Failure to get a Bill of Costs right can lead to heavy reductions

Introduction

The recovery of costs after a successful claim cannot be left as an after-thought. It is incredibly important to ensure that you have a Bill of Costs prepared by a Cost Lawyer or an experienced Costs Draftsperson to ensure that all of your hard work undertaken does not end up unrewarded.

Costs rules are technical and require a level of understanding and application to ensure that a compliant Bill of Costs is prepared and which does not contain fundamental mistakes. Failure to provide a compliant and accurate Bill of Costs can ultimately lead to sanctions in respect of the costs which are recovered.  

The Background to Hyder v Aidat-Sarran & Anor [2025] EWHC 3686 (SCCO)

In this matter the Court had to deal with two distinct points. Firstly, the Receiving Party had made an application for a relief from sanctions for the late service of the Bill of Costs. In this case there was an unless order requiring a Bill of Costs to be served upon the Paying Party by a certain date.  

A Bill of Costs was prepared and served upon the Paying Party one day late. However, the Paying Party argued that the Bill of Costs served was seriously defective and, as such, it was submitted that the service of such a defective Bill did not comply with the terms of the unless order.  

The second point related to the Paying Party seeking to strike out the claim for costs under CPR 44.11 due to the numerous errors contained within the original Bill of Costs which was served and a subsequent Bill of Costs. CPR 44.11 provides the Court a discretion to disallow all or part of the costs which are being assessed as a result of a failure to comply with the rules, practice direction or an Order and that the conduct of the party is found to be unreasonable or improper.

Whilst not set out in the judgment of Deputy Costs Judge Roy KC, the Cost Lawyer representing the Paying Party, Simon Gibbs, has set out the numerous defects which were identified and raised in Points of Dispute in his own blog. The Defects included but were not limited to:  

• Failing to prepare the original Bill of Costs in electronic format,  

• failing to distinguish the phases for the work carried out when there was a costs management order in place,  

• failing to provide details of the fee earners who had carried out the work,  

• including costs which had already been subject to summary assessment,  

• including costs which related to Orders where ‘no order as to costs’ had been made and,  

• failing to include a signed certificate confirming that the indemnity principle had not been breached.  

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The Costs Decisions

The Deputy Cost Judge considered the first point and, following a brief consideration of authorities, came to the conclusion that the terms of the unless order were not specific enough to require the service of a ‘compliant’ Bill of Costs, and simply required the service of a Bill of Costs. As such, and following a finding that the breach of one day was not serious or significant pursuant to the Denton principles, relief from sanctions was granted.  

The Deputy Costs Judge then turned to the second point and considered the numerous defects which had been identified by the Paying Party and which had not been rectified by the Receiving Party. The Cost Judge considered that both limbs of CPR 44.11 had been met in that there had been clear non-compliance with the rules and that the conduct was certainly unreasonable and verging on improper. The Deputy Cost Judge concluded by stating that he found that there had been ‘multiple compound breaches. They have been serious. They have been persistent. They are unexplained, and they are inexcusable for the most part’.  

When considering the level of sanction to apply the Deputy Cost Judge noted that to strike out the claim for costs would be too draconian, however, he considered that a severe sanction was warranted. He proceeded to make an Order for a 75% reduction to whatever the costs would be subsequently assessed at.  

Takeaway Points

Failing to ensure that a compliant and accurate Bill of Costs is prepared and served can lead to significant costs sanctions which means that either you or your client will be left significantly out of pocket. As such, the preparation of a Bill of Costs cannot be neglected at the end of a claim if you want to recover the costs that you have incurred. Furthermore, the responsibility remains with the conducting solicitor and any errors or mistakes cannot be laid at the door of an unregulated costs draftsperson in accordance with the decision of Gempride.  

Therefore, if you would like regulated and authorised Costs Lawyers and experienced Costs Draftspeople to ensure that your Bills of Costs are prepared in a compliant and accurate fashion Peak Costs are willing to help. You can contact the author of this article, Kris Kilsby, here.

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