Failure to Serve Statement of Costs

MacDonald v Taree Holdings Ltd (TLR 28 December Ch D)

Paragraph 13.5 section 13 of the Costs Practice Direction supplementing CPR rule 44.7 provides that each party who intends to claim costs must prepare a written statement of the costs he intends to claim and that the statement of costs must be filed at court and copies of it must be served on any party against whom an order of the payment of those costs is intended to be sought as soon as possible and in any event not less than 24 hours before the date fixed for the hearing. Paragraph 13.6 provides the failure by a party, without reasonable excuse, to comply with the foregoing paragraph will be taken into account by the court in deciding what order to take about the costs of the claim, hearing or application, and about the costs of any further hearing or detailed assessment hearing that may be necessary as a result of that failure. Despite the use of the word ‘must’ the provision is not mandatory and the deputy district judge had been wrong to refuse the successful party’s application for summary assessment of his costs on the grounds that he had not served a statement of costs upon the respondent 24 hours in advance. The court has a wide discretion when deciding whether or not to award costs under Part 44 and in applications for summary judgment for costs the failure to serve a schedule of costs was often being used for grounds for depriving a party of his costs or for curtailing a party’s costs. Where, however, the only factor against awarding costs was merely a failure to serve a schedule without aggravating factors a party should not be deprived of all his costs. The court should take the matter into account but its reaction should be proportionate. The question the court should ask itself was what, if any, prejudice had there been to the paying party and how should that prejudice be dealt with. The court should consider: