Crosbie v Munroe and another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Brooke,Lord Justice Jonathan Parker,Lord Justice Schiemann |
| Judgment Date | 14 March 2003 |
| Neutral Citation | [2003] EWCA Civ 350 |
| Docket Number | Case No: B2/2002/1461 CCRTF |
| Court | Court of Appeal (Civil Division) |
| Date | 14 March 2003 |
[2003] EWCA Civ 350
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LIVERPOOL COUNTY COURT
Judge Mackay
Deputy District Judge McNamara
Lord Justice Schiemann
Lord Justice Brooke and
Lord Justice Jonathan Parker
Case No: B2/2002/1461 CCRTF
Benjamin Williams (instructed by Irvings) for the Appellant
James McKeon (instructed by Weightmans) for the Respondents
This is an appeal by the claimant against an order made by Judge Mackay in the Liverpool County Court on 28 th June 2002 whereby he dismissed his appeal against an order made by Deputy District Judge McNamara on 8 th March 2002. The appeal raises a point of general interest which relates to the incidence of costs in costs-only proceedings following the acceptance of an offer to settle the costs claimed in assessment proceedings.
The facts of the matter are very straightforward. In July 2000 the parties were involved in a road traffic accident. The claimant's claim was settled, without the need for proceedings, for a little over £1,500 on 8 th January 2001. On 25 th January 2001 his solicitors served a bill of costs in the sum of £4,089.25. Since agreement was not forthcoming they commenced costs-only proceedings (see CPR 44.12A) by a Part 8 claim on 4 th July 2001, claiming costs of £5,310.84. On 16 th January 2002 the defendants' solicitors made an offer under CPR 47.19 in these terms:
"… [W]e would be willing to offer you the all-inclusive sum of £2,650 in respect of your profit costs, disbursements, VAT and interest (your entitlement to which is not admitted) in order to seek an amicable conclusion. Our offer is pursuant to CPR Part 47.19 and remains open for 21 days from the date of this letter."
CPR Part 47 contains the procedure for the detailed assessment of costs. Section I ( CPR 47.1 to 47.4) contains general rules about detailed assessment, and Section II ( CPR 47.1 to 47.10) deals with the commencement of detailed assessment proceedings where costs are payable by one party to another. Section III ( CPR 47.11 to 47.12) then contains default provisions, and Section IV ( CPR 47.13 to 47.14) contains the procedure when points of dispute are served. Section V ( CPR 47.15 to 47.16) makes provision for interim costs certificates and final costs certificates, and Section VI ( CPR 47.17 – 47A) prescribes the procedure where costs are payable out of the Community Legal Service fund. Section VII ( CPR 47.18 – 47.19) is concerned with the costs of detailed assessment proceedings. CPR 47.18 contains the general rule that the receiving party is entitled to his costs of the detailed assessment proceedings except in the circumstances identified in CPR 47.18( 1). CPR 47.19, for its part, is headed "Offers to settle without prejudice save as to costs of the detailed assessment proceedings". It provides, so far as is material, that:
"(1) Where
(a) a party … makes a written offer to settle the costs of the proceedings which gave rise to the assessment proceedings; and
(b) the offer is expressed to be without prejudice save as to the costs of the detailed assessment proceedings,
the court will take the offer into account in deciding who should pay the costs of those proceedings.
(2) The fact of the offer must not be communicated to the costs officer until the question of costs of the detailed assessment proceedings falls to be decided."
Section 46 of the Costs Practice Direction ("CPD") now contains guidance on practice in relation to CPR 47.19. The same text was previously contained in Section 7.6 of the practice direction as originally drafted. Paragraph 46.2 provides:
"Where an offer to settle is made it should specify whether or not it is intended to be inclusive of the cost of the preparation of the bill, interest and value added tax … The offer may include or exclude some or all of these items but the position must be made clear on the face of the offer so that the offeree is clear about the terms of the offer when it is being considered. Unless the offer states otherwise, the offer will be treated as being inclusive of all these items."
