Agreeing costs “subject to detailed assessment” may result in escaping Fixed Recoverable Costs – carefully consider the wording of terms of settlement reached

 

In the case of Allan John Doyle -v- M&D Foundations & Building Services Limited [2022] EWCA Civ 927 Lord Justice Phillips considered the wording of the parties agreed consent order in which the Claimants damages were agreed in the sum of £5,000.00 on the basis that the Respondent would pay the Claimants costs “such costs to be subject to detailed assessment if not agreed”.

 

In this particular case, matters started out in the MOJ portal. Upon the claim exiting the portal due to the Respondents failure to respond to the Claimants CNF form, Part 7 proceedings were issued, and the claim allocated to the fast track. Damages were agreed in the sum of £5,000.00.

 

Standard basis costs were claimed by the Claimant which were assessed in the sum of £14,467.00. The Defendant appealed the same arguing that fixed recoverable costs were payable on the basis that the claim had been started in the portal.

 

In the Court of Appeal, the Defendant argued that the use of the term “subject to detailed assessment” in the agreed order did not necessarily mean that that costs were to be assessed on the standard basis. It was contended by the Defendant that the term “detailed assessment” referred to the process of assessing the amount of fixed costs and in particular the level of disbursements claimed. This was contested by the Claimant.

 

On appeal, the Judges ruled unanimously against the Defendant with Lord Justice Phillips saying that “detailed assessment” was a technical term with a meaning and effect clearly set out in the rules and that it “plainly denotes that the costs are to be assessed by the procedure in CPR Part 47 on the standard basis”.

 

Lord Justice Phillips went onto say that “The phrase “detailed assessment” cannot be read as providing for an “assessment” of fixed costs pursuant to the provisions of Part 45 unless the context leads to the conclusion that the wrong terminology had been used (by the parties or the Court)”.

 

This judgement underlines the importance of parties taking considerable care when reaching agreement as to costs in cases in which the fixed costs regime applies.

 

Paul Tidman – paul.tidman@rcostings.co.uk

Senior Costs Draftsman

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