16 Interim Payments and Security for Costs PDF

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Combination of lecture notes and personal notes. Contains all the information needed for the BPTC Civil paper 2020/21....

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16 Interim Payments and Security for Costs • interim payments • security for costs Interim Payments Definition (CPR 25.1(1)(k)) A payment (applied for by the Claimant) on account of damages, debt or other sum (except costs) which a Defendant may be liable to pay. Conditions to be satisfied (CPR 25.7) Claimant make a request from the Defendant first. If disagree, then apply under 25.7. Only if any of the following conditions:  Defendant admits liability to damages;  Claimant has obtained judgment for damages to be assessed; or  It is satisfied that if it goes to trial, the Defendant will be liable for substantial damages. Procedure in CPR 25.6 General rules  Apply anytime (including pre-action) EXCEPT before the end of the period to file acknowledgement of service (i.e. 14 days after deemed date of service of Claim Form) (CPR 25.6(1)). 

14 days only applies for interim payments and summary judgments. Others are usually 3 days.

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Can make more than one application.

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Applicant/respondent. FILE Application notice Draft order Evidence (25B PD 2.1) Court fees ↓ APPLICANT SERVE (14 days before hearing)  Application notice  Evidence  Draft order  Hearing date ↓    

RESPONDENT FILE + SERVE IN REPLY (7 days before hearing)  Written evidence in reply ↓ APPLICANT FILE + SERVE IN REPLY (3 days before hearing)  Written evidence in reply ↓ BOTH PARTIES STATEMENT OF COSTS (CPR 44 PD 9.5) (24 hours before hearing) ↓ ORDER The court must not make an interim payment of more than a reasonable proportion of the likely final judgment. Contributory negligence, set-offs and counterclaims are considered.

Evidence (1) (2) (3) (4) (5) (6) (7)

sum of money sought the items or matters of the interim payment sought, the sum of money for final judgment is likely to be given, the reasons for believing conditions in rule 25.7 are satisfied, any other relevant matters, in claims for personal injuries, details of special damages and past and future loss, and in a claim under the Fatal Accidents Act 1976, details of the person(s) on whose behalf the claim is made and the nature of the claim.

Powers of the Court (1) Order all or part of the interim payment to be returned (2) Vary or discharge the order (3) Order the defendant who made the interim payment to be reimbursed by another defendant. If the final amount is less than the interim payment, the court can order interest to be paid to the Defendant from the date of the interim payment. Disclosure of interim payment The fact that the Defendant made an interim payment (voluntary or otherwise) shall not be made known to the trial judge unless the Defendant agrees. Disclosure only AFTER the following have been decided:  Liability  Quantum Side note: If there is an existing counterclaim, it may be an issue if that leads to a set-off defence as it will affect the quantum

Security for Costs General rules Applied by the Defendant. If Defendant is concerned that the Claimant does not have enough funds to pay for the Defendant’s costs. Only made within proceedings (not in pre-action) Relations solely to costs, not damages. Can be used against  Claimant  Defendant in a counterclaim, by the Claimant.  Defendant in a Part 20 Additional claim, by the third party. Test for security for costs CPR 25.13(1)(a) & (b) 1. it is satisfied, having regard to all the circumstances of the case. that it is just to make such an order;  Lord Denning: Bona fide claim; good prospect of success; security for costs used oppressively (stifles the claim); claim was brought about by the Defendant; made at a late stage; etc)  The Courts must be careful not to impair the Claimants right of access to justice (Article 6 ECHR – right to a fair trial)  Balance between impairment of the claimants right of access and the injustice against the Defendant if no security provided AND 2. One of the following is satisfied (a) an enactment permits the court to require security for costs. (b) The Claimant is resident out of the jurisdiction (but not in Brussels, among others)  Individual: habitual or normal residence  Company: Where central management or control is exercised. Not necessarily where incorporated. (c) the claimant is a company or other body and there is reason to believe that it will be unable to pay if ordered to do so;

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Defendant must show o the Company’s inability to pay costs o the likely costs Must show the Company will be unable to pay costs o At the time of the application, but can consider the future. o D can show ‘reason to believe’ Claimant company will be unable to pay.

(d) the claimant has changed his address since the claim was commenced with a view to evading the consequences of the litigation;

(e) the claimant failed to give/gave incorrect his address in the claim form; (f) the claimant is acting as a nominal claimant, other than as a representative claimant under Part 19, and there is reason to believe that he will be unable to pay the defendant’s costs if ordered to do so;

(g) the claimant has taken steps in relation to his assets that would make it difficult to enforce an order for costs against him.

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E.g. dissipation of assets, transfer of assets overseas. No need to show intent.

CPR 1 1. Whether such an order would deal with the case justly; and 2. Whether it is at proportionate cost. Situations  Unlikely to consider wealth of def (or even if D is indemnified)  Will consider any admissions but WILL Not consider offers to settle by D  No examination of detailed merits unless clearly show high degree of success/failure Power of Court CPR 25.12(3) The Court will decide the amount of security considering  The likely costs;  Whether security for the whole action or part of it;  Past and future costs;  Possibility of settling soon;  Others. E.g. delay thus less future cost. The onus is on the Claimant (respondent) to show that he should not pay for security. Manner of payment can be by  Payment into Court;  Payment to the Defendant’s solicitor;  A bank guarantee; or  An undertaking to pay costs. Timing of payment can be  Immediately  By a certain date  In parts (maybe indicated by steps in the procedure) Procedure Same as any other interim application.

Except:  

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Application notice should state the grounds or enactment that applies Application MUST be supported by written evidence 25.12(2). Usually by witness statement covering: o The ground o Likely costs o Factors for courts to exercise discretion o Amount of security requested Application made ANYTIME except pre-action. However, should be made without delay....