On 5 th February 2002 an order was made in the Part 8 proceedings for detailed assessment, and on 6 th February 2002 the claimant's solicitors wrote:
"Having reviewed the file we accept your Part 47.19 offer of £2,650.
The only outstanding issue is the costs of the Part 8 proceedings details of which we will let you have shortly."
The following day they wrote a further letter in which they said that without prejudice to summary assessment they would be prepared to agree the costs of the Part 8 proceedings at £1,022.64. After giving a breakdown of this sum they said:
"Please let us have your proposals within the course of the next fourteen days failing which we will apply on notice for summary assessment of the Part 8 costs."
The defendants' solicitors replied on 13 th February in a letter headed "Without Prejudice save as to the costs of a summary or detailed assessment of Part 8 costs". They made a counter-offer for the Part 8 costs pursuant to CPR 47.19, which was not accepted. The matter then came before Deputy District Judge McNamara on 8 th March 2002.
The issue she was invited to determine was whether the CPR 47.19 offer which was made on 16 th January 2002 included the costs of the costs-only proceedings. She held that the correspondence indicated a conclusive, final and total offer to settle the matter and she therefore disallowed any costs of the detailed assessment proceedings.
On the appeal to Judge Mackay counsel for the claimant took three points. First, that there was an agreement that the costs of the detailed assessment proceedings and the Part 8 costs should be treated separately, and the parties conducted themselves on that basis. Secondly, that the hearing before the deputy district judge was predicated on the basis that they were there to assess the costs, not on the basis that they might be withheld entirely. And thirdly, that there was no proper compromise because the claimant's solicitors and the defendant's solicitors were thinking of different things.
Counsel for the defendant, for his part, argued that on the proper construction of CPR 47.19 the expression "the proceedings which gave rise to the assessment proceedings" could only refer to the costs-only proceedings, since there were no other proceedings in this case. His solicitor's letter plainly indicated that what was being offered was an all-inclusive sum. The claimant's solicitor accepted this offer, and then went on to ask for something else.
After setting out the rival arguments, and reminding himself that the appeal hearing was a review and not a rehearing, Judge Mackay concluded that the deputy district judge was probably right in finding that there was an all-inclusive offer, which encompassed all the costs in the matter. He was quite satisfied that the letter of 16 th January 2002 could, and perhaps should, be read in the way the deputy district judge read it.
Before I describe a particular inconsistency which has arisen recently in the Liverpool County Court, I will say something about the history of the rule we have to interpret. It was a novelty when it was first introduced in April 1999 when the Civil Procedure Rules came into effect. Practitioners were of course familiar with the arrangements for a payment into court or the writing of a Calderbank letter "without prejudice save as to costs" when offers were made to settle a substantive claim, and it has always been a feature of those regimes that a claimant will be entitled, for instance, to his costs of the proceedings up to the time he timeously accepts a payment into court, or that if he does not accept a payment into court which turns out to be greater than the sum awarded to him at trial, he will be liable for the defendant's costs from the last date on which the payment into court could have been accepted. Needless to say, the amount of those costs, in either event, will have to be assessed by the court, if they cannot be agreed.
In those contexts the defendant is placing a value on a claim which should have been set out clearly in the claimant's statement of case. In so far as the claimant is claiming money, he should have set out the amount he is claiming, and in so far as he is claiming general damages he should have set out the basis of the claim. The defendant can then value the claim. CPR 36.18(1) then provides that the claimant is entitled to the costs of the proceedings up to the date of serving notice of acceptance, and CPR 36.20(2) provides that the court will ordinarily order him to pay any costs incurred by the defendant after the latest date on which the payment could have been accepted where he has failed to better a Part 36 payment.
I mention this procedure because it provides expressly as to who should bear the (as yet unquantified) costs in different eventualities. CPR 47.19 (for which see para 3 above) contains no such simple scheme. When it was originally introduced in April 1999, "costs-only proceedings" under CPR 44.12A had not yet been invented. At that time there should have been no difficulty about the interpretation of the rule. Conventional legal proceedings had given rise to the assessment proceedings as a consequence of an order being made in those proceedings for the costs to be assessed. A copy of the receiving party's bill of costs would have been served when the...
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