Is a party who is awarded its costs of an interlocutory appeal entitled to an immediate assessment of those costs? This question was addressed by the Court of Appeal in Khaira v Shergill  EWCA Civ 1687 in which the Court held that a party who is awarded its costs of an interlocutory appeal is entitled to apply to the appeal court for immediate assessment, rather than waiting until the end of the underlying proceedings. However, if the appeal court does not make such an order, an assessment cannot take place until the end of the overall proceedings.
This case involved a dispute as to the trusteeship and governance of two Sikh Gurdwaras. The Court of Appeal held that the issues were not justiciable and struck out the claim, but it was reinstated by the Supreme Court, which ruled that all issues in the case should go to trial. The Supreme Court ordered the Defendants to pay the Claimants’ costs in the Supreme Court and Court of Appeal, and ordered a payment of £150,000 on account of costs.
The Claimants commenced detailed assessment of their costs of the strike-out application. Under Rule 48(1) of the Supreme Court Rules, the Claimants were entitled to an immediate assessment of their Supreme Court costs without any separate order to that effect. However, the Defendants sought to have the notice set aside in relation to the Court of Appeal costs, but the Defendants’ application was dismissed. The Defendants then appealed.
The issues on appeal were whether the Claimants were entitled to an immediate assessment of the costs in the Court of Appeal without an order to that effect and, if not, whether the costs judge had jurisdiction to make such an order.
The Court of Appeal looked at CPR 47.1 and Practice Direction 47 which apply to assessment of costs at first instance and in the Court of Appeal. After careful consideration of the word “proceedings” in Paragraph 1.1 of Practice Direction 47, the Court concluded that CPR 47.1 meant that the Claimants were entitled to an immediate assessment of their costs, but only if the Court makes such an order.
The Court of Appeal also held that if the appeal court did not order an immediate assessment, such an order could not be made by the costs judge.
Therefore, if you want your costs assessed immediately after an interlocutory appeal, make sure you apply to the appeal court for such an order; otherwise you will have to wait.
This post was written by Paven Munder. For further information, please contact:
Neil Warner, legal director, Commercial Dispute Resolution
T: 0121 234 0097