Schedules of costs for summary assessment – a back to basics guide.
As we see a change in the rules coming in for when a schedule of costs is needed in fixed costs claims, and a new Precedent U, it seems a good time to have a review of the summary assessment provisions generally.
Timing of summary assessment (9.2 PD CPR 44)
The general rule is that the court should make a summary assessment of the costs –
- (a) at the conclusion of the trial of a case which has been dealt with on the fast track, in which case the order will deal with the costs of the whole claim; and
- (b) at the conclusion of any other hearing, which has lasted not more than one day, in which case the order will deal with the costs of the application or matter to which the hearing related. If this hearing disposes of the claim, the order may deal with the costs of the whole claim,
unless there is good reason not to do so, for example where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily.
There is a separate provision for the summary assessment of mortgagee’s costs at 9.3 PD CPR 44.
If your case falls under the present fixed recoverable costs provisions then CPR 45.63(1) says that, subject to paragraph (3) for when the court is unable to make a summary determination, where the court makes an order for costs at the conclusion of a hearing, it shall in the absence of agreement between the parties make a summary determination of the amount of fixed costs or disbursements to which the receiving party is entitled in accordance with this Part.
Starting point for conducting a summary assessment:
The Courts should conduct a summary assessment as often as possible unless there is good reason not to. Some things to consider are as follows:
- What if the receiving or paying party is a child or protected person: The general rule is that costs payable by or to a child or protected party should not be the subject of detailed assessment (PD 9.9 CPR 44), but there can be situations when a summary assessment takes place (see paragraph 5 of the Guide to the Summary Assessment of Costs 2021 for more information).
- What if the receiving or paying party is in receipt of legal aid: The court can make a summary assessment of costs payable by an assisted person, but such an assessment is not in itself an assessment of the assisted person’s liability to pay the costs. For cases concerning s.26 of Legal Aid, Sentencing and Punishment of Offenders Act 2012 please see the SCCO Guide for further reading and explanation. The court should not make a summary assessment of the costs of a receiving party who is legally aided (PD 9.8 CPR 44), although this may be possible if the solicitor has waived the right to further costs.
- What if the paying party is a litigant in person: Mixed decisions on this subject; in Brake & Anor v Guy & Ors (Costs) [2022] EWHC 2907 (Ch) this was not, in itself, sufficient to make an order that there be a detailed assessment – but in Tomlinson v Radiocom Systems Ltd [2011] EWCA Civ 1832 there is a contrary decision, and the knowledge/understanding of the litigant can be a consideration.
- What if you intend to appeal? The intention to appeal was not of itself held to amount to a ‘good reason’ for not making a summary assessment of costs in Axton & Anor v GE Money Mortgages Ltd & Anor [2015] EWHC 1343 (QB).
- The amount claimed is not a bar: Pipia v Bgeo Group Ltd [2022] EWHC 846 (Comm) – A summary assessment where the costs were assessed at £7,250,000.00.
- Detailed assessment ordered after a revised schedule of costs was submitted, on the basis that the assessment would not be straightforward and a substantial sum was in issue: see Euroil Ltd v Cameroon Offshore Petroleum Sarl [2014] EWHC 215 (Comm).
What is a Statement of Costs?
Traditionally this has always been the N260 form, which had a trial of an electronic version in the Excel N260A and N260B that was not then implemented, so it’s usually a pretty explanatory PDF form. This would be the usual Statement of Costs seen.
As of 1 October 2024 the CPR was amended to provide for the Excel form Precedent U to be used in most cases under the present fixed costs provisions. Exactly how Section C of this form will be used is to be seen (so you may not want to completely forget about the N260 as an aide to Precedent U, nor trying to agree costs between the parties), but it allows for a claim for costs under CPR 45.9, 45.10, 45.50(3) and/or 45.13 (where appropriate), which are:
- Where making a claim for costs exceeding the fixed recoverable costs in exceptional circumstances (CPR 45.9),
- Where making a claim for costs exceeding the fixed recoverable costs on the grounds of vulnerability (CPR 45.10),
- Where costs are to be assessed according to CPR 45.50(3), which concerns the Intermediate Track and says “The costs to be awarded for stage S1 are subject to assessment up to a maximum of the figure shown for stage S1 in Table 14, except in a claim for personal injuries where the figure shown is fixed.”, and
- Where unreasonable behaviour is raised, with reference to CPR 45.13.
When do you need to file a Statement of Costs for Summary Assessment?
Per PD 9.5(4) CPR 44 the time limits for the filing and service of the schedule of costs for summary assessment are “… as soon as possible and in any event –
(a) for a fast track trial, not less than 2 days before the trial; and
(b) for all other hearings, not less than 24 hours before the time fixed for the hearing.”
