Losing party that claimed payment on account would stifle appeal loses bid for stay

The High Court has rejected an application to stay an order for payment on account of costs from an unsuccessful claimant who argued that he would not be able to pursue an appeal without one.

Hincks v Sense Network Ltd (Costs) [2018] EWHC 1241 (QB) followed a liability-only trial in March about an unfavourable reference where judgment was given in favour of the defendant.

As payment on account of costs, the claimant offered 90% of the defendant’s budgeted incurred and future costs as approved by Master Kay QC, meaning £159,108. The defendant sought a further £19,500, representing 65% of the costs incurred in excess of its budget.

The claimant also objected in principle to the order for payment on account of costs unless the execution of the order was stayed pending appeal, arguing that the effect of the interim costs payment would be to stifle an appeal.

CPR 52.16, which outlines when the court should order a stay of any order or decision, states that an appeal shall not operate as a stay of any order or decision of the lower court. Mrs Justice Lambert said it was clear that, in considering an application for a stay, “the court has a broad discretion to make an order which best accords with the interests of justice taking into account all of the circumstances”.

The claimant did not put forward any new evidence, simply referring the judge to what she learned of his financial predicament during the course of the trial.

Lambert J said she had gone back through the pleadings and found no evidence to support the assertion that the effect of such an order would be to stifle his appeal.

“I bear in mind that a mere assertion that such an order would stifle an appeal is insufficient. The claimant must (per Goldtrail) establish his position on the balance of probabilities. [The claimant’s counsel] is inviting me to infer from the wider circumstances of the case and the exiguous evidence at trial, that the claimant is impoverished to the extent that he would be unable to pursue his appeal if required to fund an interim payment. I do not find that such an inference can properly be drawn in the evidential vacuum in which this application is made.

“I also note [that counsel’s] submissions do not positively assert that the effect of a payment on account of costs will frustrate an appeal; only that the ‘claimant’s modest means’ ‘would likely mean that an appeal cannot be pursued’.”

The judge said there was also no evidence that, in the event of an appeal failing, the claimant would be able to discharge his liability in costs to the defendant, or that, in the event of an appeal succeeding, there was a concern that the defendant would not be able to repay costs paid on account.

“For all of these reasons, I do not grant the claimant’s application. It is not in the interests of justice to do so. I take no account of the prospects or otherwise of the claimant being successful on appeal. It not necessary for me to do so in order to determine the application.”

The defendant sought the extra £19,500 on the ground that, at detailed assessment, the costs judge would have good reason to exceed the budgeted figure on the grounds of the trial overrunning and the additional work which its counsel undertook in order to provide the judge with comprehensive written submissions.

Noting the claimant’s submission that the costs claimed in respect of the closing submissions was “a high figure”, Lambert J said she was not prepared at this stage to accept that the costs judge would find good reason and ordered the claimant to pay the £159,108.

Paul Strelitz (instructed by Blake Morgan) represented the claimant, and Richard Samuel (instructed by Reynolds Porter Chamberlain) the defendant only. 

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Costs News
Published date
14 Jun 2018

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