The Claimant had successfully appealed a decision of Costs Judge Master Whalan in respect of the costs of a detailed assessment that concluded at provisional assessment stage. The issue at stake was whether CPR 36.17(4) could dislodge the cap set out in 47.15(5).
Rule 47.15(5) states that the court will not award any party costs of more than £1,500 plus VAT plus court fees if the matter concludes at provisional assessment.
In Lowin, the Appellant had made a Part 36 offer in respect of her costs of the action, which she bettered (by £255) on provisional assessment. The Costs Judge agreed that her costs should be assessed on the indemnity basis pursuant to 36.17(4) as one of the costs consequences of achieving a result as advantageous as the proposals contained in her Part 36 offer. However, he stated that the cap in 47.15(5) remained intact. In particular, he drew a distinction between the instant case and the decision in Broadhurst v Tan  EWCA Civ 94.
On appeal, the Appellant continued to argue that Broadhurst did apply to the instant case.
On the appeal Mrs Justice Laing held that there was indeed a conflict between Rule 36.17 and 47.15(5), because the latter derogated from the entitlement to costs on the indemnity basis conferred by Part 36. In resolving the conflict, the scheme of reasoning contained in Broadhurst provided the answer. If the draftsman of the Rules Committee had wished Part 36 to be modified so that the cap would remain then that would have been stated. The Court further stated that the dislodging of the cap would incentivise parties to accept reasonable costs offers because if they did not, they would be at risk of adverse cost orders pursuant to Part 36.
The Appeal was granted, and the matter remitted to Master Whalan to re-assess the Appellant’s costs of the detailed assessment on an indemnity basis, without those costs being capped by Rule 47.15(5).
The matter was then subject to an appeal to the Court of Appeal which, today, (19 December 2017) handed down its judgement finding for the Appellant.
The comments of Lady Justice Asplin as follows:
- … I do not consider that the Judge was right to conclude as she effectively did at  and  of the judgment that there is a material conflict between costs assessed on the indemnity basis and costs assessed on that basis subject to a cap.
- CPR rule 47.20(4) provides expressly that Part 36 shall apply to the costs of a detailed assessment subject to four express modifications which are irrelevant for these purposes. No mention is made of CPR Part 47.15(5) and it is not modified in any way. It seems to me that if it had been intended that that rule was to be disapplied in the case of an assessment of costs on the indemnity basis under CPR rule 36.17(4)(b) there would have been an express reference to it in either or both of the provisions or in rule 47.20(4). There is nothing in any of those rules to suggest that rule 47.15(5) should be disapplied or modified.
- In my judgment, therefore, no tension or conflict arises in this case. I also agree with Mr Carpenter that the decision in Broadhurst is not relevant here. As the Judge pointed out, it was concerned with a direct conflict between provisions as to fixed and assessed costs and with completely different CPR provisions. Furthermore, CPR rule 36.14A (now 36.21) made and makes express reference to the precise circumstances where a claim no longer proceeds under the RTA or EL/PL protocol which is subject to the fixed costs regime. By contrast, CPR rule 47.20 merely applies Part 36 to the costs of detailed assessment proceedings with certain modifications and no express reference is made to the relationship between rules 47.15(5) and 36.17(4) and there is nothing else to suggest that the draftsman had the issue of the relationship between those rules in mind. It seems to me that Master Whalan’s approach to the matter was entirely correct.
- Such a construction is also consistent with the policy behind both CPR rule 47.15 and Part 36. It does not undermine the intention to encourage the quick and cheap resolution of the assessment of costs in cases in which the costs claimed are £75,000 or below. Nor does it deprive the successful party of the not inconsiderable benefits in CPR rule 36.17(4)(a) – (d) albeit that the costs under (b) are subject to the cap.
- It is not necessary, therefore, to consider the principle applied in the Solomon decision. It was concerned with Rule 36.10 (now rule 36.13) and Section II of Part 45. Moore-Bick LJ held at  that Rule 36.10 contained rules of general application whereas Section II of Part 45 was specifically directed to a narrow class of cases, being low value road traffic cases. Had it been necessary, I would have concluded that CPR Part 36 contains general provisions which apply, for the most part, across the spectrum of civil litigation whereas rule 47.15 applies to a discrete class of cases to which the provisional assessment provisions apply. Accordingly, rule 47.15 would have taken precedence.
- It also follows that the question of whether the Judge took proper account of the disapplication of the cap in CPR rule 47.15(5) in other situations arising on provisional assessment, does not arise. I should add, however, that were it a correct interpretation of the Rules that the cap was disapplied under CPR rule 36.17(4)(b) I do not consider that it would be a surprising or extraordinary proposition that the position would be the same in relation to the paying party’s costs under CPR rule 36.17(3).
- It is also unnecessary to consider the alleged effect in relation to claims in the Intellectual Property Enterprise Court under Section IV Part 45, Aarhus Convention claims or to comment upon HHJ Hacon’s decision in the Phonographiccase and whether the Judge gave proper consideration to the effect of her construction upon the provisional assessment regime which was intended to be low cost and to the alleged practical difficulties which would arise from her construction. It is equally unnecessary to consider whether the Judge gave proper weight to the alleged practical difficulties arising from her conclusions.
- For all the reasons set out above, I would allow the appeal.