assessment. The provisional assessment is not binding if there is such a review and therefore its effect is nullified”. As a result, DJ Baker’s decision was set aside.

Having said that, a party who deliberately or carelessly fails to provide the necessary documentation to enable a decision to be reached will face significant costs consequences, a factor which is likely to act as a deterrent and to prevent oral reviews proceeding with material which was not previously available.

The case of Giambrone –v- JMC Holidays Ltd 2002 EWHC 495QB makes it clear that disclosure of the relevant retainer should be made to the Costs Judge rather than the Defendant’s representative.

The moral of the story is to ensure that all documents that are required by the Court to undertake the provisional assessment are filed or else risk a costly rectification process. In Liverpool you risk losing all of your costs if you fail to file the retainer documents once ordered and 50% of your costs of the provisional assessment in any event.