Page 4 - Inside Law Magazine Issue 11 - Summer 2015
P. 4

Healthy cash flow is imperative to              At present, there is no guidance as what is a  If Part 8 proceedings are issued, again a
          any business and therefore the        “good reason not to do so”, however, Jacob     Payment on Account can be requested at
          increase to Court Fees that took      J in Mars UK Limited v Teknowledge No. 2       this juncture. We are finding it increasingly
 place on 1st April 2015, (where the Court      [1999] 2 Costs LR 44, stated that “where       common when Part 8 proceedings are
 Issue Fee for a case with damages of more      a party has won and has got an Order for       issued, that if we request a Payment on
 than £200,000.00 increased to £10,000),        Costs, the only reason that he does not get    Account to be contained within the Part 8
 came as a body blow to the partners of         the money straight away is because of the      Costs Order, these are being made on the
 many claimant solicitors firms throughout      need for Detailed Assessment.                  basis of the Courts following the provisions of
 England and Wales.                                                                            CPR 44.2 (8) in that they have then ordered
                                                Nobody knows how much it should be.            a party to pay costs and consider there is
 Accordingly, ensuring that cash inflow is                                                     no good reason not to order a Payment
 maximised to provide a counterbalance          If the Detailed Assessment were carried out    on Account.
 to the extra burden on cash outflow, is        instantly, he would get the Order instantly.
 becoming of paramount importance. One          So, the successful party is entitled to the    An Interim Costs Certificate can also be
 way of improving cash inflow for claimant      money. In principle, he ought to get it as     made under CPR 47.16. However, going
 solicitors, is by obtaining a Payment on       soon as possible. It does not seem to me       down this route can cause inordinate delay
 Account of costs from the Defendant as         to be a good reason for keeping him out        as the receiving party will have requested
 quickly as possible at the conclusion of a     of some of his costs but you need time to      an Application for a Detailed Assessment
 matter.                                        work out the total amount.                     Hearing. Substantial Detailed Assessment
                                                                                               costs will have been incurred at that stage.
 Defendants are often reluctant to make         A payment of some lesser amount which
 voluntary payments on account, either          he will almost certainly collect is a closer   The Application should be drafted in Form
 when damages are settled or when the Bill      approximation to justice”.                     N244 and if applying for either a Payment
 of Costs is served. This article therefore     Whilst Jacob J applied the old CPR 44.3        on Account or an Interim Costs Certificate,
 gives some advice as to how payments on        (8), with the Court being asked to make a      the distinction needs to made clear. The
 account can be obtained.                       Payment on Account at the end of Trial, it     Application should be kept simple and the
                                                still gives some good reasoning as to why      Order should seek a monetary figure in
 There is a distinction between a Payment on    payments on account should be made.            terms of the Payment on Account, the day
 Account and an Interim Costs Certificate. A                                                   on which the Payment on Account should
 Payment on Account is applied for pursuant     The paying party may seek to argue that        be payable and of course seek costs of the
 to CPR 44.2 (8) and an Interim Costs           CPR 44.2 (8) does not apply to acceptance      Application.
 Certificate is applied for pursuant to CPR     of Part 36 Offers as the Court has not
 47.16. The latter can only be applied for      “ordered” a party to pay costs subject to      This therefore leads to the final question:
 once the matter has been set down for a        Detailed Assessment.
 Detailed or Provisional Assessment Hearing.                                                   How much should the Payment on
                                                There is of course a deemed Order pursuant     Account or Interim Costs Certificate,
 A Payment on Account can be applied for at     to CPR 44.9 (1) (b) in that acceptance of      be for?
 the end of a Trial (if the Claimant has been   the Part 36 Offer results in an automatic      The latter is far more straightforward as
 successful), at any time after damages have    stay of the claim on the terms of the offer,   when replying to the Points of Dispute, you
 been agreed (for example, in a Consent         and the stay does not affect the Court’s       will be able to work out the minimum value
 Order) or after obtaining an Order for costs   power to enforce the terms of the offer or     of the Points of Dispute and know what the
 following damages being agreed. CPR 44.2       deal with the question of costs. It should     Bill will assess at in the unlikely event that
 (8) states “where the Court orders a party to  also be pointed out that there is no deemed    the paying party succeeds with each and
 pay costs, subject to Detailed Assessment,     Order if the Part 36 Offer is accepted before  every entry of their Points of Dispute.
 it will order that party to pay a reasonable   substantive (Part 7) proceedings have been
 sum on account of costs, unless there is a     issued and in this situation, Part 8 “Costs    In the alternative, a paying party must make
 good reason not to do so”. This is obviously   only” proceedings must be issued.              an open offer with the Points of Dispute
 a subjective approach in that the receiving                                                   pursuant to CPD 8.3, and it is recommended
 party will always assume that there is a                                                      that this level of the payment should be
 good reason to do so.                                                                         requested.

4 Inside Law Issue 11 | SUMMER 2015
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