Source: https://www.pic.legal/court-has-no-power-to-order-costs-on-account-after-part-36-acceptance/
Timestamp: 2020-05-30 07:30:37
Document Index: 199146924

Matched Legal Cases: ['art 36', 'art 36', 'art 36', 'art 36', 'art 44', 'art 36', 'art 36']

Court has no power to order costs on account after Part 36 acceptance – PIC
Court has no power to order costs on account after Part 36 acceptance
Mark Balme, Senior Costs Consultant
Part 36 is regarded as the Jewel in the Crown of CPR, and the discerning eye of the judiciary says it is perfect, but a successful party might now hold it in slightly less value than previously.
The question posed to Mr. Justice Birrs on appeal re Finnegan v Frank Spiers (t/a Frank Spiers Licensed Conveyancers) [2018] EWHC 3064 (Ch) was “whether the court has power to order a payment on account of costs in a situation in which a Part 36 offer has been accepted under rule 36.13 and so by rule 44.9(1) it is deemed that a costs order has been made on the standard basis. The payment on account provision in the CPR is rule 44.2(8).”
CPR Rule 36.13
Cases where costs orders deemed to be made
CPR Part 44.9
(b) rule 36.13(1) or (2) (claimant’s entitlement to costs where a Part 36 offer is accepted)
I conclude from that analysis that it is not straightforward to reason from the relationship between one trigger of the deemed costs order and the terms of rule 44.9(1) to the relationship between another different trigger and that rule.
Looking at rule 44.2(8) as a matter of language, it does have the temporal quality identified by the respondent. It provides that “where” the court makes an order for costs “it will” order a payment on account of a reasonable amount unless there is good reason not to.
It remains to be seen whether someone else picks up this particular gauntlet, but the judgment appears clear and unambiguous and is bad news for anyone with pending applications for payments on account in circumstances, strictly as described above. Otherwise, and in all other respects where the Court makes an order for costs, then applications should not present any difficulty.
I however say this cautiously and can envisage a paying party perhaps trying to say, that for example the Court does not make an order for costs in the context of a Tomlin Order, instead such an Order is merely an endorsement of terms agreed between the parties. That being the case, it always was, and remains, best practice to include provision for a payment on account.
Notwithstanding the above, and if you envisage requirement for a payment on account, then a Tomlin Order with provision should provide the facility, although it is extremely likely that the additional associated cost and Court fee would not be recoverable from the Paying Party.
Wherever a claim is concluded at Trial, or judgment entered, then requests/applications should be made to the Court for payments on account of costs. In my experience, payments on account are less messy than separately dealing with liability costs under a forthwith order for costs.
Mischievously, I am waiting for someone to take the next step, and apply for a further payment on account, in addition to what might have been previously ordered when say judgment was entered, based on further spend in the context of an approved Budget, on the completion of further work, albeit provided the Defendant has not made a Part 36 offer.
Otherwise, with interest at 8% you would think the paying party would be keen to make an early payment on account, but for whatever reason, that is not always the case.
The other way of looking at the situation, is that 8% interest on costs is generous, and the amount thereof, especially on substantial costs is undeniably lucrative.
It is therefore the case, in the circumstances of a deemed costs order, that the receiving party is forced to wait until costs negotiation becomes deadlocked, and then when requesting Detailed Assessment, at the same time apply for an Interim Costs Certificate (if the paying party is refusing to make a payment on account). The below provisions of CPR are self – explanatory.
(1) The court may at any time after the receiving party has filed a request for a detailed assessment hearing
in detailed assessment proceedings pursuant to an order under section 194(3) of the 2007 Act, the receiving party must send a copy of the interim costs certificate or the order amending or cancelling the interim costs certificate to the prescribed charity.
If you would like to contact Mark about this article or if you would like a training session to cover this or any other costs related issue please click here.
Mark Balme – Senior Costs Consultant