Lord Justice Jackson urges national rollout of provisional assessment procedure for costs

A pilot of Provisional Assessment – a procedure where the court provisionally assesses costs on paper – has proved successful and so the scheme should be rolled out nationally, Lord Justice Jackson has said.

This would see the procedure incorporated in the Civil Procedure Rules (CPR) and become part of the service provided at all civil court centres for bills up to £25,000.

Under PA, if either party is dissatisfied, it can seek an oral hearing. However, that party pays the costs of that exercise if it does not achieve a substantial improvement upon the provisional assessment.

In his final report on civil litigation costs, published in January 2010, the judge recommended that PA in respect of bills up to £25,000 should be piloted at one of the larger court centres outside London.

The Provisional Assessment Pilot began on 1 October 2010 and has been running at Leeds, Scarborough and York County Courts.

After receiving a report based on the data collected by Leeds (a much larger court centre than the other two), Lord Justice Jackson concluded that PA had been a success for six reasons:

1. The process was quick and simple. “It thus enables many parties, who would normally be put off by the expensive and convoluted process of detailed assessment, to obtain a judicial assessment of bills,” the judge said. “Thus the process addresses one major complaint about costs which was repeatedly pressed upon me during the costs review.”
2. Because more parties appeared to be seeking provisional assessment, there might be increased fee income for the courts.
3. The figures which were assessed or agreed following provisional assessment were likely to be fairer than settlements negotiated in circumstances where neither party could face going through the process of normal detailed assessment.
4. The process was far cheaper for the parties than traditional detailed assessment, because (save in rare cases) they avoided the costs of preparing for and attending a hearing. “Indeed, unlike traditional detailed assessment, it is cost effective,” the judge said. “DJs Hill and Bedford [who ran the pilot] estimate that the savings for the parties are at least £4,000 per case. This is because the case usually ends after the PA and thus the parties avoid a half day or one day hearing.”
5. Informal feedback from parties had been positive.
6. Court time was saved, because the judicial assessment was accomplished in about 40 minutes, rather than half a day or a day.

However, the report acknowledged that there had been teething problems early in the pilot as a result of the format in which PA decisions were sent out. This had been overcome by a revised system.

Lord Justice Jackson also acknowledged that the PA procedure was capable of a number of improvements. These include a capped sum of costs for the PA process, with the judge proposing that the rule or practice direction should say that the court will award “a reasonable sum not exceeding £1,500”.

The report said PA should be seen as the first stage of a two-stage process – “in other words the same district judge should do both the PA and the oral hearing (unless prevented by illness or other absence)”. The oral hearing should not be seen as an appeal against the PA, but rather as a second stage of the process before the assigned district judge.

Lord Justice Jackson said draft rules for PA will be presented in due course for consideration by the Rule Committee, with a view to incorporation in the CPR.

If the recommendation for national rollout is accepted, court staff and district judges would have to receive proper training before the procedure is introduced, he added.

A copy of the report on the pilot can be downloaded here.

Philip Hoult