Part 8 costs only proceedings arise where the substantive dispute has settled before proceedings are issued, but the parties have not agreed the costs of the claim. In these circumstances, there is no existing order dealing with costs, and no procedural mechanism to commence a detailed assessment unless the court is asked to intervene.

Where a matter settles pre-action, costs can only be negotiated on an informal basis. Even where a Part 36 offer has been accepted, providing an entitlement to costs, this does not of itself create an assessment instrument capable of triggering detailed assessment. In the absence of agreement, the only route to formal assessment is to issue Part 8 costs only proceedings for the purpose of obtaining an order that the costs be assessed.

Issuing Part 8 costs only proceedings allows an order to be made for the costs to be assessed and enables the receiving party to serve a Notice of Commencement, bringing the costs dispute within the CPR costs regime.

Since the expansion of the fixed recoverable costs regime on 1st October 2023, practitioners must also be alert to the fact that issuing Part 8 costs only proceedings may now engage fixed recoverable costs for the purposes of assessment. Where proceedings are issued after 1st October 2023, the court may treat the Part 8 claim as proceedings for the purpose of applying the post-October 2023 FRC regime, subject to the relevant transitional provisions. This can have a significant impact on recoverability, even where the underlying dispute settled pre-action.

Nature of Part 8 Costs Only Proceedings

Part 8 costs only proceedings are materially different from Part 7 proceedings. They are used where there is no substantial dispute of fact. The paying party accepts that costs are payable; the dispute concerns quantum only.

The court is therefore not concerned with liability, but with dealing with the costs of the application in a proportionate and efficient manner. This makes Part 8 the appropriate procedural route where costs entitlement is agreed or established, but the amount recoverable has not been resolved. This applies whether the underlying claim would have been allocated to the multi-track or would otherwise have fallen within fixed recoverable costs.

How to Issue Part 8 Costs Only Proceedings

Either party may commence Part 8 costs only proceedings by issuing a Part 8 Claim Form (Form N208). Issuing Part 8 costs only proceedings is permissible where proceedings are issued solely to resolve the question of costs following settlement.

Proceedings must be issued in the same court that would have dealt with the substantive claim had proceedings been required. The claim form must include a completed Statement of Truth, payment of the applicable court fee, and the evidence relied upon to support the claim for costs.

The evidence will usually comprise the offer and acceptance, which resolved the underlying application or matter, demonstrating that the settlement provided for costs to be paid in addition. This is particularly important where the settlement does not arise from an automatic costs provision, such as acceptance of a Part 36 offer.

Once proceedings are issued, the court will consider whether to make an order dealing with the costs and directing that they be assessed.

What Happens After a Costs Order Is Made

Where the court orders that costs be assessed, the receiving party may serve a Bill of Costs together with a Notice of Commencement (Form N252). This formally begins the detailed assessment process and the assessment of costs payable.

The paying party then has 21 days from service of the N252 to serve Points of Dispute. If the paying party fails to do so within the time fixed, the receiving party may apply for a Default Costs Certificate in respect of the sum claimed for costs. This operates in a similar way to default judgment in Part 7 proceedings.

If Points of Dispute are served in time, the receiving party must serve Replies. At this stage, parties are expected to engage constructively in negotiations, particularly where there are substantial grounds for disputing individual items or the overall level of costs claimed.

Provisional and Detailed Assessment

If agreement cannot be reached, either party may request provisional assessment of costs. The court will consider the Bill of Costs, Points of Dispute and Replies on paper and summarily assess the costs of a receiving party without a hearing.

Where the assessment of costs payable exceeds £75,000, or where the court considers it appropriate, the matter will proceed to an attended detailed assessment hearing. This involves the preparation of a full bundle and oral submissions on the disputed items.

If either party shows substantial grounds for disputing the provisional outcome, they may request an oral hearing to review the assessment.

Practical Considerations and Costs Risk

Part 8 costs only proceedings should not be issued as a default step. Courts expect parties to attempt to resolve costs disputes without litigation and may take a critical view of unnecessary proceedings, particularly where the costs of the application are disproportionate to the sums in issue.

Careful consideration should be given to:

• whether the dispute is suitable for summary assessment of costs
• whether fixed recoverable costs apply under the October 2023 fixed recoverable costs regime
• the effect of the transitional provisions following the 1st October 2023 expansion of the FRC regime
• whether the matter falls within or outside the fixed recoverable costs regime
• the costs of a receiving party in pursuing formal assessment
• the risk that the paying party shows substantial grounds for disputing the sum claimed

In practical terms, the expanded FRC regime means that, in some cases, the assessment of costs payable may be constrained by fixed costs tables rather than a full time-based detailed assessment. This is a developing area of costs practice and one that requires careful analysis when advising whether issuing Part 8 costs only proceedings is proportionate.

Greener Costs

Greener Costs regularly works on costs only proceedings arising from pre-action settlement, including matters affected by the expanded fixed recoverable costs regime introduced in October 2023. Our experience includes disputes both within and outside the FRC regime, including cases that would otherwise have been allocated to the multi-track.

We assist clients in assessing whether issuing Part 8 costs only proceedings is appropriate, advising on procedural and costs risk, and managing the detailed assessment process once an order has been made. Our focus is on ensuring that costs disputes are resolved efficiently, proportionately, and in line with current judicial expectations under the CPR.

For further discussion or case-specific queries, the Greener Costs team can be contacted on 01204 263047 or via info@greenercosts.co.uk.