Key Point
- CPR 36.17(4) does not apply to the costs of detailed assessment proceedings.
CPR 36.17(4) applies where a Claimant beats its own Part 36 Offer in substantive proceedings bringing with it various rewards including a 10% uplift, enhanced interest and indemnity costs.
The question to be addressed in this case was whether it applies equally to the costs of detailed assessment i.e. can you make a valid Part 36 Offer in respect of the costs of the detailed assessment proceedings and reap those same rewards if it is beaten?
In other words, do the the costs of the detailed assessment proceedings, for the purposes of CPR 36.17(4), fall within “any issue that arises in the claim”?
The Claimant argued that they do.
Master Leonard disagreed:
“If the Claimant is right then any Part 36 offer made as to the costs of assessment would, on acceptance, result in a further deemed order for costs under CPR 44.9(1)(b)… The receiving party would, accordingly, be entitled to draw up another bill to cover its costs of working on the costs of the detailed assessment, and to start a new set of proceedings for the detailed assessment of those costs. To avoid a Default Costs Certificate, the paying party would have to file Points of Dispute. The receiving party could then apply for detailed assessment and, pursuant to CPR 47.20, seek not only “the costs of the costs” claimed in its bill, but the additional costs of the new set of detailed assessment proceedings. The receiving party could also make yet another Part 36 offer as to the costs of the new detailed assessment proceedings. If the paying party were to refuse to accept that offer, it would be at risk of incurring the additional penalties provided for by CPR 36.17. If it did accept the offer, then the receiving party could start again with another bill claiming “the costs of the costs of the costs”.
“there is at least the potential for an indefinite cycle of Part 36 offers and new detailed assessment proceedings, each parasitic upon the last. Even one such parasitic set of detailed assessment proceedings would be disproportionate, duplicative and unfair to the paying party. That is not consistent with the overriding objective.”
BEST V LUTON & DUNSTABLE HOSPITAL NHS FOUNDATION TRUST [2021] EWHC B2 (COSTS)
BEATEN CLAIMANT OFFER | CLAIMANT’S PART 36 OFFER | PART 36 | PART 36 OFFER | CPR 36.17(4) | COSTS OF DETAILED ASSESSMENT PROCEEDINGS
BEST V LUTON & DUNSTABLE HOSPITAL NHS FOUNDATION TRUST | KEY EXCERPTS
“The provisions of CPR 36.17(4) are prescriptive. The court must, unless it considers it unjust to do so, order that a claimant (in detailed assessment proceedings, the receiving party) receive all of the listed awards including indemnity basis costs and additional interest on those costs. That envisages a claim, or part of a claim or an issue in a claim, which is in itself capable of conferring an entitlement to costs. In short, it would be what is described at CPR 47.20(7) as an independent claim. The costs of detailed assessment proceedings do not carry their own costs and do not meet that criterion.” [40]
“That takes me to what seems to me to be a decisive obstacle for the interpretation of the rules contended for by the Claimant. If the Claimant is right then any Part 36 offer made as to the costs of assessment would, on acceptance, result in a further deemed order for costs under CPR 44.9(1)(b). By virtue of Practice Direction 44 paragraph 8.2, that deemed order would be an authority for detailed assessment.” [41]
“The receiving party would, accordingly, be entitled to draw up another bill to cover its costs of working on the costs of the detailed assessment, and to start a new set of proceedings for the detailed assessment of those costs. To avoid a Default Costs Certificate, the paying party would have to file Points of Dispute. The receiving party could then apply for detailed assessment and, pursuant to CPR 47.20, seek not only “the costs of the costs” claimed in its bill, but the additional costs of the new set of detailed assessment proceedings.” [42]
“The receiving party could also make yet another Part 36 offer as to the costs of the new detailed assessment proceedings. If the paying party were to refuse to accept that offer, it would be at risk of incurring the additional penalties provided for by CPR 36.17. If it did accept the offer, then the receiving party could start again with another bill claiming “the costs of the costs of the costs”.” [43]
“As Mr Clegg for the Defendant points out, there is at least the potential for an indefinite cycle of Part 36 offers and new detailed assessment proceedings, each parasitic upon the last. Even one such parasitic set of detailed assessment proceedings would be disproportionate, duplicative and unfair to the paying party. That is not consistent with the overriding objective.” [44]
“In summary, my conclusion is that the costs of the detailed assessment proceedings do not, for the purposes of CPR 36.17(4), fall within “any issue that arises in the claim”. The Claimant’s submission that it does seems to me to be inconsistent with the way in which CPR 36 has been interpreted since well before 2013. It is also, in my view, inconsistent with the full provisions of CPR 36.17. To accept it would be to override my obligation to interpret the Civil procedure rules in accordance with the overriding objective.” [45]
Link to Judgment
BEST V LUTON & DUNSTABLE HOSPITAL NHS FOUNDATION TRUST | FULL DECISION
MASTER LEONARD:
35. I am called upon to interpret the Civil Procedure Rules, and in doing so I am required by CPR 1.2 to give effect to the overriding objective of dealing with cases justly and at proportionate cost.
