Khaira v Shergill [2017] EWCA Civ 1687

The facts

This case raised the interesting issue in respect of whether there could be a detailed assessment of the costs of an interlocutory appeal, before the conclusion of the underlying claim.

The defendants appealed against a decision that the claimants were entitled to seek a detailed assessment of their costs of responding to a strike out application, before the main claim had been determined.

The defendants had applied to strike out the claim and the matter reached the Supreme Court where the application was rejected. The Supreme Court ordered that the claimant should proceed to trial and that the defendant pay the claimants’ costs both in the Supreme Court and in the Court of Appeal, to be assessed on the standard basis.

Prior to trial the claimants issued a notice of commencement for a detailed assessment of their costs of the strike-out application. It was not disputed that the claimants were entitled under the Supreme Court Rules 2009 to an immediate assessment of the costs incurred for dealing with the application at the Supreme Court hearing. However, the defendants disputed that the claimants were entitled to an immediate assessment of the Court of Appeal hearing costs for the strike out application.

The defendants argued that, in the absence of an order for an immediate assessment of those costs, CPR, r. 47.1 prevented any detailed assessment until the conclusion of the “proceedings” and in this context “proceedings” meant the underlying claim.

Decision

The matter went to the Court of Appeal where it was concluded that CPR, r. 47.1 and the accompanying practice direction were to be read together and provided that the costs of any proceedings were not to undergo detailed assessment until the court had finally determined the matters in issue in the claim. It was stated that this was the case, regardless of whether or not there had been an interlocutory appeal. It was stated that “proceedings” did not refer only to first instance proceedings.

The Court of Appeal concluded that there was no support for reading “proceedings” for the purpose of CPR, r. 47.1 as including interlocutory appeals. Further, the Court of Appeal concluded that CPR, r. 47.1 did not entitle the claimants to an immediate assessment of their Court of Appeal costs, without any order to that effect. It was stated that there was no automatic detailed assessment of the costs of an interlocutory appeal so an order of the court was required.

It was held that a costs judge did not have the jurisdiction to order a detailed assessment where the Court of Appeal had not ordered for there to be one. In this case, the Court of Appeal had made the costs order and there was nothing in the CPR or elsewhere to suggest that the High Court could exercise a power vested in the Court of Appeal. It was specifically stated that the primary function of a costs judge was to assess costs and not to decide whether there should be an assessment.

The Court of Appeal also held that the order of the Supreme Court did not entitle the claimants to an immediate assessment of their Court of Appeal costs for dealing with the defendants’ strike out application. However, the Supreme Court Rules 2009 entitled the claimants to an immediate assessment of the costs incurred at the Supreme Court hearing.

What this means for you

This case highlights that the costs of dealing with interlocutory appeals will not be dealt with by way of detailed assessment prior to the conclusion of the substantive case unless there is an express order from the court allowing for there to be an immediate assessment.. This applies to interlocutory appeals up to Supreme Court level. If the matter goes to the Supreme Court then the Supreme Court Rules 2009, entitle the winning party to an immediate assessment of the costs incurred of dealing with the interlocutory appeal in the Supreme Court.

It can be seen that the costs of dealing with an interlocutory appeal are just as easily dealt with at the conclusion of the claim. In the event that a party wishes for a detailed assessment of their costs to take place at an earlier stage then they should ensure that this is provided for in the court order otherwise it will not be dealt with until the conclusion of the overall claim.

This judgment also makes clear that the primary function of a costs judge is to assess costs. A costs judge does not have a general jurisdiction to order assessments but can determine whether an entitlement exists. It also provides that a costs judge cannot order an assessment where there is no entitlement for there to be one. Here, there was no entitlement because there was no provision made for a detailed assessment in the Court of Appeal’s order.