Detailed Assessment of Costs: A Complete Guide

When a court orders one party to pay another’s costs but the amount is not agreed, the figure is fixed through detailed assessment, the formal process by which the court decides how much is actually payable. This guide explains what detailed assessment is, when it applies, the procedure stage by stage, the time limits that matter, and the points most often fought over, under CPR Part 47.

What is detailed assessment?

Detailed assessment is the procedure for quantifying costs where an entitlement to costs exists but the parties cannot agree the amount. It is governed by CPR Part 47 and its supporting Practice Direction. The receiving party prepares a bill of costs setting out the work done and the sums claimed; the paying party challenges the items it disputes; and, if those disputes are not resolved by agreement, the court assesses the bill and certifies the amount due.

It is distinct from summary assessment, where the court fixes costs immediately at the end of a hearing without a detailed bill. Detailed assessment is used for larger or more complex costs claims, and for costs following the conclusion of proceedings.

When does a right to detailed assessment arise?

A right to detailed assessment is triggered by an event that creates a costs entitlement: most commonly a judgment or order for costs, but also acceptance of a Part 36 offer, a notice of discontinuance, or an award of costs on an interim application. Once that right arises, the receiving party can begin the process; if they delay, the paying party has remedies, and interest and conduct can be affected.

Provisional assessment vs detailed assessment

Not every costs claim goes to a full hearing. The route depends largely on the size of the bill.

Provisional assessment applies where the costs claimed do not exceed £75,000. The court assesses the bill on the papers, without an oral hearing, on the basis of the bill, the supporting papers and the Points of Dispute (set out in Precedent G). It is quicker and cheaper, and the costs of the provisional assessment are capped at £1,500 plus VAT and the court fee (CPR 47.15(5)). A party who is dissatisfied with the provisional outcome may request an oral hearing, but must improve on the provisional figure by 20% or more to avoid paying the costs of that hearing (CPR 47.15(10)). This is a real tactical decision point.

Detailed assessment with a hearing is the route for bills above £75,000, and for any case where an oral hearing is needed to resolve the disputed items. The disputed items are argued before a costs judge or district judge, who assesses the bill item by item.

The detailed assessment process, stage by stage

1. Commencement. The receiving party serves a notice of commencement (Form N252) together with the bill of costs (an electronic bill, Precedent S, where required) and the relevant supporting papers. This must be done within three months of the date of the judgment, order or event that gave the right to detailed assessment (CPR 47.7).

2. Points of Dispute. The paying party serves Points of Dispute in the format of Precedent G, within 21 days of service of the notice of commencement (CPR 47.9). Points of Dispute should identify the specific items challenged and state the nature and grounds of each dispute, concisely. If the paying party serves nothing within the 21 days, the receiving party may apply for a default costs certificate for the full amount of the bill.

3. Replies. The receiving party may serve Replies to the Points of Dispute within 21 days of service of the Points of Dispute (CPR 47.13). Replies are optional but often valuable: they let the receiving party answer the paying party’s objections point by point before the matter reaches a judge.

4. Assessment. For bills of £75,000 or less, the court carries out a provisional assessment on the papers. For larger bills, or where a hearing is requested, the receiving party files a request for a detailed assessment hearing (Form N258) with the documents required by the Practice Direction, and the disputed items are argued at the hearing.

5. Final costs certificate. Once the assessment is complete, the court issues a final costs certificate setting out the amount payable, together with interest (CPR 47.16). That certificate is enforceable as a judgment for the sum due.

Time limits at a glance

• Commence detailed assessment: within 3 months of the right to costs arising (CPR 47.7).
• Points of Dispute: within 21 days of the notice of commencement (CPR 47.9).
• Replies (optional): within 21 days of the Points of Dispute (CPR 47.13).
• Request a detailed assessment hearing: within 3 months of the expiry of the period for commencing (CPR 47.14).

Missing these dates has consequences: default costs certificates against a silent paying party, interest and conduct arguments against a receiving party who delays. The time limits are a frequent source of satellite disputes in their own right, and an out-of-time default costs certificate will only be set aside if the court is persuaded under the Denton relief-from-sanctions test.

Standard basis vs indemnity basis

The basis of assessment shapes the whole exercise. On the standard basis, the receiving party recovers costs that are reasonable and proportionate, and any doubt is resolved in favour of the paying party. On the indemnity basis, the proportionality requirement falls away and any doubt is resolved in favour of the receiving party, which usually produces a materially higher recovery. The basis is set by the costs order, and arguments about which basis applies are themselves often hard-fought.

What gets disputed on assessment?

Most of the contest at a detailed assessment turns on a familiar set of issues:

• Proportionality: the proportionality cross-check can reduce an otherwise reasonable bill, and is one of the most contested areas in modern costs practice.
• Hourly rates: whether the rates claimed are reasonable, measured against the Guideline Hourly Rates and the complexity of the work.
• Time claimed: whether the hours recorded were reasonably and necessarily incurred.
• Counsel’s fees and experts’ fees: the reasonableness of disbursements.
• Additional liabilities: success fees and ATE premiums in the cases where they remain recoverable.
• Conduct and offers: including Part 36 and “without prejudice save as to costs” offers, which can transform who pays the costs of the assessment itself.

Who pays the costs of the assessment?

Detailed assessment has its own costs, and they can be significant. Under CPR 47.20, the general rule is that the receiving party is entitled to the costs of the detailed assessment proceedings but the court has a broad discretion to order otherwise, particularly where the paying party has made an offer (including a Part 36 offer) that the receiving party fails to beat at assessment. Well-judged offers are therefore central to the economics of the whole exercise, on both sides.

Frequently asked questions

This guide is for general information and does not constitute legal advice. For advice on a specific matter, please contact TMC Legal.