A question I am asked a surprising amount of times by solicitor clients seeking to recover costs (often after threatening correspondence on the point from their opponents) is whether you are out of time to commence Detailed Assessment proceedings once 3 months have passed from the date of the order as to costs.
The answer is a simple “no”. There is (subject as always to some caveats), absolutely no limit on the time within which a receiving party can commence Detailed Assessment proceedings.
Perhaps the most notable case on this point is Botham v Niazi [2004] EWHC 2602 (QB) (16 November 2004). The case is easy to remember both because of the identities of the participants and the very long period of time after the order as to costs that the Court allowed Detailed Assessment proceedings to be commenced. The costs in this case arise out of legendary English cricketer Ian Botham’s unsuccessful libel action (brought with teammate Allan Lamb) against fellow international cricketer (and now Prime Minister of Pakistan) Imran Khan. Botham sued over comments in a newspaper article, saying Khan had defamatorily accused him of that most heinous of cricketing crimes, interfering with or altering the state of the ball (“ball tampering” as it is known). However, the jury disagreed the remarks amounted to libel and Botham was left facing an adverse costs bill reported in the press as over £500,000.00, and described by them as “Cricket’s most expensive libel case” (it would seem Messrs Rooney and Vardy, through the agency of their feuding wives, are well on the way to substantially eclipsing this and reasserting football’s status as the most expensive sport in the land).
Somewhat incredibly given the sums involved and that costs orders were made in the receiving party’s favour on 31 July 1996, Detailed Assessment proceedings were not commenced until well over 7 years later in October 2003. The paying party issued an application to strike out the Assessment proceedings on the grounds of unreasonable delay. The application was unsuccessful, and the assessment proceedings were allowed to continue. It is a long Judgement which examines the fact specific history
of the matter but among the factors considered were that extensions had been granted (although the exact nature of them was disputed), negotiations of some sort were proceeding through large parts of the period of delay, and in my view most significantly the paying party had not availed themselves of their right under the rules to make an application for an “unless order” requiring the paying party to commence Detailed Assessment proceedings by a certain date. This dicta was followed in the more recent case of Haji-Ioannou v Frangos [2006] EWCA Civ 1663.
The position therefore is fairly clear. There is a procedure set out in CPR 47.8 which provides both a sanction for delay in commencing Assessment proceedings, the loss of entitlement to judgement interest for the period of delay at CPR47.8(3); and a mechanism by which a receiving party can ensure a Bill is served on them, by making an application for an unless order as permitted by CPR47.8(2).
If you come to Court seeking Detailed Assessment proceedings be struck out for delay (as in the two cases referred to above) you are effectively making an argument for the disallowance of all costs sought on the grounds of misconduct under CPR44.11, and there is a wealth of case law (Kiam II -v- MGN et al) which sets the bar for conduct amounting to misconduct pretty high in relation to costs penalties of any sort, let alone the disallowance of any entitlement to cost whatsoever.
The lesson to be learned for receiving parties therefore is always try and commence assessment proceedings within 3 months of the final order (you are not going to get anything like the 8% pa paid on judgement interest anywhere else in the current economic climate!) but if you don’t and are on the receiving end of threats about being struck out, don’t panic.
If you are a paying party then give one warning in open correspondence after the 3 month anniversary, and then make an application for an unless order requiring commencement of Assessment Proceedings per CPR47.8(2) thereafter. In my experience the circumstances in which your application will be denied are minimal, and you will also almost certainly recover the costs of that application.
What I cannot recommend under any circumstances is a delay of over 7 years, and this is borne out by an analysis of our cases over the last year which shows that at R Costings our time on Bills of Costs from date of instruction to conclusion is an average of 124.6 days where negotiated settlement is achieved.