Interim Payments on Account - Show me the money!

“Show me the money!”, the immortal words of Cuba Gooding Jr. speaking to his agent Tom Cruise in Jerry Maguire are just as relevant to solicitors practices the length and breadth of the country.

Once a case has finished solicitors just want to be paid as soon as possible. With the detailed assessment process often taking far longer than envisaged under the CPR, what are the options to assist cash flow? A good negotiator can always assist in recovering an interim payment as paying parties often wish to reduce interest accruing, but what if this is not possible?

If proceedings have been issued and the matter is to be finalised by the Court the fastest way to obtain an interim payment is to ensure it is made part of the order: Civil Procedure Rule 44.2(8) provides: “Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so”. This is entirely unambiguous – it states “will”, not should or may. It is for receiving parties to ensure the court is assisted in this process by providing N260’s when matters proceed to trial or when they believe such an order could be obtained. The failure to do so could well be seen as a “good reason not to do so”.

But what of claims settled without any order of the court such as claims settled pre-issue. If costs cannot be agreed then when issuing Part 8 proceedings to seek an authority for assessment, CPR 44.2 (8) applies: “where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so”. This is supported by the decision of Regional Costs Judge Baldwin sitting in Liverpool County Court in the case of Travers v Poole Hospital NHS Foundation Trust.

If those opportunities aren’t utilised, the next formal opportunity to obtain a payment on account is when the matter is set down for assessment in accordance with CPR47.16 (1) (a): “The Court may at any time after the receiving party has filed a request for a detailed assessment hearing – issue an interim costs certificate for such sum as it considers appropriate”.

You will note the use of the word “may” in the rule. The Court is not required to issue an interim costs certificate and often declines to do so contending that the matter is nearly concluded given the matter has been set down for assessment. However, the anecdotal evidence is that even once the matter is set down for assessment, whether provisional or detailed, the turn around of six weeks for the matter to be heard is not being met. In cases which are being provisionally assessed and then require figures agreed and possibly an oral hearing thereafter it can be up to five months after set down before costs are paid, a considerable time for a receiving party to have to wait.

All in all, it is recommended that an interim payment is sought at conclusion of the main action in the order agreeing settlement, or when Part 8 is issued. Otherwise you will be at the mercy of “may”!


Written by David Burke - Costs Draftsman

 

 

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