Provisional Assessment in Housing Disrepair Costs: Why the Replies Matter

For most Housing Disrepair costs claims, provisional assessment is not an unusual procedural event at the end of a particularly large dispute. It is the route the parties are likely to end up on if detailed assessment is required.

CPR 47.15 applies where the costs claimed are £75,000 or less. In the ordinary run of Housing Disrepair work, that captures the vast majority of Bills of Costs.

That matters because it should change the way the costs claim is prepared from the beginning.

A claimant firm should not approach the Bill, Points of Dispute and Replies on the assumption that any weaknesses can eventually be explained to a Costs Judge at a hearing. Usually, nobody is there to explain them.

The provisional assessment is decided on the papers. The Bill, the supporting documents and the parties’ positions in Precedent G have to do the work themselves. That makes good drafting particularly important in Housing Disrepair costs.

Provisional assessment is the default route for most Housing Disrepair bills

The mechanics are straightforward.

Under CPR 47.15, where the amount claimed falls within the applicable £75,000 threshold, the court will ordinarily deal with the detailed assessment provisionally. The court receives Form N258 and the relevant supporting material and determines the assessment from the papers. There is no initial oral hearing.

For a Housing Disrepair Bill of £7,500, £12,000 or £20,000, that should not be treated as a distant procedural possibility. It should influence the way the Bill is drafted and the way any later Points of Dispute are answered.

The question I would ask when reviewing the file is:

If the Costs Judge had nothing except this Bill, these documents and this Precedent G, would the reason for the work still be obvious?

If the answer is no, the file has a problem.

That does not mean turning every Bill into written submissions. It means making sure the chronology, descriptions, rates, disbursements and Replies give the judge enough information to understand why the costs were incurred.

Housing Disrepair claims are particularly vulnerable to losing context because the damages figure can be modest while the work may also have involved repairs, expert evidence, continuing defects, access, Defendant delay, vulnerability or repeated developments over a lengthy period. Those matters will not explain themselves.

On provisional assessment, the Replies are the advocacy

This is probably the most important practical point.

At the provisional stage, nobody is standing in front of the Costs Judge saying:

“That attendance looks high in isolation, but let me explain what had happened immediately beforehand.”

Nobody is there to point out that three apparently similar telephone calls followed three separate failed repair appointments.

Nobody is there to explain that the surveyor was instructed because causation remained disputed rather than simply because obtaining a surveyor was the firm’s usual practice.

Nobody is there to say that the Grade A attendance challenged by the Defendant was the settlement advice on which the whole case turned, while the day-to-day work had been delegated.

If that explanation matters, it needs to be apparent on paper.

That is why generic Replies are particularly weak on provisional assessment. A Reply such as:

“The time claimed was reasonably and proportionately incurred and is maintained.”

does almost nothing. It tells the judge the receiving party disagrees. The judge already knows that.

A useful Reply answers the actual reason for the proposed reduction.

• If the Point says the client contact was excessive, identify the substantive attendances and why they were needed.
• If the Point says the surveyor’s fee was unnecessary, explain the technical issue that required expert evidence and what the report addressed.
• If the Point says the costs are disproportionate to £2,000 damages, identify the non-monetary relief, the additional work generated by Defendant conduct or any other relevant proportionality factor which genuinely applied.
• If the Point says Grade A time should have been delegated, identify what was delegated and why the particular senior task required that level of experience.

The best Replies make the Costs Judge’s job easier. They should allow the judge to move from:

Point → item → factual answer → rule or principle → amount claimed

without having to reconstruct the history of the claim unaided.

What works particularly well on paper

• Specificity.
• Dates where they matter.
• Bill item references.
• A short chronology where the objection depends on chronology.
• Clear calculations.
• Separating different objections rather than answering five points with one paragraph.
• Conceding an item where the paying party is plainly right.
• Explaining the purpose of an attendance rather than simply insisting it was necessary.
• And, where possible, pointing the judge towards the underlying document which supports the position.

What does not work well on paper

• Rhetoric.
• Repeated statements that the Defendant’s reductions are “unreasonable”.
• Long passages copied from the CPR without applying the rule to the item.
• Assertions that something is “industry standard”.
• Expecting the Costs Judge to infer why an attendance was necessary.
• Trying to turn every weak item into a proportionality or conduct argument.
• And Replies drafted on the assumption that somebody will be present later to fill in whatever has been missed.

At provisional assessment, there may be no later opportunity. The paper is the argument.

