Lord Justice Philips recently considered an appeal relating to service of the Bill of Costs and whether an omission to certify that the bill complied with the indemnity principle would render the service to be defective. It was found that this error alone would not invalidate the bill and service remained effective.
Background
A claim was brought by Ms Duffy for damages and specific performance of remedial work due to housing disrepair. The parties compromised the claim with the council to pay the costs, which would be subject to assessment if not agreed. On 16 November 2022 the Claimant served a Bill of Costs totalling £26,809.60. The Bill of Costs was signed and certified by a Solicitor of High Street Solicitors. The solicitor had ticked the box to confirm that the bill was both “accurate and complete” and had confirmed the position regarding VAT and interims, however had omitted to tick the box to confirm that the indemnity principle had been satisfied.
The council failed to file Points of Dispute and a Default Costs Certificate was obtained, which was issued on 9 January 2023. On 18 May 2023 the council applied to set this aside on the basis that it had not confirmed that it would accept service via email, rendering service of the bill defective. It was further submitted that the omission in the certification also meant that the bill was invalid. In the alternative, the council sought to set it aside on discretionary grounds. The application was initially heard by District Judge Rouine on 14 April 2024 however the Claimant’s representative had failed to file a Notice of Change and the Judge refused to hear the Claimant’s representative. As such, service was found to be invalid and the Default Costs Certificate was set aside.
The Claimant’s appealed this decision, which was heard on 29 November 2024. The judge allowed the appeal on the basis that the council had in fact agreed to service via email. Permission to appeal this decision was provided to the council on 12 May 2025 on the basis that the council alleged that failure to certify the bill as to the indemnity principle rendered the bill to be invalid.
Legal Principles
Lord Justice Philps considered the relevant provisions under CPR 47, and the accompanying practice directions relating to commencement of detailed assessment proceedings, Points of Dispute, Default Costs Certificates and the form and content of a Bill of Costs. He considered Practice Direction 5.10-5.21 and noted that the majority of the provisions were expressed in mandatory terms. Paragraph 5.21 states that the Bill of Costs must contain the certificates as set out in Precedent F of the Schedule of Costs Precedents, which expressly states that the indemnity principle certification is relevant in all cases.
Whilst the council accepted that, not every failure to comply with the mandatory provisions as to form and content within PD 47 would generally render a bill to be invalid, certification as to compliance with the indemnity principle was different due to its fundamental importance. In support of this, the council referred to Friston on Costs along with the leading cases of Bailey v IBC Vehicles Ltd [1998] 2 Costs LR 46 and Gempride Ltd v Bamrah [2018] EWCA Civ 1367.
Findings
Lord Justice Philps considered that both cases referred to by the council in fact indicated to the contrary of that submitted by the council; a signature of the Bill of Costs is, in itself, indication that the bill complies with the indemnity principle and a separate certificate of compliance with the indemnity principle is not necessarily required. As such, failure to comply with this requirement would not render the bill to be invalid and would not justify the non-service of Points of Dispute. CPR 3.10 further confirms that any error of procedure does not necessarily invalidate a step taken in proceedings, unless the court so orders, given that this rule allows the court to remedy the error. This is supported by HH Judge Lethem’s comments in Choudhury v Islam (Central London County Court, unreported 21 April 2021), where he stated that a defective bill should not be treated as a nullity.
He concluded that the failure to tick the relevant box next to certification of the indemnity principle is no different to any other defect and should not render the bill to be invalid. This remained the case despite the council’s assertion that this could not stand in light of the decision in Barking, Havering & Redbridge University Hospitals NHS Trust v AKC at both High Court level [2021] EWHC 2607 (QB). However this was distinguished on the basis that the bill was struck out, rather than it being held that it was invalid at the outset. As such, the Claimant’s bill was found to be valid and consequently, she was entitled to a Default Costs Certificate due to failure to serve Points of Dispute.
It was noted that the council were still entitled to seek to set aside the Default Costs Certificate on discretionary grounds however that significant costs had already been incurred on the applications to date (£45k for the council alone) and so it was debatable whether further challenges would be a good use of the public purse.
Commentary
Regardless of any suspected errors as to the form and content of the Bill of Costs, a party should still serve Points of Dispute. Where it is considered that a bill is defective, the correct approach would be to serve Points of Dispute, highlighting the alleged defects and requesting that the bill is struck out, should this be appropriate. Any defect will usually be insufficient to render service invalid and so a paying party who does not file Points of Dispute risks the possibility of a Default Costs Certificate being awarded.
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