How to Obtain Summary Costs Assessment in Commercial Litigation

In commercial litigation, costs can become a significant part of the overall dispute. After a judgment or order is made, the successful party is often entitled to recover legal costs from the losing party. In certain cases, the court can determine those costs quickly through a process known as summary costs assessment.

Summary costs assessment is designed to provide a swift and proportionate determination of legal costs without requiring a detailed, time-consuming assessment procedure. It is commonly used in lower-value or straightforward commercial disputes where full detailed assessment would be disproportionate.

This article explains how to obtain summary costs assessment in commercial litigation, the legal framework, procedural steps, and key considerations under the Civil Procedure Rules.

What Is Summary Costs Assessment?

Summary costs assessment is a procedure where the court assesses and determines the amount of legal costs payable immediately after a hearing or judgment.

It is governed primarily by:

• CPR Part 44 (General rules about costs)
• CPR Part 47 (Detailed assessment of costs, including summary assessment procedure)
• Practice Direction 44

Unlike detailed assessment, which involves a separate post-judgment process, summary assessment is carried out by the judge at or shortly after the hearing.

It is most commonly used for:

• Interim applications
• Short hearings
• Fast-track and some multi-track cases
• Commercial interlocutory disputes

When Is Summary Costs Assessment Used?

Courts will typically use summary assessment where:

• The hearing lasts no more than one day
• The judge has sufficient information to assess costs fairly
• The costs are not excessively complex
• It is proportionate to deal with costs immediately

In commercial litigation, this often applies to:

• Interim injunction hearings
• Case management conferences
• Strike-out or summary judgment applications
• Procedural disputes between parties

Where costs are complex or substantial, the court may instead order a detailed assessment.

Legal Principles Governing Costs Assessment

When deciding costs, the court applies the general principles under CPR Part 44, including:

1. Proportionality

Costs must be reasonable and proportionate to:

• The value of the dispute
• The complexity of the case
• The importance of the issues
• The conduct of the parties

2. Reasonableness

Only costs that are reasonably incurred and reasonable in amount are recoverable.

3. Conduct of the parties

The court considers behaviour such as:

• Compliance with court orders
• Attempts to settle
• Whether costs were unnecessarily increased

4. Success in the proceedings

The general rule is that the successful party is entitled to costs, but this is subject to the court's discretion.

Step-by-Step: How to Obtain Summary Costs Assessment

Step 1: Prepare a detailed costs schedule

The party seeking costs must prepare a statement of costs, usually using Form N260.

This should include:

• Solicitor and counsel fees
• Disbursements (e.g. court fees, expert reports)
• Time spent on the matter
• Hourly rates
• Breakdown of work undertaken

The schedule must be filed and served in advance of the hearing, typically at least 24 hours before.

Step 2: Ensure eligibility for summary assessment

Before the hearing, confirm that:

• The hearing is suitable for summary assessment
• The duration is likely to be short
• The judge is expected to deal with costs immediately

If the case is complex or lengthy, detailed assessment may be more appropriate.

Step 3: Serve the costs schedule on the other party

The costs schedule must be provided to the opposing party so they can:

• Review the figures
• Raise objections
• Prepare counter-submissions

Failure to serve properly may result in adjournment of costs determination.

Step 4: Attend the hearing

At the end of the substantive hearing, the judge will:

• Consider each party's costs schedule
• Hear brief submissions on disputed items
• Apply proportionality and reasonableness tests
• Decide the amount payable

The process is typically brief and conducted immediately after the main issues are resolved.

Step 5: Court makes summary assessment order

The judge will issue an order specifying:

• The total costs payable
• The deadline for payment
• Any set-off or adjustments between parties

This order is enforceable as a court judgment.

What Costs Can Be Included?

Summary assessment typically includes:

• Solicitors' fees (hourly rates)
• Counsel's fees
• Court fees
• Expert report fees (if relevant to the hearing)
• Travel and administrative expenses
• VAT where applicable

However, the court may reduce or disallow excessive or disproportionate items.

How Courts Decide the Amount

Judges consider:

• The complexity of the hearing
• Reasonableness of time spent
• Market rates for solicitors
• Necessity of work undertaken
• Overall proportionality

The court may make percentage reductions if costs appear excessive or poorly justified.

Difference Between Summary and Detailed Costs Assessment

Summary assessment

• Immediate determination
• Usually same day as hearing
• Used for shorter or simpler hearings
• Faster and less formal

Detailed assessment

• Separate post-judgment process
• Conducted by a costs judge
• Used for complex or high-value costs disputes
• More formal and time-consuming

Risks and Practical Considerations

1. Under-preparation of costs schedule

Poorly prepared schedules may result in reduced recovery.

2. Failure to serve in time

Late service can lead to adjournment or exclusion of costs.

3. Judicial discretion

The court has wide discretion to reduce claimed costs.

4. Partial recovery risk

Even successful parties rarely recover 100% of costs incurred.

5. Proportionality scrutiny

High hourly rates or excessive time spent may be significantly reduced.

Example Scenario

In a commercial contract dispute, a party successfully obtains an interim injunction after a half-day hearing.

At the end of the hearing:

1. Both parties submit Form N260 costs schedules
2. The judge reviews solicitor and counsel fees
3. The court applies proportionality principles
4. Certain preparation costs are reduced as excessive
5. A summary costs order is made requiring payment within 14 days

This avoids the need for a separate detailed assessment process.

Importance in Commercial Litigation

Summary costs assessment plays a key role in commercial litigation because it:

• Encourages efficiency in interim applications
• Reduces post-hearing procedural disputes
• Provides immediate financial consequences
• Promotes proportionality in legal spending
• Helps manage litigation costs in business disputes

It is particularly significant in high-volume commercial litigation where multiple interim hearings may occur.

Final Thoughts

Summary costs assessment is a fast and efficient mechanism for determining legal costs immediately after a hearing in commercial litigation. It is governed by CPR rules and requires careful preparation of a detailed costs schedule, usually in Form N260.

The court will assess costs based on proportionality, reasonableness, and conduct, and will issue a binding order for payment. While it offers speed and efficiency, parties must ensure accurate and well-supported cost submissions to maximise recovery.