This case confirms a point of some significance for Claimant lawyers which must be borne in mind when liability issues are resolved either by judgment or settlement, leaving the quantum of damages to be assessed. The short point is that an order resolving the issue of liability alone, which leaves damages to be assessed, but granting the Claimant an entitlement to the costs of establishing liability, does not give rise to an entitlement to apply for detailed assessment of those costs unless the order makes express provision for immediate assessment.
In ABA the Claimant issued a claim alleging clinical negligence on 22 December 2017. Master Cook made an order that liability be tried as a preliminary issue on 6 February 2019. The parties agreed a liability split giving the Claimant 65% of the damages, which were to be assessed. This was recorded in an order dated 11 January 2021 which also provided for costs to be subject to detailed assessment if not agreed. The matter then returned to Master Cook who made directions leading to a quantum trial in a window between 6February and 26 May 2023.
In the meantime, on 13 August 2021, the Claimant served a notice of commencement of detailed assessment of the liability costs, based on the 11 January 2021 order. The Defendant applied for the notice to be set aside on the grounds that the notice was premature as the claim had yet to conclude.
The relevant provisions of the CPR are to be found at CPR 47.1 and Practice Direction 47, paragraphs 1.1 to 1.4. CPR 47.1 reads:
“The general rule is that the costs of any proceedings or any part of the proceedings are not to be assessed by the detailed procedure until the conclusion of the proceedings, but the court may order them to be assessed immediately. (Practice Direction 47 gives further guidance about when proceedings are concluded for the purpose of this rule.)”
The Practice Direction says:
“1.1 For the purposes of rule 47.1, proceedings are concluded when the court has finally determined the matters in issue in the claim, whether or not there is an appeal, or made an award of provisional damages under Part 41.
1.2 The court may order or the parties may agree in writing that, although the proceedings are continuing, they will nevertheless be treated as concluded.
1.3 A party who is served with a notice of commencement (see paragraph 5.2 below) may apply to a costs judge or a District Judge to determine whether the party who served it is entitled to commence detailed assessment proceedings. On hearing such an application the orders which the court may make include: an order allowing the detailed assessment proceedings to continue, or an order setting aside the notice of commencement.
1.4 A costs judge or a District Judge may make an order allowing detailed assessment proceedings to be commenced where there is no realistic prospect of the claim continuing.”
The Claimant argued that the order of 11 January 2021 was a final order and the claim should be treated as concluded notwithstanding that the quantum of the claim had yet to be assessed. This was said to be on the “doctrine of merger”, or that judgment on liability had established the cause of action (negligence) and the claim was thus concluded (the cause of action had “merged” into the judgment).
The Costs Judge (Master Leonard) rejected that argument as contrary to authority and to the CPR. As to authorities, it appears that the question of whether the costs of a preliminary issue could be subject to detailed assessment has only been considered in one case since the advent of the CPR and that was at first instance in the SCCO (and it was not a personal injury split trial case). Master Campbell ruled in that case that the costs of the preliminary issue could not be assessed immediately in the absence of an order to that effect. Master Leonard also found support from the approach taken to interlocutory appeals. As to the interpretation of the CPR, the Costs Judge found that on a proper analysis of the rules the claim was ongoing and had not been concluded by the judgment on liability. Quantification of damages was an essential part of the Claimant’s pleaded case, and that had yet to be determined. Thus, it could not be said that the matter had reached “the conclusion of proceedings” or that “the court has finally determined the matters in issue in the claim.”
As the Costs Judge had no power to make an order for immediate assessment under r47.1 (per David Richards LJ in Kharia v Shergill  EWCA Civ 1687), he determined that the notice of commencement must be set aside. In the absence of an order for immediate assessment or an agreement between the parties for immediate assessment, the Court did not have jurisdiction to undertake a detailed assessment until the final conclusion of the claim.
In some concluding comments, the Costs Judge observed that it is not uncommon for receiving parties to commence detailed assessment when only liability has been determined, or even for paying parties to serve Points of Dispute without realising that detailed assessment is premature. I would add that, on that premise, it is likely that agreements have been reached between the parties on the amount of such costs. It is not inconceivable that detailed assessment hearings have proceeded in spite of the provisions of r47.1. However, in the absence of express agreement between the parties that the detailed assessment should proceed despite quantum being at large, then such proceedings can always be derailed by the paying party or the Court pointing out an absence for an order for detailed assessment. The Costs Judge ruled that it was not sufficient to establish an agreement for immediate assessment for a paying party to have entered into correspondence or negotiations on costs.
This situation can be avoided by obtaining or agreeing an order for immediate assessment when the issue of liability is concluded. If the matter is raised in settlement negotiations and the Defendant is unwilling to agree to such a provision then at least this is clear and the Claimant can consider whether it affects their willingness to settle or their approach to seeking a payment on account of costs.
In this regard it is relevant to bear in mind Master Leonard’s concluding comment:
“I will only say, with apologies for perhaps stating the obvious, that the default position being that interest will accrue upon the Claimant’s unpaid liability costs at 8% per annum, it might be to the parties’ mutual advantage to use the work done to date in an effort to settle what would appear to be a substantial claim for costs.”