A monster of its own making

Provisional assessment of costs should have been one of the quick wins from the Jackson reforms. Unfortunately, it does not seem to have turned out that way. The concept remains sound, however. If the teething issues are resolved, there remains the potential for further changes and real savings in litigation costs.

There are two main evils of the detailed assessment process. The first is the need to draw up
a detailed bill of costs itemising each separate piece of work carried out on a file, set out in
a format that is familiar and convenient for costs judges – albeit one which never reflects the manner in which the work was actually carried out or recorded at the time. Lord Justice Jackson described bills of costs as ‘based on the style of a Victorian account book’ – expensive to produce and not necessarily helpful.

However, a redesign of the content and format of a bill of costs was a step too far for his review. He simply recommended that a new format of bills of costs should be devised and that software should be developed, which all solicitors would use for time recording and which could automatically generate statements for summary assessment and bills for detailed assessment. Six years on, the development of this magical software is still awaited.

Assessment delay

The second evil involved the delay in detailed assessment. Jackson’s answer was a provisional assessment on the papers. The amended Costs Practice Direction provides (at paragraph 14.4 of PD47) that the court will ‘use its best endeavours to undertake a provisional assessment within six weeks’ of one being requested.

The success of provisional assessment depends on its being undertaken relatively swiftly, following a process that is clearly understood and not unduly onerous. Unfortunately, the language of the practice direction has not helped. In practice, provisional assessments are
not being completed quickly and neither is the process clear and consistent.

On the speed of turnaround, Master Peter Haworth of the Senior Courts Costs Office (SCCO) is reported to have said at the SJ Live conference in February 2015 that ‘the six-week target for provisional assessment is a joke – no court is complying’.

Continuing confusion

Confusion also remains over certain key aspects of the process. For example, in advance of a detailed assessment hearing, the receiving party is required to lodge their file of papers to enable the costs judge to check for documentary support for the time claimed to have been spent. Provisional assessment was intended to do away with all that, with the court coming to
a provisional view without the time involved in scrutinising the file (and without putting the receiving party to the time and expense of organising and lodging the papers). The obligation to lodge the supporting papers in connection with a detailed assessment is contained in paragraph 13.11 of PD47, which is expressly disapplied from provisional assessments by virtue of paragraph 14.2(2).

Nevertheless, many courts (including, most importantly, the SCCO) still require receiving parties to lodge their full file of papers in advance of all provisional assessments. This, it is suggested, somewhat defeats the point.

Mercifully, most costs assessments settle because the end result is broadly predictable and the range of realistic outcomes is outweighed by the further irrecoverable costs that would be incurred in trying to achieve an outcome at one end of the range from the other. Provisional assessments should help parties move more rapidly to that result. It is not so important that the final amount assessed is ‘spot on’, simply that it is within an acceptable margin of error, always protected by the safeguard of the right to an oral hearing if need be.

The SCCO’s practice appears to reflect an entirely laudable desire to conduct provisional assessments in a manner which produces the most accurate outcome possible. Master Haworth was also reported to have said that ‘other than in London, district judges are doing provisional assessments without seeing the papers – you may as well toss a coin’. This implies that a provisional assessment is akin to a detailed assessment on the papers, whereas it was intended to be a different beast altogether. 

Richard Langley is a London Solicitors Litigation Association (LSLA) committee member and head of litigation and dispute resolution at Bircham Dyson Bell @BDB_Law