Costs Judge Rules on Detailed Assessment Proceedings Costs in Tanka Thakali & Ors v Navin Kumar Gauchan & Anor [2023] EWHC 3032 (SCCO)

Introduction

The case of Tanka Thakali & Ors v Navin Kumar Gauchan & Anor [2023] EWHC 3032 (SCCO) concerns the costs aspect of litigation, focusing on the detailed assessment of a bill of costs and the subsequent costs of the detailed assessment proceedings themselves. Costs Judge Rowley presided over the matter, delivering a written judgment addressing the disputes over the bill of costs, the parties’ conduct, and the reasonable and appropriate costs to be awarded.

Key Facts

The bill of costs initially claimed £105,133.49 and was reduced to £88,409.44 after detailed assessment proceedings that spanned two days and required written decisions. The defendants challenged certain aspects, resulting in an adjourned hearing to tackle retained issues that could not be sufficiently addressed. A substantial electronic bundle of over 3,000 pages was provided by the claimants post-adjournment. Both parties made written submissions concerning the costs of the detailed assessment proceedings. Judge Rowley made clear that the standard position under CPR rule 47.20 is that the receiving party (the claimants in this instance) is presumed to be awarded the costs of detailed assessment proceedings unless the court orders otherwise.

Legal Principles

Detailed Assessment Proceedings Costs:

Under CPR rule 47.20, the default position is that the receiving party is awarded the costs of detailed assessment proceedings. In practice, however, the court has discretion to alter this position considering the conduct of parties, any reduction made to the bill of costs, and the reasonableness of claiming or disputing certain costs. This includes considering settlement offers made by both parties within the context of those proceedings.

Offers to Settle:

Offers made to settle proceedings are regarded as part of the behavior of the parties. The judgment specifically mentions the claimants beating their own settlement offers – which also surpass the defendants’ offers – an element that could have influenced the costs order decision in favor of the claimants.

Proportionality and Necessity:

The court emphasizes the assessment of costs on the basis of their proportionality and necessity. Categories of costs are scrutinized, including communications, attendance at hearings, documents preparation, counsel’s fees, disbursements, and VAT.

Standard vs. Indemnity Basis:

The judgment elucidates on the difference between costs being awarded on the standard basis versus the indemnity basis. To justify the latter, the conduct of the paying party must be out of the norm. In this case, the rejection of offers by the defendants was not considered out of the norm, and the indemnity basis was not applied.

Outcomes

Costs Judge Rowley awarded the claimants their costs of detailed assessment proceedings on the standard basis, excluding the costs of the first adjourned hearing due to the claimants’ unpreparedness to address the retainer issues at that time. The judge found that the defendants should not pay attendance costs for the first hearing. The judgment also made reductions to various elements of the claimants’ costs, including time claimed for document preparation, counsel’s fees, and VAT. The final sum awarded was £21,339.08. No specific order was made regarding interest, as statutory entitlement applies, subject to potential offsetting by the defendants.

Conclusion

In Tanka Thakali & Ors v Navin Kumar Gauchan & Anor, the court demonstrated the application of rules concerning the costs of detailed assessment proceedings, with a focus on proportionality, reasonableness, and parties’ conduct. Despite a presumption in favor of the receiving party for costs, conduct and failure to satisfactorily address issues led to adjustments and disallowance of certain claimed costs. The outcome serves as a cautionary tale for parties to ensure preparation for hearings and that settlements offers should be made judiciously considering the potential impact on cost awards.