Acceptance of Part 36 offer after end of relevant period (CPR 36.13(4)) – right to detailed assessment

Where a Part 36 offer is accepted after the end of the ‘relevant period’ the liability for costs must be determined by the court unless the parties have agreed the costs[. The effect of this is that the parties must agree a consent order dealing with costs or the court will need to make an order. Conversely where a case settles within the relevant period a deemed costs order arises (CPR 44.9(1)(b)).

It is the cost order, whether made by court, by consent or deemed, which gives rise to the right to detailed assessment (CPR 47.7). Therefore, when a claim settles after the expiry of the relevant period there is no automatic costs order on settlement and, unless the parties agree a consent order, the receiving party will need to apply for a cost order before commencing detailed assessment.

An interim bill can be a statute bill even though it only includes profit costs or disbursements, and not both

Richard Slade and Company Solicitors v Boodia and Boodia [2018] – EWHC Civ 2667

The Court of Appeal held that a solicitor’s invoice could be an interim statute bill for the relevant period, even though it did not contain disbursements incurred during that period. As a matter of practicality and policy, it was unsatisfactory for a solicitor to be unable to issue a statute bill until it had been invoiced for all disbursements incurred during the relevant period which left the solicitor dependent upon third parties, such as experts and counsel, to raise invoices.  

While a client needs sufficient information to determine whether to exercise the right to assess the bill, a bill containing profit costs only would not necessarily fail that test.

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Success fee – it is not necessary to undertake a risk assessment and/or charge success fee in line with prospects of success, but the solicitor must explain the calculation of success fee

Herbert v HH Law Limited [2019] EWCA Civ 527

The CFA contained a 100% success fee capped at 25% of damages. Post-settlement Ms Herbert challenged the CFA on the basis that the solicitor had not conducted a risk assessment. The Court of Appeal considered whether it is necessary to undertake a risk assessment and charge a success fee in line with the prospects of success.

The Court of Appeal found that, as a success fee is traditionally calculated by reference to risk, if a solicitor charges a success fee on a different basis, the solicitor must (1) explain why the success fee is calculated in that (different) way and (2) be clear that risk plays no part in the calculation. (3) The solicitor must tell the client that the success fee is irrecoverable from the opponent and must be paid by the client. If a client has been told these things it will amount to informed consent.

An interim bill can be a statute bill even though it only includes profit costs or disbursements, and not both

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