Provisional Assessments limited to £75k? CPR 47.15

There is a survey being undertaken at the moment on behalf of the ACL as to its members’ views on the effectiveness of the Provisional Assessment (CPR 47.15) process. Let us hope that all members respond fully so that the many and various issues (which we have raised in these articles in the past) can be fully aired.

One of the questions is whether the £75,000 limit is appropriate. The initial pilot scheme was limited to bills up to £25,000 and seemed to work well. This is an area which has caused much debate and has been fuelled more recently by the approach of some Judges. Those Judges consider that £75,000 figure is that which is arrived at exclusive of VAT on the basis that the definition of “Costs” within the rules does not specifically include VAT, which is defined separately elsewhere.

Quite how such a literal interpretation of “costs” in that context would work out if it were more widely applied is a matter for some conjecture (does it mean that an order for costs must explicitly state that it is for costs and VAT?).

Is the £1,500 plus VAT and Court fee cap on recoverable costs of Provisional Assessment reasonable where Bills are £75,000 (or even above if that figure is exclusive of VAT)?

Perhaps there needs to be a change in mindset and that these matters should be approached somewhat differently. Should we all suppose that these bills at the top end of the limit are more likely than not to go to an oral hearing and proceed accordingly? In other words, we would treat the Provisional Assessment as no more than a tool to attempt to narrow the issues between the parties. Perhaps it could be regarded as a somewhat more effective method of narrowing those issues than the joint discussion/statement Practice Directions previously commonly issued in some Courts.

Rather than simply looking for particular injustices which would lead to an application for an oral hearing, perhaps that should be considered the more likely route that the claim will take.

There would remain of course the obvious risk that far more in costs had been incurred than would ever be recoverable if the Provisional Assessment were to ultimately determine the matter, but again maybe that is a price worth paying if the effort expended upon the Assessment process leads to a better result.