36. Thanks to CPR 47.20(7), detailed assessment proceedings are treated as an independent claim. The question I have to decide for present purposes is whether the award and the quantification of the costs of assessment fall, as the Claimant contends, within “any issue that arises in” that independent claim for the purposes of CPR 36.2(3). My conclusion is that it does not, for these reasons.
37. The first is that before the introduction of the Part 36 regime to detailed assessment proceedings in 2013, it was already possible to make an offer in respect of the whole, or part of, any issue that arose in a claim. The relevant wording appeared at wording of CPR 36.2(2)(d). If the issues arising on the detailed assessment of costs were issues in the claim for the purposes of CPR.2(2)(d), it would already have been possible to make a Part 36 offer in detailed assessment proceedings and it would not have been necessary, in 2013, to make specific provision to introduce the Part 36 regime to detailed assessment.
38. The necessary implication is that the issues referred to, Pre-April 2013, at CPR 36.2(2)(d) were the issues in the claim itself, which had been determined by the time an order for costs was made. Any award and assessment of costs would follow, as a separate process, once those issues had been determined (whether by agreement or judgment).
39. The same must be true of CPR 36.2(2)(d). CPR 47.20(7) allowed these detailed assessment proceedings to be treated as an independent claim. The issues in that claim were set out in the bill of costs, points of dispute and replies. They were resolved on the Defendant’s acceptance of the Part 36 offer. The award and quantification of the costs of assessment followed, but they were not issues in the deemed independent claim, all of which had already been resolved.
40. This conclusion seems to me to be supported by the wording of CPR 36.17(4) itself.
The provisions of CPR 36.17(4) are prescriptive. The court must, unless it considers it unjust to do so, order that a claimant (in detailed assessment proceedings, the receiving party) receive all of the listed awards including indemnity basis costs and additional interest on those costs. That envisages a claim, or part of a claim or an issue in a claim, which is in itself capable of conferring an entitlement to costs. In short, it would be what is described at CPR 47.20(7) as an independent claim. The costs of detailed assessment proceedings do not carry their own costs and do not meet that criterion.
41. That takes me to what seems to me to be a decisive obstacle for the interpretation of the rules contended for by the Claimant. If the Claimant is right then any Part 36 offer made as to the costs of assessment would, on acceptance, result in a further deemed order for costs under CPR 44.9(1)(b). By virtue of Practice Direction 44 paragraph 8.2, that deemed order would be an authority for detailed assessment.
42. The receiving party would, accordingly, be entitled to draw up another bill to cover its costs of working on the costs of the detailed assessment, and to start a new set of proceedings for the detailed assessment of those costs. To avoid a Default Costs Certificate, the paying party would have to file Points of Dispute. The receiving party could then apply for detailed assessment and, pursuant to CPR 47.20, seek not only “the costs of the costs” claimed in its bill, but the additional costs of the new set of detailed assessment proceedings.
43. The receiving party could also make yet another Part 36 offer as to the costs of the new detailed assessment proceedings. If the paying party were to refuse to accept that offer, it would be at risk of incurring the additional penalties provided for by CPR 36.17. If it did accept the offer, then the receiving party could start again with another bill claiming “the costs of the costs of the costs”.
44. As Mr Clegg for the Defendant points out, there is at least the potential for an indefinite cycle of Part 36 offers and new detailed assessment proceedings, each parasitic upon the last. Even one such parasitic set of detailed assessment proceedings would be disproportionate, duplicative and unfair to the paying party. That is not consistent with the overriding objective.
45. In summary
my conclusion is that the costs of the detailed assessment proceedings do not, for the purposes of CPR 36.17(4), fall within “any issue that arises in the claim”. The Claimant’s submission that it does seems to me to be inconsistent with the way in which CPR 36 has been interpreted since well before 2013. It is also, in my view, inconsistent with the full provisions of CPR 36.17. To accept it would be to override my obligation to interpret the Civil procedure rules in accordance with the overriding objective.
RECENT BLOG POSTS
SIGN UP TO OUR NEWSLETTER FOR REGULAR UPDATES
By signing up you consent to receiving occasional emails about our latest news and services. Your information will be used in accordance with our privacy policy.
Author
Toby Moreton
