Failing to File and Serve a Costs Schedule in Time – Can a Party still Claim those Costs by Summary Assessment?

Summary

In this article, Jasraj Sanghera will examine the Practice Direction governing the filing and serving of costs schedules where summary assessment of costs is sought, the decision in Robert Macdonald -v- Taree Holdings Ltd [2001] 1 Costs LR 147, and the implications of failing to file and serve a costs schedule in time in light of that decision.

Introduction

Is a party entitled to claim costs, by summary assessment, where they have failed to file and serve a schedule of those costs in the time required by the relevant Practice Direction? This is the question that the appeal judge determined needed to be answered in a hearing that I recently shadowed a member of chambers in. The appeal judge found that the answer to that question lay in the case of Robert Macdonald -v- Taree Holdings Ltd [2001] 1 Costs LR 147.

Paragraph 9.5(4)(b) of Practice Direction 44

Paragraph 9.5(4)(b) of PD 44 governs the filing and serving of costs schedules, where a party is seeking summary assessment of its costs, before a hearing which isn’t a fast-track trial. It provides that “a statement of costs must be filed and served as soon as possible and, in any event, not less 24 hours before the time fixed for the hearing”.

Macdonald -v- Taree Holdings

The application of paragraph 9.5(4)(b) of PD 44 lay at the heart of the appeal in Macdonald -v- Taree Holdings. In those proceedings, a DDJ had refused to grant Mr MacDonald the costs of his successful application (to set aside a statutory demand). The DDJ made their decision on the basis that Mr MacDonald had not filed and served their schedule of costs within 24 hours of the hearing, in breach of the relevant Practice Direction. Mr MacDonald appealed the DDJ’s decision.

In the appeal, Neuberger J stated that the correct approach, where there is a failure to file and serve a schedule of costs in accordance with the relevant Practice Direction, is for the Court to take that failure into account but that its reaction should be proportionate. The Court should consider whether there was a ‘mere failure’ to comply, or whether there were additional aggravating factors, for example a history in the litigation of failing to file and serve in time. Where there is a ‘mere failure’ to file and serve in time, it would not be right to deprive a party of their costs altogether.

In Macdonald, on its own facts, Neuberger J found that there had been a mere failure to comply, that there were no aggravating factors and, therefore, that the DDJ was wrong to refuse Mr MacDonald the costs of his successful application solely on the basis of failing to file and serve a schedule in time.

Facts of the Present Case

The appeal which I shadowed a member of chambers in, was brought by the Defendant after a Deputy District Judge had made ‘No Order as to Costs’ following the hearing of the Defendant’s application for specific disclosure. In that application for specific disclosure, the Defendant had sought disclosure of three documents, along with an ‘Unless Order’. Prior to the hearing of the application, the Defendant filed two costs schedules. Both were filed in breach of paragraph 9.5(4)(b) of PD 44. The Defendant filed their first schedule seven minutes late, and then filed a second schedule some two and a half hours later (with a correction to the signature on the schedule).

At the hearing of the application for specific disclosure, the Defendant was successful in obtaining an Order for disclosure of two of the documents but failed on the other and did not obtain the Unless Order. The Defendant then sought summary assessment of its costs, but the DDJ proceeded to make ‘No Order as to Costs’. The judgment simply stated that this was “due to breach of the relevant law”. No further reasons were recorded, nor did the Defendant ask for them.

The Defendant then appealed the DDJ’s decision to make ‘No Order as to Costs’ on the basis that the DDJ had erred in law by making that decision solely on the basis of the Defendant’s failure to provide its costs schedule in time.

The Decision on Appeal

In the appeal, the judge determined that the question to be answered was “is a party entitled to claim costs, by way of summary assessment, where they have failed to file and serve a schedule of those costs in the time required by the relevant Practice Direction?”

The Claimant submitted that that wasn’t necessarily the question to be answered as the DDJ had not provided the Defendant’s failure to file their schedule in time as a, or the, reason for their decision to make No Order as to Costs. The DDJ had simply stated that there had been “breach of the relevant law”.

The appeal judge dismissed this submission finding that a breach of the relevant law could only refer to non-compliance with paragraph 9.5(4)(b) of PD 44. Subsequently, the judge found that the answer to the question at the heart of the appeal lay in the case of Robert Macdonald -v- Taree Holdings Ltd [2001] 1 Costs LR 147.

The Result

In this appeal, the judge was satisfied that the DDJ’s reference to “breach of the relevant law” was reference to the Defendant’s failure to file and serve their costs schedule in accordance with paragraph 9.5(4)(b) of PD 44. In the absence of any other reasons, the appeal judge found this to be a ‘mere failure to comply’, as Neuberger J had in Macdonald. Consequently, the appeal judge found that the DDJ was wrong to make No Order as to Costs, solely on the basis of the Defendant’s failure to file and serve their schedule in accordance with the relevant Practice Direction. The judge allowed the appeal and proceeded to summarily assess both the Defendant’s costs of the initial hearing and the appeal.

The decision in Macdonald, therefore, is authority for the proposition that the failure to file and serve a costs schedule in time, on its own and without other aggravating factors, is not a bar to claiming those costs by way of summary assessment. A party is still able to claim its costs, by summary assessment, where they have failed to file and serve their schedule in the time required by the relevant Practice Direction. But any such failure, and the extent of it, is likely to be taken into account when determining the amount to be awarded.

The Civil team at Becket Chambers can provide advice and representation in a wide range of issues concerning costs. If you require any advice or assistance, then please do not hesitate to contact our clerks on clerks@becket-chambers.co.uk or 01227 786331.