What is a default costs certificate?

A Default Costs Certificate is a court-issued document that confirms the amount of costs one party must pay to another, due to the failure of the paying party to dispute or respond to a detailed bill of costs within the prescribed period.

In the process of detailed assessment, the receiving party should serve their bill of costs alongside a Notice of Commencement upon the paying party. The paying party should then serve points of dispute within 21 days of obtaining the receiving party’s bill, further requiring the receiving party to review the points of dispute and reply in order to negotiate a settlement.

If, however, the paying party does not serve points of dispute within 21 days after service of the notice of commencement of detailed assessment proceedings (form N252), the receiving party can make an application for a Default Costs Certificate. This will allow them to recover all costs claimed within their bill of costs.

The Default Costs Certificate acts as an enforceable judgment for the amount of costs stated in the certificate. Interest may accrue on the costs from the date of the certificate.

In the case of Warren v Hill Dickinson [2019] 1 WLUK 182, it was affirmed that an application for an Interim Costs Certificate is not limited to inter partes assessments; it can also be issued in solicitor-client assessments.

Additionally, it was clarified that an application for an Interim Costs Certificate can be submitted before a hearing for Detailed Assessment has been requested, provided that the request is made by the time the application is heard.

Obtaining a default costs certificate for non response

The receiving party must file an application for a default costs certificate if the paying party fails to provide their Points of Dispute within 21 days following the Notice of Commencement. The guidelines for the application for the default costs certificate are set out in paragraph 10 of Practice direction 47:

“(1) A request for the issue of a default costs certificate must be made in Form N254 and must be signed by the receiving party or his legal representative.

(2) The request must be accompanied by a copy of the document giving the right to detailed assessment and must be filed at the appropriate office. (Paragraph 13.3 below identifies the appropriate documents).

10.2 A default costs certificate will be in Form N255.

10.3 Attention is drawn to Rules 40.3 (Drawing up and Filing of Judgments and Orders) and 40.4 (Service of Judgments and Orders) which apply to the preparation and service of a default costs certificate. The receiving party will be treated as having permission to draw up a default costs certificate by virtue of this Practice Direction.

10.4 The issue of a default costs certificate does not prohibit, govern or affect any detailed assessment of the same costs which are payable out of the Community Legal Service Fund or by the Lord Chancellor under Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.”

To obtain a default costs certificate then the N254 form should be filled in and served alongside the document allowing for detailed assessment to take place (either the Order allowing for detailed assessment, a Part 36 Offer and acceptance, or Notice of Discontinuance).

If the receiving party wishes to make an application to obtain a default costs order then they should do so as soon as possible once the 21 days for the paying party to file their Points of Dispute has expired. If the paying party files their Points of Dispute after the 21 days but before you have had chance to make an application to the court for the default costs certificate, then the court may not agree to issue it and accept the late filing of the paying party’s Points of Dispute.

Setting aside the default costs certificate

In some circumstances a paying party may apply to have a default costs certificate set aside, such as if the certificate was issued before the paying party had had the full 21 days to issue their Points of Dispute.

If a paying party wishes to make a case that the costs certificate should be discarded, then they must do so within 14 days of it being granted. Their application to have the certificate set aside should also include an accompanying Points of Dispute detailing a significant reduction in the costs payable with strong reasons to why it should be successful.

Essentially, to make an application to set the default costs certificate aside the paying party must try and prove that there is good reason why the detailed assessment proceedings should continue, meaning the default costs certificate is void.

It is also worth noting that a party must have a strong argument to apply to set the default costs certificate aside, and that won’t include general disorganisation or lack of administrative skills for missing deadlines. Good reasons may include the original Bill of Costs from the receiving party being exceptionally high and unreasonable.

Interim costs certificates

Once the paying party has filed their Points of Dispute within the allocated 21 days, the receiving party may apply to issue an interim costs certificate which orders payments on account of costs by the paying party before the final costs certificate comes through.

Interim costs certificates can be issued at any point following filing a request for a Detailed Assessment Hearing.

Enforcement of a Default Costs Certificate

When a DCC is obtained, it operates as an enforceable court order. If the paying party does not comply with the judgment, the receiving party can take enforcement actions, including writs of execution, attachment of earnings orders, or other enforcement mechanisms under civil procedure law. This ensures that the receiving party is not left in limbo and can recover the legal costs incurred without further hindrances.

The ability to enforce a Default Costs Certificate adds significant weight to the process and ensures that the receiving party can pursue compensation with minimal resistance from the paying party, thereby maintaining the balance of fairness within the legal costs assessment system.

How Greener Costs can assist

Our team of Costs Lawyers and Costs Draftsmen have many years of experience surrounding costs, including default costs certificates. We are able to assist clients from all backgrounds on a range of cases, whether you are the paying party of receiving party. We can help your case from the start of your dispute and can see it through all the way to representation at detailed assessment hearings and high court cases.

With our extensive knowledge of the civil justice system and our highly skilled team of Costs Draftsmen, we can provide law costing services to clients throughout England and Wales. We are also proud to be represented on Your Legal Advisor’s panel of costs experts.

Greener Costs is the UK’s first net positive legal costs company, and our aim is to assist your law farm in costs services whilst also helping you become more carbon neutral. Our operations are fully paperless, and we commit to planting 25 trees per instruction. At the end of the year, we will send you a report detailing how much of your emissions have been offset by instructing our team.

If you wish to speak to a member of the team here at Greener Costs then please contact us at 01204 263047, info@greenercosts.co.uk or use the online form on our website below.