ISSUING NOTICE OF COMMENCEMENT OF COSTS PREMATURELY: CAN CAUSE PROBLEMS: CLAIMANT SUCCESSFUL ON THE THIRD ATTEMPT

August 10, 2017 · by · in Civil Procedure, Costs, Part 36

There is an article on the Temple Garden Chambers website of the decision of Master Gordon-Saker of the judgment in Austin -v- East Sussex Fire and Rescue Service (08/08/17).  The report concentrates upon the Master’s decision that  he would not order a bill of costs to be re-drafted to isolate out “common costs” and  non-specific common costs. The Master refused the defendant’s application because it would be disproportionate. I recommend that everyone read the article and the transcript of the judgment itself, which is linked to the site.

The judgment, however, contains an interesting account of how the claimants had, twice, issued a notice of commencement prematurely.

KEY POINTS

  • Success at a trial on liability alone does not lead to a right to have costs assessed forthwith, unless the judge specifically orders this (and this order will not be made automatically).
  • Acceptance of a Part 36 offer out of time does not give rise to an entitlement to have costs assessed.
  • It was necessary for the claimant to issue a notice of assessment three times. The first two times the issue was not valid as there had been no actual, or deemed, order in relation to costs.

THE CASE

The claimant obtained judgment against the first defendant by default.  He was successful against the second defendant after a trial on liability. At that trial the judge ordered the second defendant to make an interim payment on costs but did not make any order for costs to be assessed.  The defendant subsequently made an offer of settlement. This was accepted out of time.

THE JUDGMENT

5. On 22nd December 2014 the Second Defendant made a Part 36 offer to settle the Claimant’s claim for the sum of £25,000. The Claimant did not accept that offer within 21 days (ie by 12th January 2015), but did accept it on 3rd July 2015.

6. Meanwhile, on 19th March 2015 the Claimant’s solicitors served a notice of commencement and bill of costs in the sum of about £720,000. Given that the claim had not then concluded and that the order of Irwin J had not provided for detailed assessment forthwith that was premature.

7. Following the late acceptance of the Part 36 offer, the Claimant’s solicitors served a further notice of commencement and bill of costs in the sum of about £755,000 on 15th September 2015. Given that late acceptance of a Part 36 offer does not lead to a deemed order for costs, that too was premature.

8. An application for an order for costs was then made to the court and the matter came before Deputy Master Leslie on 17th June 2016. The court’s order noted that “the applications relating to the notices of commencement and/or service of the Claimant’s bill of costs are matters for the Senior Courts Costs Office” and provided:

1. The Second Defendant do pay the Claimant’s costs of the proceedings up to 12 January 2015 as against the Second Defendant only; such costs to be assessed on the standard basis by detailed assessment if not agreed.

2. For the avoidance of doubt paragraph 1 provides that the Second Defendant pay the Claimant’s costs:

a) incurred exclusively against the Second Defendant;

b) non-specific common costs; and

c) the appropriate share of the specific common costs as determined by the Costs Judge if not agreed. 9.

The Claimant was ordered to pay the Second Defendant’s costs after 13th January 2015 and the Second Defendant was ordered to pay the Claimant a further sum of £150,000 on account of costs.

10. A third notice of commencement and a bill of costs in the sum of £798,554 were served by the Claimant’s solicitors on 9th January 2017.

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