In a present fixed recoverable costs case CPR 45.63(2) provides that:
“Any party who intends to claim any fixed costs or disbursements in accordance with this Part, must file at court and serve on any party against whom an order for payment is intended to be sought a completed Precedent U, which must include, if applicable, the details of any claim under rule 45.9, rule 45.10 or rule 45.13, no later than 24 hours before the time fixed for the hearing.”
What happens if you, or the other party, fail to or are late filing and serving a Statement of Costs?
There is a sanction for non-compliance at PD 9.6 CPR 44:
- The failure by a party, without reasonable excuse, to comply with paragraph 9.5 will be taken into account by the court in deciding what order to make about the costs of the claim, hearing or application, and about the costs of any further hearing or detailed assessment hearing that may be necessary as a result of that failure.
The test the court should consider for non-compliance, with reference to Macdonald v Taree Holdings Ltd [2001] EWCA Civ 312, is essentially; what, if any, prejudice has that failure to comply caused to the other party? If no prejudice, then the court should go on and assess the costs in the normal way. If satisfied it has caused prejudice, the next question is: how should that prejudice best be dealt with? The Guide to Summary Assessment adds that any sanction should be proportionate. Possible courses to take include a short adjournment to enable the paying party to consider the statement of costs, adjourning the summary assessment to another date, ordering a detailed assessment, disallowing some of the costs which might otherwise have been allowed, or making no costs order at all.
Some case examples of the breadth of approach by the courts include:
- Failure to serve a N260 – Rehill v Rider Holding Ltd [2014] EWCA Civ 42 at [30] “In order to mark our disapproval of the bus company’s failure to comply with the practice direction we ordered it to pay the costs of any detailed assessment in any event”.
- Failure to serve a N260 – R (on application of Kuznetsov) v London Borough of Camden [2019] EWHC 3910 (Admin) at [39] “It is my practice in such circumstances, where the court is charged with a duty to bring closure by summary assessment, and where there is a positive duty to file a Form N260, the legal advisers having failed to do so they, having made that bed, must lie in it and they will not get an award of costs. In relation to today there will be no order as to costs”
- Failure to serve a N260 – In R (on the application of the Solicitors Regulation Authority) v Imran [2015] EWHC 2572 (Admin) a notional award of costs of £5,000.00 was made.
- Failure to serve a N260 – There is a lucky escape with an order for detailed assessment made in Vine v Belfield [2021] EWHC 3068 (QB), but the Defendant did propose this.
- N260 filed but not served: Simpson v MGN[2015] EWHC 126 (QB) saw a reduction to costs to reflect additional costs caused by failure to serve the statement of costs.
- Costs details supplied, but no N260: In Mahandru v Nielson [2021] EWHC 2297 (QB) costs of £3,960 were sought but no statement of costs was filed or served, with costs restricted to Counsel’s fees only: “…the fault for not providing a schedule of costs clearly lies with the Defendant and it seems to me, in the circumstances, the only sums that I can properly summarily assess are the costs which I am told have been incurred in respect of counsel’s appearance at the hearing today and drafting of the skeleton argument.”
- Late / not in N260 format: In Changing Climates Ltd v Warmaway Limited [2021] EWHC 3117 (TCC) the court did not have the updated statement of costs and the Defendant only received it on the morning of the hearing. The schedule, which did not accord with the form N260, was hopelessly confused and not in the correct format, and consequently did not enable the Court to easily form a view as to what was proportionate, with a broad-brush approach taken.
- Late N260 – This was produced on the day of the hearing in Macdonald v Taree Holdings Ltd. At first instance the Deputy District Judge allowed no costs, at the first appeal the court held proportionate costs should be allowed and the Court of Appeal then refused permission to appeal, with comments on when a sanction is merited.
- Late N260 – InTribe v Elborne Mitchell LLP (Costs) [2021] EWHC 1252 (Ch) there was no obvious prejudice, and assessment in the usual way followed.
A couple of things to remember for summary assessment
Hourly rates: Be prepared to justify the hourly rates claimed. Per Samsung Electronics Co. Ltd & Ors v LG Display Co. Ltd & Anor (Costs) [2022] EWCA Civ 466:
“If a rate in excess of the guideline rate is to be charged to the paying party, a clear and compelling justification must be provided. It is not enough to say that the case is a commercial case, or a competition case, or that it has an international element, unless there is something about these factors in the case in question which justifies exceeding the guideline rate.”
CFA case: An order for the payment of the summarily assessed costs should not be made unless the court is satisfied that the receiving party is at that time liable under the agreement to pay to the legal representative at least the amount of those costs. If the court is not so satisfied, it may direct that the assessed costs be paid into court to await the outcome of the case or shall not be enforceable until further order. Think about packing a copy of the CFA to show the judge.
For further reading about what happens on summary assessment please see The Guide to the Summary Assessment of Costs 2021. If you are in any doubt, need assistance in drafting a schedule of costs or if you have any questions about the summary assessment of costs then please do get in touch with our legal costs specialists.
Caroline Engledow, Costs Lawyer
24.10.2024