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5.5
Costs-only proceedings
One additional matter
should be raised at this juncture. Where the substance of a
dispute is settled, the parties are often able to reach a global settlement covering the
costs incurred. However, this is not always the case and costs can be a fatal sticking
point. Such costs may be in more significant amounts where pre-action protocols have
been observed and so may become a more important factor in determining whether
settlement can be achieved. A defendant who is prepared to accept liability and to pay
the damages claimed may nevertheless regard the claimant's costs incurred in meeting
protocol obligations to be unreasonably high and unacceptable. It is therefore
important that the front-loaded costs generated by pre-action protocols should not be
allowed to undermine settlements achievable on the substantive dispute.
The CPR's response to this potential problem has been to create a procedure enabling
parties to bring "costs-only proceedings". This is a procedure allowing the parties to
seek taxation of the pre-settlement costs even though no proceedings seeking
substantive relief have been commenced in court. CPR 44.12A relevantly provides as
follows :-
"(1)
This rule sets out a procedure which may be followed where—
(a)
the parties to a dispute have reached an agreement on all issues (including
which party is to pay the costs) which is made or confirmed in writing; but
(b)
they have failed to agree the amount of those costs; and
(c)
......, no proceedings have been started.
(2)
Either party to the agreement may start proceedings under this rule by filing a claim
form in accordance with Part 8.
(3)
The claim form must contain or be accompanied by the agreement or confirmation.
(4)
In proceedings to which this rule applies the court—
(a)
may
(i)
make an order for costs to be determined by detailed assessment; or
(ii)
dismiss the claim; and
(b)
must dismiss the claim if it is opposed."
Notes
Touched on by the Hon Mr Ambrose Lau speaking in Legco.
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