A five-hour delay in serving a costs document should not automatically deprive a successful claimant of fixed recoverable costs, the County Court has held. The decision clarifies that CPR 45.63(2) does not create an automatic sanction for late service of a Precedent U and that courts should assess the practical prejudice caused by a procedural default.
What was the dispute?
In Ashi Group Limited v Peter Daniels & Anor [2026] EWCC 68, HHJ Michael Berkley considered an appeal by Ashi Group Limited, formerly Anglian Windows Limited, against an order made by District Judge CJ Taylor on 18 December 2025.
Ashi Group had succeeded at trial on both of its breach of contract claims, which concerned the defendants’ refusal to pay invoices. The trial judge found there was no proper basis for withholding payment. However, the claimant was refused fixed recoverable costs because its completed Precedent U had been filed and served approximately 19 hours before trial, rather than at least 24 hours beforehand as required by CPR 45.63(2).
The claimant’s oral application for relief from sanctions was also refused. The result was that it lost its fixed recoverable costs and the enhanced consequences associated with the defendants’ failure to accept a Part 36 offer that the claimant had beaten at judgment.
Why were fixed costs refused at trial?
The District Judge considered the 24-hour requirement to be clear and treated the late service as a reason not to allow the claimant to recover the costs set out in Precedent U. The judge placed particular emphasis on the need for the defendants, who were litigants in person, to have clear notice of the amount of costs they might face if they lost.
The claimant had argued that the document could not be completed accurately until the case had been assigned to a complexity band. That had not happened until the trial hearing, when the District Judge allocated the matter to band 3. The claimant also submitted that the costs were fixed and could be ascertained from the relevant rules, and that the five-hour difference had not affected the defendants’ decision to proceed to trial.
On appeal, the claimant challenged the approach on several grounds, including that the District Judge had relied on irrelevant considerations, failed to account for the absence of an earlier band allocation and imposed a disproportionate consequence for a short delay.
Does CPR 45.63 impose a sanction?
The central legal question was whether CPR 45.63(2) imposes an express or implied sanction capable of engaging CPR 3.9. That rule applies where a sanction has been imposed for failure to comply with a rule, practice direction or court order.
HHJ Berkley explained that procedural defaults can fall into three categories: those carrying an express sanction, those carrying an implied sanction, and those carrying no sanction, which are instead dealt with through the court’s ordinary case management powers. The judgment referred to the Court of Appeal’s guidance in FXF v English Karate Federation Ltd [2023] EWCA Civ 891 and Yesss (A) Electrical Ltd v Martin Warren [2024] EWCA Civ 14.
CPR 45.63(2) says that a party intending to recover fixed recoverable costs must file and serve a completed Precedent U no later than 24 hours before the hearing. However, it does not say that fixed costs cease to be recoverable if the document is late, that permission is required to rely on it, or that relief from sanctions must be obtained.
Following the reasoning in Macdonald v Taree Holdings Ltd [2001] 1 Costs LR 147 and the later authorities, HHJ Berkley concluded that CPR 45.63 creates a procedural obligation, not an implied sanction. CPR 3.9 therefore did not apply to the breach.
How should late costs documents be treated?
The judgment stressed that the absence of an automatic sanction does not mean procedural deadlines can be ignored. Mandatory provisions in rules and practice directions must still be followed. The question is how the court should respond when they are not.
Drawing on Macdonald, the court said that the first question should be whether the failure caused prejudice to the other party. If there is no prejudice, the court should proceed to assess costs in the normal way. If prejudice has been caused, the response should be proportionate and may include a short adjournment or a later assessment.
“The court should take that into account but its reaction should be proportionate.”
— The approach adopted from Macdonald v Taree Holdings Ltd
The court distinguished a mere failure to comply from a default accompanied by aggravating factors. A deliberate attempt to prevent the other party from receiving advance notice, or a history of delay, could justify a more serious response. Neither was present here.
Why was the appeal allowed?
HHJ Berkley found that the District Judge had made an error of law by treating the breach as one requiring relief from sanctions under CPR 3.9. The District Judge had therefore approached the issue on the wrong legal footing.
The appeal judge also accepted that the decision to proceed to trial had, in practical terms, already been made by the time the 24-hour deadline had passed. The fixed-costs framework meant the defendants could ascertain their potential costs exposure from the rules and the claim documentation. The five-hour delay was not realistically capable of changing their decision to attend trial.
The court further found that the case had not been assigned to a complexity band before trial. That made it impossible for the claimant to serve a reliable, correctly banded Precedent U in good time. Although the claimant could have prepared alternative versions, doing so might have caused further confusion for the defendants, who were litigants in person.
In assessing prejudice, HHJ Berkley noted that the defendants had not lost the opportunity to challenge the amount of costs, including issues of reasonableness, proportionality, hourly rates and hours worked. No meaningful prejudice had been identified. The only practical benefit to the defendants from refusing costs would have been avoiding the obligation to pay them altogether.
What costs were awarded?
Having allowed the appeal, HHJ Berkley declined to remit the matter to another District Judge. A further hearing would have caused additional cost, delay and use of court resources. Instead, he exercised the court’s discretion afresh.
The delay was treated as a “mere” failure, without aggravating factors. The judge concluded that depriving Ashi Group of £18,850.47 for a relatively small delay, which caused the defendants no identifiable prejudice, would be out of all proportion. The court therefore assessed the costs in the normal way using the Precedent U and taking account of any Part 36 offers. That assessment was reflected in the order already made.
The appeal was allowed.
Frequently asked questions
What is Precedent U?
Precedent U is the costs document referred to in CPR 45.63. A party seeking fixed recoverable costs must file and serve a completed version no later than 24 hours before the hearing.
Does late service of Precedent U automatically prevent recovery of fixed costs?
No. In this judgment, the court held that CPR 45.63(2) creates a procedural obligation but does not itself impose an express or implied sanction that automatically removes the entitlement to fixed recoverable costs.
Why did CPR 3.9 not apply?
CPR 3.9 applies where a rule, practice direction or court order imposes a sanction for non-compliance. HHJ Berkley found that CPR 45.63(2) contains no such sanction.
What should a court consider when a costs document is served late?
The court should consider whether the delay caused actual prejudice and respond proportionately. A short delay without aggravating factors does not necessarily justify depriving an otherwise successful party of its costs.
How much did the court assess as recoverable costs?
HHJ Berkley assessed the claimant’s recoverable costs at £18,850.47 and allowed the appeal against the refusal to award fixed recoverable costs.