COSTS MONKEY

IN CIVIL PROCEEDINGS

When are they required?

 

In civil cases Estimates of Costs (CPR Precedent H) should most commonly be produced:

 

- At Allocation Stage

 

- At Listing Stage

 

- Within 28 days the court making an order for disclosure of estimates (unless otherwise specified by the order).

 

Under Rule 3.1 a new section was inserted into the CPR (2005 amendment no.3) after sub-paragraph (1) to say that the courts have been given extra powers at (11) to “order any party to file and serve an estimate of costs;".

 

You do not need to file and serve an Estimate at Allocation stage if the claim is pleaded as a Small Claim or if you are a Litigant in Person.

 

What should be included?

 

The relevant part of the Civil Procedure Rules is Costs Practice Direction 6. This part sets out that an Estimate of Costs should include:

 

- Base profit costs and disbursements incurred to date

 

- An estimate of Base profit costs and disbursements to be incurred, in so far as the party preparing the Estimate expects to recover from the opponent if that party is successful.

 

Additional Liabilities

 

A party is not required to disclose any additional liabilities in the Estimate. See CPD 6.2(2).

 

The effects on Assessment

 

The courts can have regard to Estimates previously filed, on Summary Assessment.

 

On Detailed Assessment, a paying party can seek a statement of explanation from the receiving party if a final bill varies, by more than 20%, from an Estimate previously served. The Court may consider the variation and reasons given in considering whether the overall costs claimed are disproportionate or unreasonable in amount.  

 

The Court may also refer to Estimates of Costs when deciding what amount should be paid by way of a payment on account of costs prior to an assessment of costs. See CPR 44.3(8).

 

Cases to consider

 

One of the most significant decisions to deal with the importance of Estimates of Costs and implications on between the parties costs recovery is Edwards -v- Garbutt [2005].  

 

Others include:

 

Wong -v- Vizards [1997]

 

Solutia UK -v- Griffiths [2001] EWCA Civ 736

 

Master Cigars -v- Withers LLP

 

Leigh -v- Michelin Tyres

 

Burns & Adcock -v- Novartis Grimsby Ltd & Tioxide Group [2004] QBD Sheffield, 16th February 2004

 

The Claimant’s costs were not limited to the amount stated in their Estimate of Costs filed at Allocation stage. The circumstances of the case had changed significantly since the allocation questionnaires were filed. The case had become complex because of issues raised in the Fairchild -v- Glenhaven Funeral Services Ltd [2002] UKHL 22 case. In the circumstances it was not considered appropriate for the Estimate to be used when assessing costs.

 

For an authority on Estimates of Costs and the effects on orders for security for costs see Biomark Products -v- Bragg [2003] EWHC 1767 (Ch).

 

In France -v- McVeigh [2003] Doncaster County Court, 26th June 2003, the Defendants failed in their attempt to apply for an order capping costs in the early stages of a low value RTA case. It was considered disproportionate to spend time carrying out such an exercise. Such application only served to increase costs in low value cases. Detailed Assessment at the end of the case would ensure that proportionate costs would be awarded. Furthermore, limiting the costs at an early stage could mean that the parties would not be on an “equal footing” as per the Overriding Objective of CPR 1.1.

 

In Willis -v- Nicholson [2007] - Costs capping cannot be retrospective. The Court of Appeal directed the question of Estimates and costs capping to the Rules Committee.

 

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Costs Monkey

Content last updated: 30/10/09