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Summary Assessment - Pilot

Whenever the Court make an order for one party to pay another party’s costs, they will either undertake a summary assessment, or make an order for a detailed assessment of the receiving party’s costs.  This is confirmed in CPR r44.6.

Paragraph 9.2 of Practice Direction 44 confirms that, unless there is good reason for doing so,  the Court should undertake a summary assessment at the conclusion of a fast track trial, in which case the Court will assess the whole costs of the claim, or at the conclusion of any other hearing, which has not lasted more than 1 day.  In the latter case where the hearing relates to an application it is the costs of that application which will be subject to a summary assessment, but when the hearing disposes of the claim the Court may deal with the whole costs of the claim.

In order to assist the Court any party seeking costs must file and serve a statement of costs in accordance with Paragraph 9.5 of the Practice Direction using the Form N260 or similar.  Where a claim is listed for a fast track trial the statement of costs must be filed and served not less than 2 days before the trial, and not less than 24 hours before any other hearing.

There are some exceptions.  The Court will not make a summary assessment where the receiving party is in receipt of Legal Aid, or when the receiving party is a child or protected party unless the legal representative has waived the right to further costs.

In claims where fixed costs are payable it will normally only be necessary for the parties to be able to confirm to the Court the fixed costs payable, however there are some instances where it would be prudent to file and serve a statement of costs in advance of a fast track trial, such as where a Claimant feels they may beat their own Part 36 offer at trial in which case they would seek costs on the indemnity basis for the period beginning 21 days after the Part 36 offer was made in accordance with the decision of the Court of Appeal in Broadhurst v Tan [2016] EWCA Civ 94.  I have also heard of cases where the Court limited a successful Claimant to fixed costs only, despite them beating their own Part 36 offer at trial, due to their failure to file a statement of costs.

At the end of a fast track trial there is often little time for the Court to undertake a summary assessment and a risk therefore that the process is rushed.  In those cases, it is often more beneficial to the receiving party in the long run for the Court to make an order for detailed assessment of the successful party’s costs.  Particularly, as the advocate dealing with the trial is unlikely to have prepared the statement of costs and is perhaps not the best person to deal with any issues raised by the Court, or the paying party, during the summary assessment.

Since 1 April 2019 there is now also provision for the summary assessment of costs following other hearings, such as trials in multi-track claims which have been subject to costs management, under a pilot scheme set out in Practice Direction 51X which saw the introduction of Forms N260A and N260B.  The former can be used as an alternative to Form N260 when seeking the costs of an interim application and the latter is to be used for summary assessments following a trial and separates costs into the various phases of a costs budget so that the Court can ensure the costs claimed do not exceed an agreed or approved budget.  Where a party seeks a summary assessment in a claim subject of a costs management order they must also file and serve a Precedent Q at the same time as the N260B.

Paragraph 5 of PD 51X suggests that parts of the N260A and N260B forms can be created from electronic time records.  Even if a firm’s time recording system allows that it is still likely to take longer to complete Form N260A than it would the simpler N260 and it is not immediately clear to see what benefit there would be to a party using the new form as opposed to the old which is familiar to solicitors, costs lawyers and judges.  It is also going to take considerable time to complete Form N260B before a multi-track trial. 

Prior to the hearing of a contested application or trial, a party cannot be certain that they will be successful and awarded costs, never mind that the Court will have the time or the desire to undertake a summary assessment at the conclusion of it.  The costs incurred preparing either of these statements of costs may not be recovered and it is unlikely that there will be a significant uptake in the pilot.  This appears to be a common theme after The Law Society Gazette recently reported that there had been no cases allocated to the capped cost pilot for cases in the business and property courts in Leeds, Manchester and London.  There was also very little uptake in the voluntary pilot that ran in the Senior Court Costs Office for use of the electronic bill of costs which had to be extended from 6 months initially, to 2 years before the electronic bill was made compulsory on 6 April 2018.

The main benefit of costs being dealt with by summary assessment is that they will be dealt with on the day of the hearing or trial and delays which can be encountered in detailed assessment proceedings are avoided.  Maintaining cashflow should not be too much of a concern though as when making an order for detailed assessment the Court should, unless there is good reason not to do so, make an order for an interim payment on account of costs as explained in detail in our previous blog.

In cases which have been subject to costs management the Court are quite likely to order a high proportion of the budgeted costs to be paid as an interim.  In Orexim Trading Limited v Mahavir Port and Terminal Private Limited [2019] EWHC 2338 (Comm)The Court ordered the Defendant to pay the Claimant an interim payment of around 85% of the budgeted costs.

If you require further advice in relation to summary or detailed assessments, or need any statements of costs prepared please get in touch.

About the author

Gavin Elliott

Gavin Elliott

Gavin is a specialist Costs Lawyer and member of the Association of Costs Lawyers.

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