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Provisional Assessments

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One of the changes to be implemented with the Jackson Reforms on 1 April 2013 is the Provisional Assessment regime. This new regime will apply to all civil Bills of Costs with a value of £75,000 or less, where the costs proceedings commenced after 1 April 2013 and which fall outside of any fixed costs regime. You may be celebrating the thought – the idea of cutting the inevitable Detailed Assessment costs of preparing for and attending a lengthy (and in many a solicitors’ view, very boring!) Hearing, the need for more litigation at the end of your case…it will all result in reducing the onus on you – right?

My view is that this process could, and most probably will in fact, do little other than increase the onus on you and the time incurred in respect of the Detailed Assessment process.

The idea of this regime, intended to form the new Part 47.15 of the revised CPR, is that the usual DA process takes place in terms of service of the Bill, Points of Dispute, Replies and then the Request for Detailed Assessment Hearing. It is at this stage that things change. The Court will not list a Hearing whereby the parties will be heard on their arguments on costs; instead the Court will be sent the Bill, PODs, Replies and the full file of papers for the Judge’s perusal. The Judge will review all of the papers and assess the costs claimed accordingly. All sounds great so far…

However, the reality is that your file is the basis upon which the assessment will be made. If your file is in poor order, missing attendance notes, illegible or contains things that you’d really rather the Judge didn’t see; you don’t have your loyal Costs Draftsman there to fight your corner and justify the costs and to scrabble through the papers to locate a letter or note than has been filed out of chronological order. Your file will be key. Therefore, keeping your file in good order will be essential. Every attendance note you prepare will need to be drafted with the thought in mind that a Judge will be reading it.

If you’re not happy with the Provisional Assessment you are of course at liberty to apply for a Hearing, however if you are not successful in recovering 20% more than the Judge allowed then you (even as the receiving party) will be liable for the costs of and incidental to that Hearing. To put this into context, 20% equates to £10,000 on a £50,000 Bill! Or put another way, if the Judge Assessed your Bill at 75%, the paying party would need to successfully have it reduced to 55% or less, and the paying party would need to successfully argue a 95% (or higher!) recovery, in order to recover their costs of the process and avoid having to pay the other parties’. My view is that objecting to a Provisional Assessment will rarely be commercially viable.

My view is that Provisional Assessments will more than likely serve to increase the overall time spent during the life of the case to ensure a sufficiently detailed file, as well as the costs of assessment in most cases. The Bill of Costs will need to be substantially more detailed, the PODs will need to cover every eventuality and therefore it follows that the  Replies take on a new level of importance and significance; they certainly will no longer be considered ‘optional’! Furthermore, the draft Rules indicate that this entire process will be limited to £1,500, with no indication as to whether this includes Court fees, VAT, etc.

For more information, contact Claire Bullock.