CPR sanctions for failure to serve funding documents with a Bill of Costs
At Harmans we still find that certain Claimant law firms, and even some Costs Lawyers, still refuse to provide the information required by CPR Costs Practice Direction 32.5(1)(c) & (d) when serving a Bill of Costs – namely a Statement of Reasons for the Success Fee (or alternatively a copy of the Risk Assessment), a Statement setting out the definition of certain terms within the CFA (or the CFA itself) and a copy of the ATE Policy Schedule or Certificate all of which must be provided with the Bill when claiming any additional liability.
The pre-April 2013 Rule 44.3B remains very much in force as does the corresponding Practice Direction. These provide that a party may not recover any percentage increase where it has failed to comply with a requirement in the Costs Practice Direction or a Court Order.
Perhaps it might be worth quoting the relevant Rule and Practice Direction in full to remind those still in doubt:-
(1) A party may not recover as an additional liability
(c) any additional liability for any period in the proceedings during which he failed to provide information about a funding arrangement in accordance with a rule, practice direction or court order
(d)any percentage increase where that party has filed to comply with (i) a requirement of the Costs Practice Direction; or (ii) a Court Order.
(1) (c) where the conditional fee agreement was entered into on or after 1st November 2005 (except in cases where the percentage increase is fixed by CPR Part 45, sections II to V), either a statement of the reasons for the percentage increase or a copy of the risk assessment prepared at the time that the conditional fee agreement was entered into;
(d) if the conditional fee agreement is not disclosed (and the Court of Appeal has indicated that it should be the usual practice for a conditional fee agreement, redacted where appropriate, to be disclosed for the purpose of costs proceedings in which a success fee is claimed), a statement setting out the following information contained in the conditional fee agreement so as to enable the paying party and the court to determine the level of risk undertaken by the solicitor-
(i) the definition of ‘win’ and, if applicable, ‘lose’;
(ii) details of the receiving party’s liability to pay costs if that party wins or loses; and
(iii) details of the receiving party’s liability to pay costs if that party fails to obtain a judgment more advantageous than a Part 36 offer.
The section in brackets that says: “the Court of Appeal has indicated that it should be the usual practice for a conditional fee agreement, redacted where appropriate, to be disclosed for the purpose of costs proceedings in which a success fee is claimed” refers to the case of Hollins v Russell  EWCA Civ 718.
(2) If the additional liability is an insurance premium, a copy of the insurance certificate showing –
(a) whether the policy covers –
(i) the receiving party’s own costs;
(ii) the receiving party’s opponent’s costs;
(iii) the receiving party’s own costs and opponent’s costs; and
(b) the maximum extent of that cover; and
(c) the amount of the premium paid or payable.
And see – Long v Value Properties Ltd & Anor  EWHC 2981 (Ch) which involved an Application for relief from sanction for failure to provide the required documents or information with the Bill and the subsequent Appeal.
Jim Knight, Partner and Costs Lawyer