CPR 44.11: when the court penalises misconduct in costs

CPR 44.11 applies where a party or their legal representative, in connection with a summary or detailed assessment, fails to comply with a rule, practice direction or court order, or where it appears that their conduct before or during the proceedings, or in the assessment itself, was unreasonable or improper.

In those circumstances the court may disallow all or part of the costs being assessed, or order the party at fault or their representative to pay costs that the misconduct caused another party to incur. Where the court makes an order against a legal representative who is not present, the representative must tell their client in writing within seven days.

The leading authority is Gempride Ltd v Bamrah [2018] EWCA Civ 1367. A bill of costs had been certified as accurate when it was not, and points of dispute had been met with misleading replies. The Court of Appeal confirmed that the court can reduce costs under CPR 44.11 in a way that is proportionate to the misconduct, and that a bill signed in breach of the duty of candour can lead to a substantial reduction.

The case is a reminder that the certificates at the end of a bill matter. Before signing, the receiving party’s solicitor must check the retainer, the rates claimed and the indemnity principle position, and must be confident that the bill does not claim more than the client is liable to pay.

Applications under CPR 44.11 also arise where a party ignores directions in assessment proceedings, serves papers late without explanation, fails to file documents for a hearing, or conducts the assessment in a way that unnecessarily increases costs. Misleading statements about funding or the existence of a retainer can also fall within the rule.

The conduct does not have to be dishonest. Unreasonable conduct is enough, although the court will distinguish genuine error from conduct that is careless or deliberately misleading, and will set the sanction accordingly.

The power is discretionary and the court aims for a proportionate response. It may disallow a percentage of the bill, disallow particular items, refuse interest, or order the defaulting party to pay the costs of a wasted hearing. In serious cases, such as a bill knowingly inflated, the reduction can be very significant.

CPR 44.11 sits alongside other powers. Wasted costs orders against representatives fall under section 51 of the Senior Courts Act 1981 and CPR 46.8, and the court can also take conduct into account under CPR 44.2 and 44.4 when deciding reasonableness and proportionality.

For paying parties, a CPR 44.11 argument should be specific: identify the rule, order or certificate breached, the evidence, and the consequence that is proportionate. Points of dispute that simply allege misconduct without detail tend to weaken a challenge.

For receiving parties, the best answer is usually prompt correction. Where an error is spotted, serve an amended bill with an explanation before the hearing, rather than waiting for the paying party or the court to find it.