Detailed Assessment Overview

Detailed assessment is the procedure by which the court determines the amount of costs payable by one party, i.e. the paying party (who is generally the losing party), to the other party, i.e. the receiving party (who is generally the winning party). The fact that the receiving party has incurred £100,000 (for example) on the proceedings does not mean that he/she is going to receive all of it back from the paying party. In fact, it rarely happens.

Following the costs order, the parties can try to negotiate or agree on the costs payable to the receiving party. Where agreement is reached between them, either party may make an application for a costs certificate in the amount agreed; where no agreement is reached between them, the receiving party must file a request for a detailed assessment hearing with the court. The court will then fix a date for the hearing. If it is not done, the paying party can make an application to the court for an order requiring the receiving party to receive the request within such time as specified by the court.

Our previous blog here discusses costs and case management conferences and the purpose of costs budgets, which set out a parties’ incurred and estimated (future) costs. How does costs budgeting relate to a detailed assessment? During the costs assessment hearing, the court will consider the receiving party’s last approved/agreed budgeted costs for each phase of the proceedings and will not depart from this unless there is a good reason to do so. There are no specific rules as to what constitutes a good reason. Costs being awarded on the indemnity basis is likely to be a good reason for the court to disregard the last approved/agreed costs budget because proportionality is not relevant.

The Hearing

The court will hear evidence and oral arguments from both parties. It will normally give a decision orally, thereby making note on the Bill of Costs to indicate any disallowance/reduction in the sums claimed by the receiving party. It will also deal with the award of costs of the detailed assessment proceedings themselves. The receiving party is generally entitled to the costs of the detailed assessment proceedings.

Where offers are made which are marked ‘without-prejudice save as to costs’ or pursuant to the Civil Procedure Rules Part 36, those offers must be contained in a sealed envelope marked ‘Part 36 or similar offers’ but should not indicate which party/parties made them. The court will then take the offer(s) into consideration when deciding who should pay the costs of the detailed assessment proceedings.