19 August 2013Print This Post

Clarification of provisional assessment costs welcomed

Heining: clarification welcomed

Costs specialists have welcomed clarification that the court fee and VAT are not included in the costs awarded in provisional assessment proceedings.

There was widespread criticism of the way the Civil Procedure Rules were drafted in April for not saying what was included in the costs, which are capped at a maximum of £1,500.

However, the October CPR update amends rule 47.15(5) to: “In proceedings which do not go beyond provisional assessment, the maximum amount the court will award to any party as costs of the assessment (other than the costs of drafting the bill of costs) is £1,500 together with any VAT thereon and any court fees paid by that party.”

Murray Heining, chairman of the Association of Costs Lawyers, said: “We welcome the clarification the amendment provides.”

Well-known costs blogger Simon Gibbs argued that without any transitional provisions, there remains no scope for judges to take a purposive interpretation of the old rule to except VAT and the court fee.

“The problem arises because clearly no thought was given at the time of drafting the current rules as to what the £1,500 was meant to cover. There was no clear ‘purpose’ beyond limiting the total amount. As the term ‘costs’ is clear and well established, it leaves no (proper) scope for judges to give it a different or more limited meaning.

“Now we do have a new definition, it must be clear that additional liabilities are included within the £1,500. This is no more rational, or irrational, then excluding VAT. It is a policy decision. However, until the new policy was announced (by publication of the rules) there was no way for judges to know what was behind the policy that led to the current wording and, indeed, we still do not know.

“It would be pure speculation to say that because this is what the wording will say from 1 October 2013 that must have been what was intended in April 2013.”

He added that although the time spent “drafting” the bill of costs is allowed in addition to the £1,500 in the amended wording, there is no provision for the additional costs of checking the bill and signing the certificate, unlike the rules for detailed assessment. “Another oversight or intended?” he asked, adding that the same question arises in relation to work done in connection with issuing costs-only proceedings.

By Neil Rose