Brake & Anor v Guy & Ors (Costs) [2022] EWHC 2907 (Ch)

Charlotte Pope-Williams for the Third Party

HHJ Paul Matthews :

Introduction

• On 4 November 2022 I handed down judgment on an application by the defendants (“the Guy Parties”) by notice dated 12 September 2022, for an order under regulation 7(2)(b) of the Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 (“the 2020 Regulations”): see [2022] EWHC 2797 (Ch).

• In essence I decided that the application succeeded, and that the parties should comply with an earlier order which I made on 20 July 2022 in relation to a third-party debt order (“TPDO”), notwithstanding the entry of the first claimant into a mental health crisis moratorium under the 2020 Regulations in late August or early September 2022. Any reader requiring to know more of the background to this procedurally complex litigation should refer to my judgment, at [2]-[12].

• The present judgment is concerned with the costs of the application of 12 September. I directed that written submissions on consequential matters be filed and served in the first instance by 8 November 2022, and reply submissions by 10 October 2022. Both the Guy Parties and the claimants (“the Brakes”) filed and served two sets of submissions. The third party took no substantive part in the application and has made no submissions in relation to its costs. Nor is any order sought against it.

• As I have said, the application was successful, and the applicant Guy Parties have asked for an order that the claimants (“the Brakes”) pay their costs of that application. The Guy Parties also served a statement of costs dated 8 November 2022, showing a total of £9,551.98 (no VAT). They seek a summary assessment of the costs, but limited to £6,500. The Brakes do not resist a costs order in principle, but they submit that the costs should be subject to detailed rather than summary assessment, and they also challenge the amount of the costs claimed, as excessive.

Mode of assessment

• The first question is therefore whether I should order a detailed assessment, or whether I should assess them summarily. CPR PD 44 paragraph 9 relevantly provides:

“9.2. The general rule is that the court should make a summary assessment of the costs –

[ … ]

(b) at the conclusion of any other hearing, which has lasted not more than one day, in which case the order will deal with the costs of the application or matter to which the hearing related. If this hearing disposes of the claim, the order may deal with the costs of the whole claim,

unless there is good reason not to do so, for example where the paying party shows substantial grounds for disputing the sum claimed for costs that cannot be dealt with summarily”.

[ … ]

9.5(4). The statement of costs must be filed at court and copies of it must be served on any party against whom an order for payment of those costs is intended to be sought as soon as possible and in any event –

[ … ]

(b) for all other hearings, not less than 24 hours before the time fixed for the hearing.”

• The Brakes submit that I should not summarily assess the costs because the Guy Parties did not file or serve their statement of costs in accordance with paragraph 9.5(4), ie 24 hours before the hearing. They also rely on the decision of the Court of Appeal in Tomlinson v Radiocom Systems Ltd [2011] EWCA Civ 1832, where the court held that the judge had been wrong summarily to assess the costs in a case where the paying party was a litigant in person.

• The Guy Parties submit that paragraph 9.5(4) applies only where there is actually a hearing, and not to matters which are dealt with on paper. In any event, they say that the Brakes, having received the statement of costs on 8 November 2022, had until 10 November 2022 (approximately 48 hours) to comment on it, so that they have not been prejudiced by any failure to comply with that paragraph. They also seek to distinguish the decision in Tomlinson v Radiocom Systems Ltd, saying that it is “nothing like this case”.

Late filing and service of statement of costs

• So far as concerns the first point, it has become relatively common, since the coronavirus pandemic, for costs and other consequential applications to be dealt with on paper. As a general proposition, the courts have for procedural purposes usually sought to equate dealing with the matter on paper with a hearing in the conventional sense.

• But, of course, there will be procedural rules that which do not lend themselves to this process. Paragraph 9.2(b), dealing with the general rule as to when there should be a summary assessment, is an example of this. Dealing with a matter on paper cannot be regarded as a hearing that has a particular length. In the context of paragraph 9.5(4)(b), however, it seems to me that the judge cannot begin consideration of the paper application until he has received the written submissions on both sides, time-limited for lodging such submissions has expired. It is only then that the “hearing” can begin.

• In the present case, therefore, lodging the statement of costs some 48 hours before the reply submissions of the paying party are due amounts to compliance with that paragraph. Even if it did not, it is not uncommon for the court to proceed to a summary assessment even where less than 24 hours’ notice of the statement of costs has been given. The court has a discretion, which it exercises on a fact sensitive basis.

Continue reading this Judgment here.