This case concerned an appeal against an earlier decision where the receiving party had sought an interim payment on account of costs during the life of the substantive proceedings. The request was initially refused and the appeal focused on two issues: whether the court had the power to make an interim order as to costs in the circumstances of the case and if so, whether the court should exercise that power.
The case was quite fact specific and concerned a birth injury claim on behalf of a minor. Liability was accepted by the defendant in December 2012, whereupon judgment was entered for the claimant at 90% of damages. A costs order was also made at that stage and an order for an interim payment on account of costs for £100,000. Later in the proceedings, a further voluntary payment was made for £115,000.
The claimant’s solicitor moved firms on two occasions, taking the matter with them each time. The matter was initially with Raleys solicitors, before being transferred to Irwin Mitchell solicitors and then on to Switalskis solicitors. At the time the application was made, Switalskis’ costs alone totalled in the region of £500,000 and out of the previous interims paid, just £50,000 had been allocated to Switalskis. Quantum was yet to be finalised and was not likely to be finalised until 2020, which would be 10 years since the liability decision.
The defendant opposed the application on the grounds that the court had no power to order a further interim payment in respect of quantum costs before quantum had been decided. The claimant’s argument was simply that of cash flow; very few firms would be able to conduct litigation at this level without adequate cash flow and in accordance with CPR 44.2, the court has overall discretion as to which party pays costs and when.
The court agreed with the claimant and allowed the further interim payment sought, for the sum of £150,000.
The case decided a fairly novel set of issues, however the outcome does not appear unduly unfair; cash flow is of course fundamental to any business and where there is no risk of over-payment, interim payments on account of costs can serve to benefit paying parties in the long run as interest on costs will already be stemmed when the final costs order is made.