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That’s fascinating!: Can the commencement of proceedings for assessment of costs become statute barred under the Limitation Act 1980?

In the second in our new series of “That’s fascinating!” blog posts, Practical Law’s newest Dispute Resolution team member, Ariane Tadayyon, queries whether the commencement of proceedings for assessment of costs can become statute barred under the Limitation Act 1980.

So, can section 24(1) apply to the commencement of detailed assessment proceedings?

Case law on the point suggests that there is no time limit by which detailed assessment proceedings must be commenced, unless there is exceptional delay.

Section 24(1) provides that:

“An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable”.

In Times Newspapers Ltd v Chohan it was held that the limitation period for a costs order starts to run when the order becomes enforceable by action. Aldous J noted that section 24 prohibits an action being brought on a judgment after six years from the date when the judgment became enforceable. The word “enforceable” has to mean “enforceable in a practical way according to law”, and there was nothing to enforce until the amount of costs had been certified.

CPR 47.7 states that the time by which detailed assessment proceedings must be commenced following a judgment is three months after the date of that judgment. If the receiving party commences detailed assessment after this date, the court may disallow all or part of the interest otherwise payable to them pursuant to CPR 47.8(3). In Briggs and others v First Choice Holidays and Flights Ltd, the claimants’ notice of commencement was dated five days after the three month period for commencing detailed assessment under CPR 47.7, a minimal delay which the court did not think merited any sanction.

CPR 47.14 states that where points of dispute are served, the receiving party must file a request for a hearing within three months after the expiry of the period for commencing detailed assessment proceedings. If this is not done, the paying party may apply for an order requiring the receiving party to file the request within such time as the court may specify or if no such application is made, the court may disallow the receiving party interest.

In Less and others v Benedict, the High Court rejected the argument that the receiving party’s delay of three years in requesting a hearing date for assessment following the service of a (disputed) notice of commencement constituted a breach of the paying parties’ Article 6 European Convention on Human Rights (ECHR) right to a hearing within a reasonable time.

By contrast, in Weston v Weston, the Court of Appeal exceptionally reversed the decision to allow an assessment of costs where the underlying proceedings started in 1963 and orders for the assessment of the parties’ costs were made in 1984. The defendant did not lodge its bill of costs until 2002, which triggered the claimant into applying for an order that, due to unnecessary delay, no party be entitled to lodge a bill for taxation (as it then was).

If the delay is so extreme as to prejudice a party, the court also has the power, pursuant to CPR 44.11, in an assessment context, to disallow costs on the grounds of misconduct, but it seems that the jurisdiction is rarely exercised. In Haji-Ioannou v Frangos, Longmore LJ suggested that an inordinate and excusable delay that prejudiced the paying party might fall within the category of misconduct. However, as stated at paragraph 10 of the judgment, “excusable, although inordinate delay may not, especially if it has caused no prejudice”.

It seems that although there is no time limit by which detailed assessment proceedings should be commenced or heard, this is subject to the individual judge’s discretion based on the facts of the case. In Weston the Court of Appeal sensibly decided that taking 18 years to lodge a bill of costs constituted an exceptional delay which it would not entertain. Permitting detailed assessment proceedings after such a delay would indeed have been fascinating!

We would be interested to hear of your experiences!

Practical Law Dispute Resolution Ariane Tadayyon

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