Crosbie v Munroe & Anor

In costs-only proceedings, an offer under rule 47.19 to settle the costs of the proceedings giving rise to the assessment concerns the costs of resolving the substantive claim, even where that claim was settled without issued proceedings. The subsequent negotiations about the amount of costs, the Part 8 proceedings required to obtain an assessment order, and the detailed assessment form one assessment process. An offer does not therefore include the costs of the Part 8 proceedings merely because it is expressed to be all-inclusive. Those costs remain subject to the court’s discretion under rule 47.18(2), having regard to all the circumstances, including the parties’ conduct.

The claimant’s road traffic claim was settled before proceedings were issued. His solicitors subsequently began costs-only proceedings under rule 44.12A and accepted the defendants’ rule 47.19 offer of £2,650 for profit costs, disbursements, VAT and interest. A dispute arose over whether that offer also included the costs of the Part 8 proceedings.

Deputy District Judge McNamara held that the offer was a final, all-inclusive settlement and disallowed the assessment costs. Judge Mackay dismissed the claimant’s appeal. The claimant appealed to the Court of Appeal.

The central issue was whether, in costs-only proceedings, “the costs of the proceedings which gave rise to the assessment proceedings” included the costs of the Part 8 proceedings needed to obtain an order for detailed assessment.

1. Appeal allowed unanimously. Lord Justice Brooke delivered the judgment, with which Lord Justice Jonathan Parker and Lord Justice Schiemann agreed. The orders of Judge Mackay and Deputy District Judge McNamara were set aside.

2. The word “proceedings” in rule 47.19 required a broad and practical construction. Where a substantive dispute is settled without a claim form, the dealings which lead to settlement constitute the proceedings giving rise to the assessment. The associated costs are the subject matter valued by a rule 47.19 offer.

3. After settlement of the substantive claim, the parties’ negotiations concerning the amount of recoverable costs form part of the assessment process. That process includes any Part 8 costs-only proceedings required under rule 44.12A to obtain an order for detailed assessment and continues until final disposal by agreement or court order. The Part 8 proceedings are therefore not part of the substantive proceedings whose costs are valued by the rule 47.19 offer.

4. This construction preserved the distinction between substantive proceedings and assessment proceedings. It also accorded with the comparable approach in Callery v Gray (No 1) [2001] EWCA 1117, where statutory language was construed to accommodate claims settled before proceedings were issued.

5. Rule 47.19 does not itself prescribe the costs consequences of accepting or refusing an offer. Under rule 47.18(2), the court must consider all the circumstances, including conduct. If a receiving party ought to have accepted an offer made before the Part 8 claim, the paying party may receive the costs incurred thereafter, including the Part 8 costs.

6. The second defendant was ordered to pay the claimant’s costs of the assessment proceedings and both appeals, on the standard basis if not agreed, together with £10,000 on account.

Lord Justice Brooke added, without having heard argument, that “proceedings” in paragraph 4A.2 of the Practice Direction: Protocols appeared to require the same broad construction.

1. Court of Appeal (Civil Division): The claimant’s appeal was allowed unanimously. The orders below were set aside, and the second defendant was ordered to pay the claimant’s assessment and appeal costs.
2. Liverpool County Court, Judge Mackay: On 28 June 2002 the judge dismissed the claimant’s appeal, concluding that the deputy district judge was entitled to construe the offer as encompassing all costs.
3. Liverpool County Court, Deputy District Judge McNamara: On 8 March 2002 the judge held that the correspondence constituted a conclusive and total settlement and disallowed the costs of the detailed assessment proceedings.