Journal

Practico Blog: Delay in commencing detailed assessment proceedings

We regularly receive enquiries from clients regarding the commencement of detailed assessment proceedings where the date of the order providing the right to assessment is over 3 months old and on occasions several years old.

The rules which govern the commencement of detailed assessment proceedings are set out at CPR 47.7 and state that the time by which detailed assessment proceedings must be commenced is 3 months from the date of: judgment; direction; order; award; other determination; discontinuance under Part 38; or acceptance of an offer to settle under Part 36.

Should the receiving party fail to initiate detailed assessment proceeding within the 3-month period, set out above, then CPR 47.8 provides the sanction for such delay. It states:

(1) Where the receiving party fails to commence detailed assessment proceedings within the period specified –
(a) in rule 47.7; or
(b) by any direction of the court,
the paying party may apply for an order requiring the receiving party to commence detailed assessment proceedings within such time as the court may specify.
(2) On an application under paragraph (1), the court may direct that, unless the receiving party commences detailed assessment proceedings within the time specified by the court, all or part of the costs to which the receiving party would otherwise be entitled will be disallowed.
(3) If –
(a) the paying party has not made an application in accordance with paragraph (1); and
(b) the receiving party commences the proceedings later than the period specified in rule 47.7,
the court may disallow all or part of the interest otherwise payable to the receiving party under –
(i) section 17 of the Judgments Act 1838; or
(ii) section 74 of the County Courts Act 1984,
but will not impose any other sanction except in accordance with rule 44.11 (powers in relation to misconduct).
(4) Where the costs to be assessed in a detailed assessment are payable out of the Community Legal Service Fund, this rule applies as if the receiving party were the solicitor to whom the costs are payable and the paying party were the Legal Services Commission.
(5) Where the costs to be assessed in a detailed assessment are payable by the Lord Chancellor under Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, this rule applies as if the receiving party were the solicitor to whom the costs are payable and the paying party were the Lord Chancellor

This Rule makes it clear, that save for misconduct (under CPR 44.11) the Court will not impose any further sanction other than, at its discretion, the disallowance of interest.

Accordingly, it will be necessary for the Court to consider the circumstances surrounding any delay and whether it could be treated as misconduct (failure to comply with a rule/practice direction), under CPR 44.11.

CPR 44.11 states:
(1) The court may make an order under this rule where –
(a) a party or that party’s legal representative, in connection with a summary or detailed assessment, fails to comply with a rule, practice direction or court order; or
(b) it appears to the court that the conduct of a party or that party’s legal representative, before or during the proceedings or in the assessment proceedings, was unreasonable or improper.
(2) Where paragraph (1) applies, the court may –
(a) disallow all or part of the costs which are being assessed; or
(b) order the party at fault or that party’s legal representative to pay costs which that party or legal representative has caused any other party to incur.
(3) Where –
(a) the court makes an order under paragraph (2) against a legally represented party; and
(b) the party is not present when the order is made,
the party’s legal representative must notify that party in writing of the order no later than 7 days after the legal representative receives notice of the order

Should the Court consider that any delay has been as a result of misconduct then the receiving party could lose all of its costs or a substantial proportion of them.

The issue of delay was considered in the case of Botham v Khan and Lamb v Khan [2004] EWHC 2602 (QB), where Costs Orders were made in July 1996 and the receiving party did not commence detailed assessment proceedings until October 2003. The paying party in this case applied for the assessment proceedings to be stayed or struck out on the grounds of delay or alternatively that they should be disallowed under the old misconduct rule 44.14(1). However, this application was unsuccessful on the ground that misconduct would be a disproportionate sanction. This was due to the fact, that although there had been a culpable delay, the paying party had not availed themselves to the right to apply under CPR 47.8(1) for an Order requiring the receiving party to commence detailed assessment proceedings within a specified period. Therefore, the assessment proceedings were allowed to continue.

This approach was replicated in Haji-Ioannou v Frangos [2006] EWCA Civ 1663 where although there had been a delay of 5 years in commencing detailed assessment proceedings. The court decided that CPR 47.8 and the old misconduct rule 44.14 (now CPR 44.11) were not inconsistent and that the delay did not warrant any further sanction under 44.14 in addition to the loss of interest. Where the relevant rule not only gave the paying party the option of preventing further delay by taking the initiative, by making an application under CPR 47.8 but also made clear the normal sanction for such delay, the court should be hesitant to impose further penalties by way of reducing otherwise allowable costs.

We would always advise, where possible, that a receiving party should adhere to the rules and initiate detailed assessment proceedings within the 3-month period. However, the only potential penalty, at the Court’s discretion, for commencing after that period is the loss of interest (unless there has been misconduct).

In respect of the paying party, should the receiving party fail to commence detailed assessment proceedings within the 3-month period, then they are able to take the initiative and make an application, under CPR 47.8, to force the commencement.