SUMMARY ASSESSMENT OF COSTS: WHAT TO DO IF YOU ARE PRESSED FOR TIME

I am looking again at the judgment of HHJ Hodge QC in  Cohen v Fine & Ors [2020] EWHC 3278 (Ch) a because, in concentrating on the issues relating to hourly rates, the other important part of the judgment may be overlooked and this is worth looking at in isolation.  The judge sets out a number of observations on the appropriate approach where a judge is asked to conduct a summary assessment of costs but time is short.

“How can courts avoid the summary assessment procedure becoming “bedevilled by formulaic and time consuming intricacy which would often be wholly disproportionate to the exercise being carried out and the nature of the litigation in hand”

THE DISTRICT JUDGE’S SITUATION

The situation that the District Judge found themselves in will be familiar to most litigators.  At the end of a hearing, given a time estimate of an hour, the judge had five minutes to assess costs.

  1. In overruling her decision to summarily assess the claimant’s costs at £27,000, I should make it clear that I have every sympathy for the difficult position in which this very experienced and diligent District Judge found herself. This was a telephone hearing, conducted at a difficult time for the courts due to the pandemic and the consequent staff shortages and rapid and dramatic changes to working practices, where only one party was legally represented and the three defendants (all siblings) were representing themselves, with the first defendant being assisted by her husband and speaking from Massachusetts, USA. The hearing had been listed for only one hour, and the District Judge would appear to have had only five minutes left to hear from everyone on the highly contentious, and important, subject of costs. Understandably, the District Judge received no assistance from any of the defendants in terms of any objections to specific elements in the costs statement. She was taken to none of the relevant authorities which I have reviewed above; nor was she even taken to the relevant commentary in Civil Procedure. The District Judge was not referred to, or reminded of, paragraph 9 of Mr Fletcher’s skeleton argument (cited at paragraph 12 above); and nor was it submitted to her that, in view of the lateness of the hour, she should either re-list the matter for a future summary assessment or direct that the claimant’s costs should be the subject of a future detailed assessment. The District Judge no doubt bore firmly at the forefront of her mind that, having regard to the overriding objective and principles of proportionality, and as submitted in the same paragraph of Mr Fletcher’s skeleton, a summary assessment was to be preferred to a detailed assessment. The District Judge had only five minutes to undertake an exercise which, in the event, has taken the appeal court about two hours. She understandably took the view that, if Mr Fletcher had considered the one hour time estimate to be insufficient, he should have notified the court in advance. The District Judge was seeking to protect the defendants from what she regarded as an unreasonable claim for costs which could not be substantiated (as Mr Fine expressly recognised in his submissions to the appeal court). The District Judge’s ability to control the level of recoverable costs was constrained by her inability to rely upon the principle of proportionality (because of the indemnity basis of assessment). The approach which she proceeded to adopt was a realistic and pragmatic one that I have frequently adopted, without objection from the relevant parties. The only alternative available to her would have been to have adjourned the costs assessment, which would have led to still further costs being incurred; and these would probably have fallen to be visited upon the defendants. Unfortunately, the claimant has objected to the District Judge’s approach to the summary assessment; and that objection is supported and justified by binding authority.

THE OPTIONS OPEN TO THE COURT IN THIS SITUATION

JJH Hodge QC then sets forward a number of solutions available to the court and parties faced with such a situation.

  1. What lessons are to be learned from the present appeal? How might costs assessments be conducted in future cases, consistently with the need to further the overriding objective? How can courts avoid the summary assessment procedure becoming “bedevilled by formulaic and time consuming intricacy which would often be wholly disproportionate to the exercise being carried out and the nature of the litigation in hand” (to adopt the words of Black LJ)? First, the court should establish from the paying party how many, and which, individual elements of the statement of costs are subject to challenge. If there is simply no time available to undertake an item by item consideration of those elements, the court should make this clear; and it should ask whether all relevant parties expressly consent to the court adopting a broad brush, and global, approach to these disputed items, without minutely examining them in any detail. If such consent is forthcoming from all relevant parties, it should be expressly recorded in the court’s order. If no such consent is forthcoming from all relevant parties, then the court has the options of: (1) ordering that the assessment (and, if not previously determined, the incidence and/or the basis) of the costs of the relevant hearing will be determined on paper following upon an exchange of short, sequential written submissions from the relevant parties (as O’Farrell J did in Ohpen Operations); (2) re-listing the matter for a summary assessment of the costs; or (3) directing that the receiving party’s costs should be the subject of a detailed assessment. If a detailed assessment is ordered, the court should exercise its power under CPR 44.2 (8) to order the paying party to pay a reasonable sum on account of costs unless there is good reason not to do so. This salutary power should always be borne firmly in mind as an alternative to a rushed, and procedurally improper, summary assessment.