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Payment on account of costs
Payment on account of costs
Next, I consider the question of a payment on account of costs. CPR rule 44.2(8) provides that:
"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".
In Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm), Christopher Clarke LJ said:
It is clear that the question, at any rate now, is what is a 'reasonable sum on account of costs'…
What is a reasonable amount will depend on the circumstances, the chief of which is that there will, by definition, have been no detailed assessment and thus an element of uncertainty, the extent of which may differ widely from case to case as to what will be allowed on detailed assessment. Any sum will have to be an estimate. A reasonable sum would often be one that was an estimate of the likely level of recovery subject, as the costs claimants accept, to an appropriate margin to allow for error in the estimation. This can be done by taking the lowest figure in a likely range or making a deduction from a single estimated figure or perhaps from the lowest figure in the range if the range itself is not very broad."
The total of the respondents’ statement of costs for the appeal was £77,663.91 (including VAT), compared with £67,046.34 (including VAT) for Julian’s. The respondents ask for 60% of their figure, rounded down to £46,000, and payable in 14 days. Julian submitted that it was “inappropriate to rely on the Respondents’ costs schedules”, because they were “inflated and disproportionate”. He commented that appellants’ costs were always greater than respondents’. As he put it, “Responding to an appeal is sitting in the box seat – simply saying the judge below was correct”. The respondents say that they had to spend “time and resources to unpick the sheer volume of mis-directions of fact and law that [Julian] has advanced”.
I cannot resolve this dispute summarily. That must be left to detailed assessment. I have to decide whether to order a payment on account and, if so, in what sum. As to the former question, the rule requires me to make such an order “unless there is good reason not to do so”. So, the burden lies on Julian to persuade me not to. His submissions really go to quantum rather than to the principle, although he does say that where a costs schedule is inflated or disproportionate it would be inappropriate to order a payment on account. I disagree that there is any automatic connection. In the present case I am not satisfied that there is a good reason not to order a payment on account.
As to quantum, there are a number of points that I must bear in mind. One is that the rates sought by the respondents exceed the guideline rates, and will therefore need to be justified. Another is that there are questions raised about some of the specific work charged for by the respondents’ solicitors, and about possible duplication of effort (which can only be resolved on detailed assessment). As Julian says, DJ Wales himself expressed some concerns about the respondents’ costs below. I think I should be cautious, but not over-cautious. I will therefore order Julian to pay a sum equal to 50% of the £77,663.91, that is £38,832 (to the nearest pound) within 14 days.