The Dekagram: 20th November 2023

We were interested to see this week that Vos MR has publicly accepted the recommendations of the Civil Justice Council’s costs review; and where better to start than in increasing guideline hourly rates? The current rates, which date from 2021, will be uplifted on 1^st January 2024 to take account of the not insubstantial inflation in the services producer price index which has occurred since they were introduced. In April next year fixed recoverable costs under the new regime will also be uprated. The CJC’s suggested costs budgeting pilots will also be actioned, and there will be a further ‘generational’ review of the provisions of the Solicitors Act 1974. The Lord Chancellor believes that the new FRC regime will enhance access to justice by ‘providing clarity and transparency’, thus controlling costs outlay in advance. He did not comment on the fact that these arguments cannot possibly be said to apply in personal injury cases.

Payments on Account of Costs: Can you have Two Bites at the Cherry?

In Trotman v Master Brickwork London Essex Limited [2023] EWHC 2791 (KB) Master McCloud considered whether a court may order more than one interim payment on account of costs pursuant to the provisions of CPR Part 44.2(8), which reads:

“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.”

The Claimant had sustained grave injuries at work when he fell through a skylight. The Defendant denied liability, but settled out of court on the basis of a 60/40 split between primary liability and contributory negligence, and that liability settlement was approved by a judge.

At the approval hearing, an issue arose as to the level of any interim payment on account of costs. The Defendant offered what amounted to £65,000 (taking into account previous costs orders). The Claimant accepted that as an interim payment whilst making it clear that he reserved the right to seek a further payment on account. The settlement order directed that the Claimant’s costs be assessed if not agreed; the total sum of reasonable costs in respect of the Claimant’s liability costs was not agreed and the matter therefore proceeded to assessment.

On 7^th February 2023 the Claimant applied for a further interim payment on account of costs in the sum of £215,000. On 22^nd March 2023 he served a detailed bill of costs in the sum of approximately £400,000.

On consideration of the Claimant’s application for a further payment on account the Defendant contended that the court’s jurisdiction under CPR44.2(8) was limited to making a single order for a single payment before detailed assessment proceedings had been commenced; the word ‘where’  in the provision fell to be interpreted as if it were the word ‘when’. If this were right, by consenting to the original payment of £65,000, he had already accepted that that sum was ‘a reasonable sum’ in accordance with the rules, and his application was an unacceptable second bite at the cherry. The Claimant contended that the language of the provision did not limit the court to making only one interim order and that his application was a perfectly permissible one.

Master McCloud reviewed the authorities provided to her by the parties and concluded that there is no binding authority directly on point, although it was clear that courts do in fact make multiple orders for payments on account of costs (and, for what it is worth, this is the author’s experience too). In order to resolve the issue she therefore returned to the underlying rationale underpinning the provision:

“Early payment of costs which will inevitably be due serves the ends for example of limiting the scope for overly protracted assessment later, enables a party not to be kept out of their money, and reducing later applications for Interim Costs Certificates once detailed assessment has been commenced.

Those strong policy considerations still retain their force where a second or later application is made. Moreover, if we consider the wording of the rule, it states ” where a court orders “. It does not state ” when a court orders ” and nor does it (as it might have) state that only one such order may be made for an interim payment on account of costs. The use of “where” in my judgment connotes a state of affairs rather than an event. In that sense the expression ” where a court orders “, together with the established case law construing the rule so as to permit applications after the date of the original order (or deemed order) for assessment means ” where a court is making, has made, or is deemed to have made an order ” for costs to be subject to detailed assessment.”

She therefore acceded to the Claimant’s submission that the court has jurisdiction under CPR44.2(8) to make more than one payment on account of costs.

Comment

With respect to Master McCloud and to the arguments raised by the Defendant, this conclusion must, it is suggested, be right. Whether one interprets the provision purposively or literally, there is nothing to suggest that a claimant should be limited to one payment on account. All of the policy considerations which led to the adoption of the provision point to the court having jurisdiction to make more than one such order; and the plain wording of the rule does not fetter its discretion in the way suggested by the Defendant. Nonetheless, it is always useful to have judicial clarification on such matters, if only to close down any argument to the contrary in negotiation.

About the Author

Called to the Bar in 1997, Sarah Prager has been listed in the legal directories as a Band 1 practitioner in travel law for many years. Together with her colleagues at Deka Chambers, Matthew Chapman KC, Jack Harding, Dominique Smith, Tom Yarrow and Henk Soede, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She undertakes purely domestic high value personal injury work as well as cross border work and has a wealth of experience of difficult and sensitive cases. She was appointed a KC in March 2023.