Reem Zuhri v Vardags Limited

Part 36 does not automatically apply to an assessment of a solicitor’s bill under section 70 of the Solicitors Act 1974. Such an assessment is governed by its specific statutory and procedural regime, including the one-fifth costs rule and the court’s discretion in special circumstances. CPR 47.20, which applies Part 36 to detailed assessments between parties, does not extend that regime to solicitor-client assessments under CPR 46.9 and 46.10. A Part 36 offer may nevertheless be relevant to whether special circumstances exist under section 70(10). The Civil Procedure Rules, as secondary legislation, cannot override or supersede inconsistent primary legislation.

The claimant sought assessment of bills rendered by the defendant solicitors under section 70 of the Solicitors Act 1974. The assessment proceeded in the claimant’s absence and the bills were reduced by only 1.4 per cent. The defendant obtained the costs of the assessment.

The defendant had made a Part 36 offer before the assessment and sought the automatic consequences of Part 36 on the basis that the offer had been bettered. The issue was whether Part 36 applied to a solicitor-client assessment, or whether the offer could otherwise constitute special circumstances justifying departure from the statutory costs rule.

1. The defendant’s Part 36 offer could not have the automatic consequences sought. CPR 47.20 applies Part 36 to detailed assessments conducted under CPR 47, but an assessment under section 70 of the Solicitors Act 1974 is not a detailed assessment within CPR 44.1 and CPR 47.20 has no application to it: John Poyser & Co Ltd v Spencer [2022] EWHC 1678 (QB).

2. The reference in CPR 44.1(2) to costs payable by a client to a legal representative identifies a category of costs to which some provisions may apply. It does not make every provision in Parts 44 to 47 applicable to every costs regime. CPR 46.9, CPR 46.10 and Practice Direction 46 provide the specific solicitor-client regime.

3. The one-fifth rule in section 70(9) is inconsistent with the automatic operation of Part 36. Section 70(10) permits the court, where special circumstances exist, to make such order as it thinks fit concerning assessment costs. A Part 36 offer, or a Calderbank offer, may be capable of amounting to such a special circumstance, but that does not import the automatic consequences of Part 36.

4. The court rejected the submission that Part 36 applies despite conflict with primary legislation. Orton v Collins [2007] EWHC 803 (Ch) concerned the enforcement of a settlement made through Part 36 and did not establish that Part 36 could negate or supersede statutory formal requirements. C v D [2011] EWCA Civ 646 concerned construction of an intended Part 36 offer and did not support applying Part 36 where the statutory scheme made it inapplicable.

5. The application of Part 36 was refused. The defendant had already obtained the costs of the assessment under section 70(9), and the court made no further order. It was left open that the defendant might seek to rely on the offer in the separate Part 7 proceedings.