Ashman v Thomas [2016] EWHC 1810 (Ch)
Clarifying when an interim payment on account of costs can be ordered by the court
Interim payments on account of costs are, in theory at least, of benefit to both paying and receiving parties. To the receiving party, once a case is won the swift payment of costs, even partially, can be a welcome relief to cash flow. To a paying party, minimising exposure to the arguably punitively high 8% statutory interest can result in considerable savings.
Despite the apparent universal benefit, it is often still left for the receiving party to chase an interim payment from the paying party, sometimes by seeking an order from the court. But when can such an order be made?
CPR 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”.
The question which came before Master Matthews in Ashman v Thomas is whether a request for a payment on account in accordance with CPR 44.2(8) can only be made at the hearing itself. Or whether, as occurred in the case, seeking a provision for an interim when agreeing the terms of the order is acceptable.
Master Williams laid out the general rule as follows:
“The general rule is that an order takes effect from the moment it is made by the court, not when it is entered and sealed by the court office: see Holtby v Hodgson (1890) 24 QBD 103; CPR 40.7. But the court retains power to alter its judgment or order at any time until it is entered and perfected by sealing: Re Barrell Enterprises [1973] 1 WLR 19, CA.”
Master Williams concludes that there is nothing within the rules which alters the application of the general rule outlined above. As such, there is nothing preventing the making of an order for an interim payment when the same is sought after the hearing but before the order is sealed.
Presented with a schedule of costs in the sum of £48,647.70, Master Williams ordered an interim of £17,500.00 be made.
The decision in Ashman v Thomas allows as strong a start as possible in obtaining a quick and meaningful payment on account of costs. Of course it only extends the window for obtaining an interim order until the entitlement order itself is sealed. After that, the next opportunity for obtaining an Order for an interim payment will not present itself until the commencement of the detailed assessment process.
Whether through well timed applications, or what can politely be described as pestering paying parties, at MRN we make every effort to obtain our clients interim payments. Hopefully by doing so, we eliminate one stress in testing times for the profession.