The £1,500 cap changes the economics

CPR 47.15(5) caps the costs of the provisional assessment at £1,500, plus VAT and court fees. Importantly, that cap excludes the costs of drafting the Bill itself.

That has obvious commercial consequences in Housing Disrepair.

Take an £8,000 Bill. The parties may be disputing:

• hourly rates;
• client contact;
• surveyor fees;
• counsel;
• proportionality;
• routine correspondence;
• duplication;
• and smaller individual attendances.

It is possible to spend a very large amount of time arguing over a relatively modest total. The cap means the receiving party has to be commercially disciplined about what actually matters.

Not every reduction deserves a page of Replies. Not every £30 item deserves a fight.

But equally, the value of a Point should not always be measured by looking at one item in isolation.

• A reduction of £20 repeated across 30 attendances is a £600 issue.
• A challenge to the hourly rate may affect dozens or hundreds of items.
• A classification argument about routine calls may affect a substantial section of the Bill.
• A proportionality challenge may affect the entire costs claim.

So the useful question is not simply:

“How much is this one item worth?”

It is:

What is the real financial effect of the argument across the Bill, and how strong is our position?

There is also a wider commercial question. If the likely difference between the parties is modest, settlement may make more sense than spending further time taking entrenched positions over every individual item.

The purpose of costs recovery is to recover the client’s costs commercially. It is not to win every paragraph of the Points of Dispute.

Some points are worth conceding

A provisional assessment Reply becomes more persuasive when the receiving party does not pretend every item is perfect. If the file contains:

• a genuinely routine call claimed as a timed attendance;
• obvious duplication;
• a vague entry which cannot now be supported;
• excessive time for a straightforward task;
• or an unexplained disbursement,

there may be little value in defending it simply because it appears in the Bill. Conceding a weak £40 point can make the stronger £1,000 issue easier to see.

The same applies during negotiation. The objective is not necessarily to defend the Bill exactly as drawn. The objective is to identify what can properly be recovered and protect the parts of the claim that matter.

Is it worth requesting an oral hearing?

After the provisional assessment, either party can request an oral hearing within 21 days of receiving the notice of the provisional assessment. That decision should not be taken lightly.

CPR 47.15(10) creates an important costs risk. The party requesting the oral hearing will normally have to pay the costs of that hearing unless it achieves an adjustment in its own favour of at least 20% of the sum provisionally assessed.

That is a meaningful threshold.

Suppose the Bill is provisionally assessed at £6,000. Twenty per cent is £1,200.

• If the receiving party requests the oral hearing, it would need an adjustment in its favour of at least £1,200 to meet the threshold. In practical terms, it would need to improve the provisional result from £6,000 to at least £7,200.
• If the paying party requests the hearing, it would need to secure a reduction of at least £1,200, taking the figure to £4,800 or below.

That changes the decision considerably. The question is not:

“Do we disagree with the provisional assessment?”

It is:

“Is there a realistic prospect of improving our own position by at least 20% of the amount provisionally assessed?”

Those are very different questions.

When I would be cautious about requesting a hearing

A receiving party should be particularly careful where:

• the disputed items are numerous but individually small;
• the complaint is mainly that the Costs Judge was too harsh rather than plainly wrong;
• the documentary record is weak;
• important explanations were missing from the original Replies;
• the difference being sought is comfortably below the 20% threshold;
• or the proposed challenge depends heavily on discretionary judgments about time or proportionality.

An oral hearing is not simply a second attempt at the entire assessment because the first result was disappointing. There needs to be a commercially sensible target.

When an oral hearing may deserve serious consideration

The position may be different where the provisional assessment contains a significant identifiable issue. For example:

• a substantial category of costs has been disallowed on a mistaken basis;
• the wrong hourly rate has materially affected the Bill;
• a major counsel or expert fee has been disallowed;
• a clear misunderstanding affects numerous entries;
• a substantial proportionality reduction appears vulnerable to challenge;
• or the potential adjustment comfortably exceeds the 20% threshold.

Even then, the size of the possible adjustment is only one consideration. The costs of the hearing, prospects of success and overall economics still matter. A firm should calculate the actual target before requesting the hearing rather than proceeding simply because it disagrees with the result.

The 20% calculation should be done before the request

This sounds obvious, but it is worth making explicit.

If the provisional assessment is £10,000, the adjustment threshold is £2,000.

Ask:

Which findings are we challenging?

Then:

What is the realistic monetary improvement if we succeed?

If the answer is:

“At absolute best, probably £1,200,”

the CPR 47.15(10) position should be staring everyone in the face before the oral hearing is requested.

