Notice to begin detailed assessment after liability ruling “premature”

A costs judge has set aside a claimant’s notice of commencement of detailed assessment because it was issued prematurely, after judgment was given on liability as a preliminary issue.

Master Leonard said this occurred quite often but also noted that interest was now running, and so the parties may wish to settle the costs.

In ABA v University Hospitals Coventry and Warwickshire NHS Trust [2022] EWHC B4 (Costs), a clinical negligence case, there was an order providing for liability and causation to be tried as preliminary issues.

In January 2021, Mr Justice Saini gave judgment for the claimant for 65% of damages to be assessed. His order, made by consent, provided that the defendant pay the claimant’s costs.

In November, Master Cook ordered that the claim remained allocated to the multi-track and was assigned to him for case management of the quantum element of the case. The trial is scheduled for 2023, with a time estimate of 10 days.

Before that, in August, the claimant issued notice of commencement of detailed assessment proceedings for the costs of the liability trial, citing as the authority Saini J’s order and enclosing a bill for nearly £830,000.

Disputing the defendant’s argument that, in the absence of an order for immediate detailed assessment, the notice was premature, the claimant contended that, for the purposes of CPR 47.1, the January order was a final order determining the matters in issue in the claim.

The defendant cited in particular the ruling of Mr Justice Morritt (as he then was) in the pre-CPR case of Molnycke AB and Another v Procter and Gamble Ltd and Others (No6) [1993] FSR 154.

However, Master Leonard rejected this, holding that the position both under the CPR and, previously, the Rules of the Supreme Court, was that, absent an order for immediate detailed assessment, the costs of a preliminary issue could not be assessed until the proceedings as a whole have concluded.

The defendant’s argument that establishing liability and quantum did not, for the purposes of the CPR, form part of the same claim, would be “highly dubious even if there were not clear and unequivocal authority on the appropriate application of CPR 47.1 which, to my mind, shows that the claimant’s position is unsustainable”, the judge said.

After setting aside the notice, Master Leonard added some “observations”, including that it was not uncommon for receiving parties in cases like this to commence detailed assessment proceedings, or even for paying parties to serve points of dispute, without realising that it was premature to do so under CPR 47.1.

“I am aware that both parties in this case corresponded over a period of months on the mutual understanding that the claimant could proceed immediately to the detailed assessment of the costs of the liability issue. As I have said, such mutual misunderstandings are quite common.”

He added that he had previously ruled that the correspondence did not amount to a written agreement meeting the requirements of paragraph 1.2 of practice direction 47.

“I will only say, with apologies for perhaps stating the obvious, that the default position being that interest will accrue upon the claimant’s unpaid liability costs at 8% per annum, it might be to the parties’ mutual advantage to use the work done to date in an effort to settle what would appear to be a substantial claim for costs.”

James MacPherson for the claimant and Ben Petrecz for the defendant.

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Costs News
Published date
27 Jan 2022

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