Summary assessment - maximising costs

District Judge Chris Lethem with some tips on how to avoid losing costs on summary assessment

Do solicitors litigate to win or to get paid for winning? Many firms direct their attention to the action itself and give little or no thought to ensuring that their success is turned to their profit.

This is particularly true with those applications and trials that are the subject of summary assessment of costs.

Summary assessment of costs is dealt with in the Civil Procedure Rules 1998 (CPR) Costs Practice Direction (CPD) 13 and will generally arise at the conclusion of a fast-track trial, and at the end of any other hearing which has lasted less than a day.

In relation to a fast-track trial, the summary assessment will deal with the costs of the whole claim whereas assessment at the conclusion of other hearings will address the costs of the application unless the hearing disposes of the whole claim.

A summary assessment must be carried out unless there is good reason why it should not.

Not so brief to counsel

Often parties will be represented by counsel without a representative of the solicitors' firm present.

It follows that those with the least knowledge of the file will be called upon to object to, or justify the costs.

Because the duty is on the receiving party to defend the bill, they will lose a significant percentage of costs unless they are prepared.

If counsel cannot respond to a speculative objection that an item 'looks too high' then the costs will be cut to the amount that the paying party offers or that which can be justified.

Thus each brief to counsel must include a section devoted to costs so the advocate can respond and preserve the hard-earned costs of his instructing solicitor.


Counsel must be able to justify the proportionality of the bill.

Since the decision in Home Office v Lownds [2002] EWCA Civ 365; [2002] 1 WLR 2450, the starting point will be whether the bill looks disproportionate.

If it is, then the receiving party will only receive payment for work that is necessary and reasonable in amount.

Proportionality is not simply an exercise in comparing the bill with the sum at stake.

In considering the issue of proportionality, the court will have regard to CPR rule 1.1(2)(c) where proportionality refers to: (a) the amount of money involved; (b) the importance of the case; (c) the complexity of the issues; and (d) the financial position of each party.

CPD 11 gives further useful guidance.

Costs estimates return to haunt

Three documents may assist the preparation for summary assessment.

Comparison with the paying party's statement of costs in form N260 may suggest anomalies and areas where the receiving party could be weak.

One should also consider the costs estimates given with the allocation and listing questionnaires.

It is my experience that litigators at trial fail to grasp the significance of CPD 6.4 (which requires costs estimates be served with the questionnaires) and 6.6, which permits the court to have regard to the costs estimates filed in deciding the reasonableness of the bill.

If the statement of costs is at variance with the estimates, then the receiving party must be in a position to justify this.


Next consider the statement of costs itself.

CPD 13.5 requires that the statement should follow as closely as possible the form N260.

Is it really adequate simply to insert a block figure for each item? It is inviting the objection that the figure looks too high.

I suggest a well-drawn N260 will break down the figures for documents, letters, attendances and the like.

Alternatively, counsel must know what time was spent on specific items in order to justify them.

Common errors

The receiving party must ensure that the statement of costs is accurate.

Common errors include claiming VAT for a VAT-registered company (see CPD 5).

Inaccurate descriptions of fee-earners are legion, (there is no such category as a 'partner' - each tier is experienced based and so give counsel a short CV for each fee-earner).

Check the rates for the court in question (they are published annually by the Supreme Court Costs Office in the helpful publication A Guide to the Summary Assessment of Costs).

If the solicitor intends to claim more than the guideline rate for the court then they will have to consider how this can be justified.

The test is whether it is reasonable, in all the circumstances, for the client to employ a solicitor from out of the area (see Truscott v Truscott and Wraith v Sheffield Forgemasters [1998] 1 All ER 82 and Sullivan v Co-operative Insurance (1999) The Times, 19 May).

Counsel are frequently embarrassed to find that the statement of costs claims a fast-track brief fee in excess of the block item.

Counsel can only recover 350 for cases where the value of the claim is up to 3,000, 500 for cases exceeding 3,000 up to 10,000 and 750 for cases where the claim exceeds 10,000.

The instructing solicitor frequently attends counsel through a representative on a fast-track trial.

This is fine providing the solicitor is not expecting the paying party to pay.

The attendance will be allowed as an item if 'the court considers that it was necessary for a legal representative to attend to assist the advocate' (CPR rule 46.3).

This generally means that there is something out of the ordinary.

It ought to be rare to see the advocate and a representative of the instructing solicitor at the trial.

If the item is allowed, the additional sum will be 250 to include travel and waiting.


The significance of a well-crafted statement of costs becomes apparent when one considers the effect of signing the bill.

This is required by CPD13.5(3).

The signature confirms that the statement is accurate and that it does not breach the indemnity principle.

In these times of speculative objections to bills and in particular to conditional fee agreements, the signature is a useful defence.

It is worth remembering that Bailey v IBC Vehicles Limited [1998] 3 All ER 570, CA, indicates that the signature is prima facie evidence that the bill is accurate and the indemnity principle has not been offended.

Some judges are not prepared to go behind the signature unless there is cause for suspicion that the whole truth is not being told.

If there is some glaring error in the bill then the floodgates may be opened.

Late service not fatal

Finally, practitioners must remember the requirement that the N260 be filed and served not less than 24 hours prior to the trial date (CPD 13.5(4)).

Failure to comply is not fatal but can be costly.

In McDonald v Taree Holdings (2000) The Times, 28 December ChD, the court held that non-service would not preclude a summary assessment of costs but the court should consider adjourning to allow consideration of the statement of costs.

Late in the afternoon, that adjournment may be to another day and the receiving party may find themselves liable for the costs of the adjournment.

District Judge Chris Lethem sits at Tunbridge Wells County Court