Default Costs Certificate –
How to Obtain and Apply
What is a default costs certificate?
A default costs certificate is a document requested and issued by a receiving party which orders the paying party to pay the full amount of costs the receiving party has outlined in their Bill of Costs.
Once a case has come to its conclusion and there has been a ruling in which party is unsuccessful (and therefore liable to cover the costs of the successful party) the receiving party drafts a Bill of Costs detailing how much they expect to be paid to cover their costs, alongside a Notice of Commencement (Form N252). The completion of such documents then commences the detailed assessment process of costs.
Once a receiving party has issued the N252, the paying party must serve their Points of Dispute within 21 days, under CPR 47.9.
If a paying party fails to file their Points of Dispute within the allocated time frame, then a receiving party is able to apply for a default costs certificate (form N254), which enables them to be awarded all of the costs they had requested in their Bill of Costs, without the need for a detailed assessment hearing for a costs order.
Obtaining a default costs certificate
The receiving party can make 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. Practice direction 47 paragraph 10 states the guidelines on the application for the default costs certificate:
“(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 can apply and request 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 enough reason for the detailed assessment process to 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 for 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.
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.
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