Earlier in the year I prepared an article on the case of Mullaraj v Secretary of State for the Home Department . The case provided judicial comments regarding whether a paying party should be able to obtain a ‘different order for costs’ at the conclusion of a provisional assessment simply by relying on CPR 47.20(3)(b), even when the party hasn’t beaten any previous offers made. The logic behind the decision was based on the fact that a party who did not make any offers during the detailed assessment procedure should not be placed in a more advantageous decision than those who have made an offer.
However, in Milbrooke Construction Ltd v Jones  EWHC B20 (Costs) the issue was again raised and a different approach was adopted. In this case the Bill of Costs had been reduced by 39% upon assessment and the receiving party had beaten a Part 36 offer made by the paying party. Whilst the receiving party had not beaten its own Part 36 offer, it had beaten some Calderbank offers made closer to the assessment.
In this case Costs Judge Brown considered the wording of CPR 47.20 (3)(b) and (c). The Costs Judge firstly noted that he was not bound by the previous decision in Mullaraj. Secondly, the Costs Judge noted that it is compulsory for the factors set out in CPR47.20(3)(b) and (c) to be considered. The Costs Judge noted that where there has been a reduction to the Bill at an assessment then all of the circumstances must be taken into account. The Costs Judge rejected the limitation that there had to be ‘some fraud or other some other misconduct’ involved in the preparation of the Bill of Costs.
Costs Judge Brown did concede that the decision was not to attempt to undermine the importance of Part 36 or other types of settlement offers, but highlighted the fact that these were not the be all and end all when considering the circumstances of the assessment. The Costs Judge referred to the difficulty caused by an overstated Bill of Costs in assisting the negotiation process and that significant reductions must be taken into account when making an ‘other order’. In these circumstances, the Costs Judge considered a 30% reduction to the detailed assessment costs to be a just result.
If you have any comments or queries regarding this post, please contact Kris Kilsby at [email protected]