Page 15 - PIC Magazine Issue 21
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The Costs Judge that is having to wait while that scrambling around is being undertaken is not a happy judge and as a human will likely become increasingly less well- disposed to the receiving party’s claim for costs as the assessment progresses; costs will be reduced by a greater amount as a result.
It may well also sound in any allowance made for costs of the assessment proceedings, as was seen for instance in Deutsche
Bank AG v Sebastian Holdings Inc [2023] EWHC 9 (SCCO) where
only 70% of the receiving party’s reasonable costs of the assessment proceedings were to be allowed
on account of the prolongation of the assessment hearing as a result of a lack of attendance notes and an approach of generally recording time in composite entries which did not distinguish the time spent on individual elements.
Recording time and an appropriate level of detail for work done will remain key in those situations where your costs will still need to be assessed. Where you seek from your client any shortfall in costs not recovered inter partes, you can expect fees to be challenged, and Menzies v Oakwood Solicitors Ltd [2023] EWCA Civ 844 is a useful reminder of the obstacles solicitors need to traverse in order to ensure that the twelve-month time limit under s.70(4) of the Solicitors Act 1974 has begun to run in order to avoid that happening years after conclusion of the instruction.
Where such costs are subject to assessment, then per Costs Judge Brown in BCX – v – DTA [2021] EWHC B27 (Costs), sustaining inter partes shortfall against your own client will present difficulties in
any event and does not need to
be further hampered by a lack of useful documentation to support claims made, as ‘plainly despite the different basis of assessment, the presumptions [on a solicitor and own client basis] will not necessarily lead to any greater sum being payable than would be the case on a standard basis assessment. This is plainly so since the very concerns which give rise to disallowances of costs inter partes can also give rise to deductions from claim under
an assessment on the indemnity basis... so the basis of the assessment may make no difference to the allowance.’ Autumn & Winter 2023
  Leaving aside the potential that you may have contracted out of fixed costs with your opponent, there are two situations which will give rise to an assessment
of some sort within the context of the new fixed costs regime; where there are exceptional circumstances, and where a party or witness is vulnerable.
Under what will be the new CPR 45.9, the Court may consider a claim for an amount of costs greater than the fixed recoverable costs, where there are exceptional circumstances making it appropriate to do so (likely a high bar to overcome), in which case it may summarily assess the costs or order that they be subject to detailed assessment. The entirety of your costs will be open to assessment in this situation.
Separately, there is a multi-stage test that can potentially be engaged on account of vulnerability (per what will be CPR 45.10). It will apply where a party or witness for the party (i) is vulnerable (within the meaning of Practice Direction 1A), (ii) that vulnerability has required additional work to be undertaken, and (iii) by reason of that additional work alone, the claim is for an amount that is at least 20% greater than the amount of fixed recoverable costs. Again, the court will be empowered to either summarily assess the costs or make an order for the costs to be subject to detailed assessment, which may lead to an assessment of the whole costs, not only those solely referable to vulnerability. To demonstrate (ii) and (iii) will require detailed records of the work done, showing that vulnerability was the cause of additional work and for that reason alone your total costs exceed the fixed costs by 20% or more, i.e. you will need to be exact and specific in your record keeping.
Whilst these potential escape clauses are welcome, in practice they will likely be difficult to engage successfully, given the tiered and caveated approach, that the rules are framed such that criteria having been met the court is then only obliged to ‘consider’ a claim in excess of fixed costs, and also the built-in brake of what will be CPR 45.11; if the court does conduct an assessment and the resulting allowance is less than 20% more than the fixed costs, the Court will only order the lesser of the fixed costs and the assessed costs (contemplating the potential scenario of the court having reduced your costs to less than the fixed costs). In order to sustain such claims for costs, attendance notes explaining the work done and the need for it will be key, bearing in mind that any such assessment is likely to take place years after the work was done when the finer (and possibly persuasive) details will be a distant and inaccessible memory unless properly recorded.
With this in mind, attendance notes that reflect such matters as the following will serve you well when you inevitably face assessment at some point:
The date, and often the time of day.
What you did and the reason you had to do it where not immediately obvious.
Specifically which version of any particular document you prepared.
Why it was necessary to amend or add to any document, or review a matter previously considered.
The documents you considered in order to complete the task at hand, often assisted by specific page or paragraph numbers in longer documents.
Any problematic features or issues and how they have impacted the time spent or work required.
The state and order of documents received from external providers, bearing in mind that disorder may later not be apparent where you have had to organise them for your file.
Nothing in this is to suggest that your records need to be excessively long (concision and precision will be appreciated by the judge), or that much should be made of very little; if there is nothing to record, you can leave it at that, but otherwise do make sure you tell the full story.
          Dominic Woodhouse is the National Training Manager – Advocate at PIC.

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