UK Sovereign Investments Ltd v Elias Hussain

Where a bill proceeds to detailed assessment, the receiving party is ordinarily entitled to the costs of that assessment under Civil Procedure Rules 1998, rule 47.20. The provisional-assessment cap does not automatically apply merely because the bill was initially above £75,000 but the parties later settled below that figure. A court should not infer exaggeration or unreasonable conduct from the settlement sum alone where the bill has not been assessed and the reasons for settlement are unknown. A realistic Part 36 offer may be relevant to the exercise of the court’s discretion. The costs of assessment remain subject to detailed scrutiny for reasonableness and proportionality.

The claimant had recovered £103,816.82 in a substantive claim and later served a bill of costs for £83,425.18. Before detailed assessment, the parties settled the substantive costs at £59,000 including interest. They agreed that only liability for the costs of assessment should be determined on the papers.

The defendant argued that the bill had been exaggerated and that, applying the provisional-assessment regime under Civil Procedure Rules 1998, rule 47.15, liability should be capped at £1,500 plus VAT and the court fee. The claimant relied on the default rule for detailed-assessment costs under rule 47.20 and disputed any finding of exaggeration or unreasonable conduct.

1. Default liability for assessment costs. Under Civil Procedure Rules 1998, rule 47.20(1), the receiving party is entitled to the costs of detailed assessment unless the rules, a practice direction or the court’s order provides otherwise. Any departure requires consideration of the circumstances identified in rule 47.20(3), including conduct, reduction of the bill and the reasonableness of claiming or disputing items.
2. No finding of exaggeration from settlement alone. The court could not determine, without assessing the bill after full argument, that it had been exaggerated or that the claimant’s conduct had been unreasonable. The difference between the sum claimed and the settlement figure did not create an irrebuttable inference of exaggeration. Settlement might reflect risk, the desire for finality, accelerated payment or the prospect that disputed points would succeed.
3. Provisional assessment regime. Rule 47.15 is self-contained and did not provide that a bill initially exceeding £75,000, but later settled below that figure, must attract only provisional-assessment costs. The rule-makers could have enacted such a consequence but had not done so. The defendant therefore could not obtain the provisional-assessment cap through rule 47.20.
4. Part 36 conduct. The claimant’s acceptance of a sum close to its Part 36 offer favoured the claimant. The defendant could have made a realistic early Part 36 offer capable of producing the costs consequence now sought. The application was therefore, in substance, an attempt to obtain a second opportunity to achieve that result.
5. Amount allowed. The claimed assessment costs were strikingly high. The court reduced the hourly rate and the time allowed for documents and other work. It allowed £9,000 plus VAT of £1,800 and the £1,656 court fee, totalling £12,456, with interest from 14 April 2022.