At Greener Costs, we understand the importance of maintaining positive cash flow during the litigation process. One key way to support this is through an interim payment on account of costs – a mechanism that allows the receiving party to recover a portion of their legal costs before the final figure is agreed or assessed.

Interim payments are governed by CPR 44.2, which outlines the court’s general discretion in awarding such payments. This rule provides that, as a general principle, an interim payment should be made where costs have been awarded, even if they are still subject to detailed assessment.

Specifically, CPR 44.2(8) states:

“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 a good reason not to do so”

If the paying party refuses to make an interim payment voluntarily, an application can be made to the Court to secure one. At Greener Costs, we can guide you through this process, helping to draft the necessary documents and present a strong case for a reasonable interim sum.

In a recent case, Patel & Ors v Awan & Anor [2024] EWHC 464 (Ch), the court provides valuable clarity on what happens when a paying party fails to comply with such an order, specifically whether interim costs awards are enforceable in the same manner as other court judgements.

Using a Witness Statement to Support Interim Payments

A key part of making a successful application is providing a well-prepared witness statement. This document should outline the costs incurred to date, reference any existing costs orders, and explain why the requested amount is fair and appropriate. Including a summary of incurred and estimated future costs can assist the Court in determining a reasonable interim figure.

Given that the detailed assessment process can often take months to conclude, an interim payment helps to ensure adequate cash flow in the meantime, particularly important in complex or high-value litigation. The Court will expect clear, supported reasoning behind the sum requested, and a properly structured witness statement can make a significant difference in the outcome.

Background to the Case

In Patel v Awan, the claimants were awarded an interim payment on account of their costs, totalling £118,800, following an order for costs made subject to detailed assessment. The Defendants failed to pay the sum requested within a reasonable period.

In response, the Claimants applied to enforce the interim payment via a charging order and subsequently sought an order for sale of the Defendants’ property to satisfy the unpaid debt.

The Court’s Decision

The High Court firmly held that an interim payment on account of costs is enforceable in the same way as any other money judgment. The Court granted the Claimants a final charging order and allowed the sale of the Defendants’ property to enforce payment.

This ruling reinforces that once an interim payment is ordered under CPR 44.2(8), it becomes immediately payable, regardless of whether a detailed assessment has concluded. The Court rejected the Defendants’ suggestion that payment could be deferred pending assessment, finding no justification for withholding enforcement.

Key Takeaways for Practitioners

• Enforceability: An interim payment order is not conditional on detailed assessment – It is a binding judgment debt, enforceable through standard debt recovery processes.
• Cash Flow Protection: The ruling supports the receiving party’s right to receive timely costs payments to avoid prolonged financial strain.
• Court Discretion: CPR 44.2(8) give the Court broad discretion, but the starting position is that a reasonable sum should be paid unless there is a justifiable cause or strong reason otherwise.

How Can Greener Costs Assist?

Greener Costs is a team of experienced Costs Draftsmen and Costs Lawyers, dedicated to supporting you with all aspects of legal costs. Whether you need assistance preparing a costs budget, bill of costs, negotiating settlements, or representation during detailed assessment proceedings, we’re here to help.

Our team can provide clear guidance on securing interim payments on account of costs, including what you can reasonably expect to recover. We also advise on how to effectively draft settlement terms to maximise your chances of recovering interim payments before the conclusion of detailed assessment proceedings. Early recovery can ease pressure on your cash flow and keep your case moving.

To discuss your matter further, we encourage you to contact us on 01204 263047 or by email at info@greenercosts.co.uk. Alternatively, complete the online enquiry form with a brief summary of your matter and a member of our team will be in touch.