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Commencing Detailed Assessment – New Precedent Q

A significant change to the Civil Procedure Rules was introduced with effect from 1 October 2015. By “The Civil Procedure (Amendment No 4) Rules 2015 ”an additional requirement has been added to the documents to be served in certain circumstances when Detailed Assessment proceedings are commenced.

CPR 47.6 has been amended by the addition of a new sub-paragraph, (1)(c), which says that in addition to the previously required Notice of Commencement and Bill of Costs, there must also be served:

“If a costs management order has been made, a breakdown of the costs claimed for each phase of the proceedings”

Therefore if during the course of the proceedings, the Court has approved or fixed a Budget, then this additional breakdown must be supplied.

The Practice Direction to Part 47 has also been amended and provides a model form of document, called Precedent Q, which can be used for this purpose. The model Precedent Q can be found on page 9 here. The form may well need to be adapted to suit the phases of any given litigation.

This is obviously an important development and will have a number of consequences.

If Detailed Assessment proceedings are commenced without this document, then the rule will have been breached and the commencement will be defective. Of itself, this probably would not lead to any need for an application for relief from sanction (on the basis that there is no particular sanction specified in the Rules) but of course it could mean that the period provided for within the rules for such proceedings to be commenced (3 months from the date of the order for costs) may be exceeded if the purported commencement is found to be invalid. That would give rise to a risk of an application from the opponent.

There is also a risk of an application requiring the breakdown to be provided if there has been a failure to provide it initially.

The need for this amendment has been obvious for a considerable amount of time. How is the Court to determine whether the set Budget has been exceeded without such a breakdown? The format of Bills and the format of Budgets, at present, is so different that such an analysis is impossible. It is important to note that the analysis required is by phase of the Budget and not the overall total of the Budget. Therefore, it has been and will continue to be insufficient simply to point to the Bill and say that overall it comes in under the total amount set for the Budget.

It should be noted that CPR 3.18 says that the Court will have regard to the last approved budget when assessing costs on the standard basis and will not depart from the Budgeted amounts for the phases unless satisfied that there is good reason to do so. Therefore, it is clear that on any assessment, the Court must know how the costs claimed compare to the Budget. It is also clear from the Rule that even if the Budget has been exceeded, there is still some prospect of recovering more if the “good reason” can be established.

It seems to us that even in cases where assessment proceedings have already been commenced, a request for a breakdown in the form of Precedent Q will be treated as entirely reasonable. A refusal to prepare such a document which leads to an application in that regard, would, in our view, almost certainly mean that the receiving party would face adverse costs consequences of such an application.

Thus, whilst the rule only provides for Precedent Q to be supplied with proceedings commenced from 1 October 2015, almost inevitably the document will become widely used in all assessment proceedings.

Please contact us should you require any assistance. Our expert team are on hand to deal with your instructions.

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