Liability for costs of Detailed Assessment proceedings where a settlement offer has been rejected and the outcome of Detailed Assessment is only marginally better than the offer.

This appeal related to the decision of a Costs Master who ordered the Appellant, who won the litigation, to pay the costs of the detailed assessment proceedings. The Appellant had rejected the Respondent’s reasonable costs offer, but had then beaten the offer by only a small margin at detailed assessment.

The Appellant had won the underlying proceedings and served a bill of costs on the Respondent who made an offer of approximately £85,000. The Appellant declined the offer and requested a detailed assessment from a Costs Master. After an additional year of litigation and a five-day hearing the master assessed costs at only £1,176 more than the Respondent’s offer and ordered that the Appellant would be liable for costs of the detailed assessment from the date the offer was rejected. The Respondent appealed.

The issue for consideration was whether the master had been wrong in his application of Carver v BAA Plc [2008], which dealt with the assessment of costs after a rejected Part 36 offer was beaten by only £51. On appeal, Judge Cooke QC held that, unlike Part 36, there was no regime built into CPR 47.18 which governed the costs of detailed assessment; rather an overall assessment of the circumstances was necessary

CPR 47.18 required the Master to exercise two discretions and in doing so he had taken into account, as required under CPR 47.19, the fact that an offer had been made. It was held that the Master had undoubtedly been entitled to consider the fact that the offer had been reasonable and would have brought matters to an end, saving vast additional costs. The Master had merely considered Carver by analogy when considering the impact of the Appellant’s rejection of a reasonable offer and had not treated the case as requiring him to come to a particular conclusion.

It was held that the Master had therefore correctly exercised his discretion and the appeal was dismissed.