Quids in. Getting money in the kitty the easy way

Quids in.  Getting money in the kitty the easy way

David Cooper recounts an ideal costs scenario

It is often said that we are not just ‘lawyers’ but also businesspeople. It is essential for the business to have good cash flow, which can be difficult when you are acting under a conditional fee agreement, legal expense insurance or other funding arrangement where you cannot obtain regular payments from the client.

When a case concludes, and an order for costs is made against the losing party, CPR 44.2(8) envisages an order for payment of a reasonable sum on account of costs being made unless there is good reason not to do so.

In multi-track cases, there is likely to have been a costs management order under CPR 3.15, so both parties will be aware of the potential amount of costs. Where there has not been an order or costs are being summarily assessed, it is essential that details of costs is available to the trial judge and the losing party so that proper consideration can be given to the question of a payment on account.

There may be circumstances where the question of a payment on account of costs has not been dealt with at trial and a request will need to be made as soon as possible thereafter. In Ashman v Thomas [2016] EWHC 1810 (Ch), Master Matthews clarified the time when an interim payment on account of costs could be sought.

In that case although no request for an interim payment was made at the hearing, the parties were required to draw up the order and, as a consequence of the court’s ability to alter a judgment or order at any time until it is perfected by the court seal (Re Barrel Enterprises [1973] 1WLR 19, CA), he was entitled to consider the written representations and to make an order for payment on account of costs.

Whether or not there is an order for payment on account, the receiving party may be tempted to delay commencing detailed assessment proceedings until close to the deadline imposed by CPR 47.7 in order to benefit from entitlement to interest at the judgment rate of 8% per annum from the date of the order for costs.

The paying party will know this and should volunteer payment on account. It is often the case, however, that pressure upon the paying party in having to deal with detailed assessment of the costs may produce a swifter and higher return in relation to the claim presented.

The requirement for using the electronic bill of costs seems certain to be effective from 6 April 2018. Whoever is tasked with preparing the bill should do it as soon as possible after the issue of the order for costs.

After commencing detailed assessment proceedings, if an order for interim payment has not been made, you should consider applying for an interim costs certificate pursuant to CPR 47.16. This allows the court to issue an interim certificate at any time after the receiving party has filed a request for detailed assessment hearing.

The ideal scenario therefore is: (1) obtain the order for costs with provision for payment on account; (2) consider preparing the bill and commencing assessment proceedings as soon as possible; (3) in the event that points of dispute are served, make immediate arrangements to request detailed assessment (or provisional assessment) and at the same time seek the interim certificate; and (4) pending the detailed assessment hearing (given there is always a risk of delay with listing), explore, with vigour, settlement.

Hopefully the result will be a quicker end of the case and recovery of those costs, leading to closing the file and money in the kitty.

David Cooper is a Chartered Legal Executive and Costs Lawyer. He is a partner at Peterborough law firm Taylor Rose TTKW, and a member of the council of the Association of Costs Lawyers

This article first appeared in New Law Journal in November 2017

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07 Nov 2017

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