Likewise, if one wrongly disallowed surveyor fee and one substantial hourly-rate issue together put £3,500 realistically in dispute, the analysis is different.

Put numbers against the challenge. Do not make the decision emotionally.

When might the court decide provisional assessment is unsuitable?

CPR 47.15(6) allows the court to decide that a matter is unsuitable for provisional assessment and list it for hearing instead.

The rule does not mean that an ordinary Housing Disrepair Bill becomes unsuitable merely because the Points of Dispute are long or the parties disagree strongly. The whole provisional assessment system exists to determine disputed costs on paper.

In practical terms, I would expect unsuitability to arise only where the nature of the assessment means the paper procedure is not an appropriate way to resolve it. That might potentially include unusually complicated entitlement issues, extensive factual disputes which cannot sensibly be resolved from the papers, an exceptionally involved Bill or another feature making oral consideration necessary.

I would not suggest that any particular factor automatically triggers CPR 47.15(6). And I would not describe this as common in Housing Disrepair without evidence to support that.

For an ordinary HDR Bill under the threshold, firms should prepare on the assumption that provisional assessment will happen on the papers.

The Bill has to work without somebody explaining it

That starts before Points of Dispute are ever served.

A well-prepared Bill should make clear:

• what the claim was about;
• the important chronology;
• the costs entitlement;
• the relevant funding position;
• the fee earners and hourly rates;
• the work undertaken;
• the major disbursements;
• what happened with repairs;
• any important offers;
• and the outcome.

Descriptions matter. Compare:

Review file – 0.3.

with:

Review Defendant’s revised works proposal against surveyor’s schedule before advising Claimant on settlement – 0.3.

The second does not automatically make the time recoverable. But it gives the Costs Judge something that can actually be assessed.

The same applies to disbursements. If a surveyor fee is challenged, the fee note and expert work should support what is being claimed. If counsel was instructed, the fee note and instruction should make the purpose intelligible. If the firm relies upon additional work generated by Defendant conduct, the chronology should show what actually happened. If vulnerability generated additional work, the file should explain that connection without unnecessarily disclosing sensitive information.

Provisional assessment rewards files which explain themselves.

Precedent G should not become an essay competition

Because the Replies matter so much, there is a temptation to make them enormous. That is not necessarily better.

The Costs Judge has to assess the Bill. A 40-page set of Replies repeating the same proposition under every Point can make the genuinely important issues harder to identify.

The better approach is to be complete but economical.

• Where several Points raise the same legal issue, explain the principle clearly and then apply it to the relevant items.
• Where the Point is item-specific, answer the item.
• Where the paying party is right, consider saying so.
• Where the dispute is mathematical, show the calculation.
• Where the issue depends on a document, identify it.

The strength of the Reply comes from precision, not length.

Practical checklist before a Housing Disrepair Bill reaches provisional assessment

Before the papers go to the court, I would want to know:

• Is the costs entitlement clear?
• Does the Bill match the order or settlement?
• Are the correct periods included?
• Are the fee-earner grades and rates accurate?
• Is the VAT position correct?
• Are counsel’s fee notes available?
• Are surveyor and other disbursement invoices available?
• Does the Bill explain significant expert work?
• Are routine and substantive communications treated properly?
• Is client-contact time described sufficiently?
• Is any Grade A work identifiable and defensible?
• Is duplication obvious anywhere in the Bill?
• Are unusual attendances adequately explained?
• Does the chronology explain Defendant-generated work?
• Is vulnerability relied upon only where it genuinely caused additional work?
• Are the Points of Dispute answered individually rather than generically?
• Are weak items being defended unnecessarily?
• Are calculations clear?
• Does Precedent G identify the true value of each dispute?
• If the judge reads nothing else, will the papers explain why the main disputed costs were incurred?

The final question matters most. At provisional assessment, there may be nobody there to rescue a poorly explained item.

The practical point

For Housing Disrepair firms, provisional assessment should not be treated as something that begins when Form N258 is filed.

It starts much earlier. It starts with the way the file is recorded. It continues through the way the Bill is drafted. And by the time Points of Dispute arrive, the receiving party should already know which parts of the costs claim can be defended strongly and which parts should be dealt with commercially.

The paper assessment changes the emphasis. If the Costs Judge needs to understand something in order to allow the cost, put it on the paper. Do not assume somebody will get the opportunity to explain it later.

And if the provisional result is disappointing, do the 20% calculation before requesting an oral hearing. A disagreement with the assessment is not enough. The numbers still have to make sense.