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Parasitic Detailed assessment Costs!

If you are a Solicitor specialising in Clinical Negligence litigation and interested in maximising your costs recovery you must read.

 Natalie Best v Luton & Dunstable NHS Trust [2021] EWHC B2(Costs)

Cost Judge Leonard sitting in the SCCO had to decide whether a part 36 benefit was allowed on an offer, solely for the cost of assessment of the detailed assessment. The cost related to a clinical negligence case.

The Case

The detailed assessment of the Claimant’s costs of this Clinical Negligence claim was listed for 10 and 11 November 2020. On 10 September 2020, the Defendant accepted, out of time, a part 36 offer from the Claimant in settlement of the bill and interest to the date of expiry of the offer.

The only matter remaining was the quantification of the Claimant’s costs of assessment, to be paid by the Defendant. The hearing was relisted for two hours on 10 November for the summary assessment of those costs in accordance with CPR 47.20(5).

The summary assessment of the Claimant’s costs of assessment was completed and the parties agreed the resulting figure at £58,119.80.

Shortly after the hearing the judge received an email message to the effect that another issue had come up. The judge re-entered the meeting to find that the Defendant’s representative at the hearing, Mr Stott was not present. Counsel for the Claimant, Ms McDonald, explained that she had attempted to contact Mr Stott and that the issue she needed to raise was that the Claimant wished to claim the benefits of a successful Part 36 offer in relation to the costs of assessment.

Mr Stott objected to a new issue being raised after the conclusion of the hearing. Arrangements were made, accordingly, for both issues to be addressed in written submissions.

These are my conclusions.

 

The Issue

Whether the Claimant could raise the issue post hearing and

Whether the Claimant can rely upon a Part 36 Offer as to the costs of Detailed Assessment

Cost Judge Leonard

Thanks to CPR 47.20(7), detailed assessment proceedings are treated as an independent claim. The question I have to decide for present purposes is whether the award and the quantification of the costs of assessment fall, as the Claimant contends, within “any issue that arises in” that independent claim for the purposes of CPR 36.2(3). My conclusion is that it does not, for these reasons.

The relevant wording appeared at wording of CPR 36.2(2)(d). If the issues arising on the detailed assessment of costs were issues in the claim for the purposes of CPR.2(2)(d), it would already have been possible to make a Part 36 offer in detailed assessment proceedings and it would not have been necessary, in 2013, to make specific provision to introduce the Part 36 regime to detailed assessment.

The necessary implication is that the issues referred to, Pre-April 2013, at CPR 36.2(2)(d) were the issues in the claim itself, which had been determined by the time an order for costs was made. Any award and assessment of costs would follow, as a separate process, once those issues had been determined (whether by agreement or judgment).

The same must be true of CPR 36.2(2)(d). CPR 47.20(7) allowed these detailed assessment proceedings to be treated as an independent claim. The issues in that claim were set out in the bill of costs, points of dispute and replies. They were resolved on the Defendant’s acceptance of the Part 36 offer. The award and quantification of the costs of assessment followed, but they were not issues in the deemed independent claim, all of which had already been resolved.

This conclusion seems to me to be supported by the wording of CPR 36.17(4) itself. The provisions of CPR 36.17(4) are prescriptive. The court must, unless it considers it unjust to do so, order that a Claimant (in detailed assessment proceedings, the receiving party) receive all of the listed awards including indemnity basis costs and additional interest on those costs. That envisages a claim, or part of a claim or an issue in a claim, which is in itself capable of conferring an entitlement to costs. In short, it would be what is described at CPR 47.20(7) as an independent claim. The costs of detailed assessment proceedings do not carry their own costs and do not meet that criterion.

That takes me to what seems to me to be a decisive obstacle for the interpretation of the rules contended for by the Claimant. If the Claimant is right then any Part 36 offer made as to the costs of assessment would, on acceptance, result in a further deemed order for Costs under CPR 44.9(1)(b). By virtue of Practice Direction 44 paragraph 8.2, that deemed order would be an authority for detailed assessment.

The receiving party would, accordingly, be entitled to draw up another bill to cover its costs of working on the costs of the detailed assessment, and to start a new set of proceedings for the detailed assessment of those costs. To avoid a Default Costs Certificate, the paying party would have to file Points of Dispute. The receiving party could then apply for detailed assessment and, pursuant to CPR 47.20, seek not only “the costs of the costs claimed in its bill, but the additional cost of the new set of detailed assessment proceedings.

The receiving party could also make yet another Part 36 offer as to the costs of the new detailed assessment proceedings. If the paying party were to refuse to accept that offer, it would be at risk of incurring the additional penalties provided for by CPR 36.17. If it did accept the offer, then the receiving party could start again with another bill claiming “the costs of the costs of the costs.

In summary my conclusion is that the costs of the detailed assessment proceedings do not, for the purposes of CPR 36.17(4), fall within “any issue that arises in the claim”.  The Claimant’s submission that it does seems to me to be inconsistent with the way in which CPR 36 has been interpreted since well before 2013. It is also, in my view, inconsistent with the full provisions of CPR 36.17. To accept it would be to override my obligation to interpret the Civil Procedure Rules in accordance with the overriding objective.

PIC View

Unfortunately, we agree with Costs Judge Leonard, as Mr Clegg for the Defendant pointed out,

“there is the potential for an indefinite cycle of Part 36 offers and new detailed assessment proceedings, each parasitic upon the last. Even one such parasitic set of detailed assessment proceedings would be disproportionate, duplicative and unfair to the paying party.”

Partners in Costs attend and advise on a number of Costs Hearings every month. Please get in touch if you need any assistance.

 

RG

08/04/21