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Statements of Costs for Summary Assessment

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Whenever a Court makes an Order about costs which does not provide for fixed costs to be paid, the Court will consider whether to make a summary assessment of costs.

Whenever a Court makes an Order about costs which does not provide for fixed costs to be paid, the Court will consider whether to make a summary assessment of costs.

To enable a summary assessment to take place then all parties must have filed and served a statement of costs no later than 24 hours before the hearing is listed to take place.

The statement of costs must show the following items:

The number of hours to be claimed.
The hourly rate to be claimed.
The grade of fee earner.
The amount and nature of any disbursements to be claimed, other than Counsel's fee for appearing at the hearing.
The amount of solicitor's costs to be claimed for appearing at the hearing.
The fees of Counsel to be claimed in respect of the hearing.
Any Value Added Tax (VAT) to be claimed.

The statement of costs should follow as closely as possible form N260 and must be signed by the party or his legal representative.

It is not compulsory to use Form N260 but the above requirements must be met when preparing a statement of costs. 

CPR 44 PD 13.6 gives guidance as to the consequences for a party who fails to file and serve a statement of costs for summary assessment 24 hours before a hearing is listed to take place.  It states the following:

"The failure by a party, without reasonable excuse, to comply with the foregoing paragraphs 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"

It is therefore extremely important that a costs statement is filed and served within the prescribed time limit as failure to do so could result in the paying party making an application for their costs to be paid by the receiving party. This is because the paying party could be ready to proceed with a summary assessment, but the failure by the receiving party to file and serve a statement of costs could result in either an adjournment or order for detailed assessment being made by the Court. The paying party could then argue that the receiving party should be liable for the costs of the adjourned hearing or the detailed assessment proceedings, as it would be their non-compliance which created the adjournment or order for detailed assessment to be made.

Another issue to consider is where the receiving party fails to file and serve a costs statement, but produces one at the hearing when the Judge turns to deal with the issue of costs. This could be argued as "advocacy by ambush" and cause prejudice to the paying party as they would not have not had time to consider the costs statement and prepare any costs submissions. The CPR requires each party to be on an equal footing and the production of a statement of costs at a late stage would place the paying party in a less than equal position to the receiving party.  Again, this could have costs consequences (as mentioned above) for the receiving party.

An interesting case to consider on this issue is that of MacDonald v Taree Holdings (2000) All ER (D) 2204.  In this case the appellant had successfully applied to set aside a statutory demand.  They failed to file and serve a statement of costs 24 hours prior to the commencement of the hearing.  The appellant was not allowed their costs of the application as there was no reasonable excuse for the failure.

The appellant successfully appealed the decision. It was ruled that the failure to serve the statement did not result in any aggravating factors.  However, if aggravating factors did arise then it would be just to deprive the successful party of all or a proportion of their costs.  This case therefore demonstrates the risk of failing to file and serve a statement of costs for summary assessment.

The Costs and Litigation Funding team at Clarion have a wealth of experience in preparing statements of costs for summary assessment and cater for requests at late notice. 

We have a custom made statement of costs which we have found increases recoverability given the transparency and information that it provides. It is easier to understand than form N260, provides greater information and assists if an order for detailed assessment is made.

We appreciate that costs is often something at the back of a fee earner's mind, especially when they are working on an urgent application. Therefore why not instruct us to prepare your cost statements and we will ensure that they are not only prepared to the highest quality but are also ready to be filed and served prior to the 24 hour deadline.

If you would like further information about any of the matters raised in this article then please contact Andrew McAulay (a.mcaulay@clarionsolicitors.com) of our Costs and Litigation Funding Department.

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.