Assessment
37.The Defendants have failed to comply with an order to make an interim payment in respect of costs.38.That order was itself somewhat unusual in the context of IPEC proceedings where orders for costs of interim hearings are very much the exception rather than the rule. As the IPEC guide explains: “Costs of the case management conference or any other interim hearing will almost always be reserved to the conclusion of the trial (Part 63 rule 26(1))”. The order was for an interim payment only given that the costs position could not be fully resolved until after the trial; an undertaking to repay some or all of the costs awarded was offered by the Claimants to reflect that fact.39.Had the costs position remained as it was before the Claimants’ application for an interim payment, the Claimants would have had no prospect of recovering any payment in respect of costs until after the trial. The order made at the second CMC is unusual in that it gives the Claimants the right to a sum of money on an interim basis. The Claimants have not sought to enforce the order.40.The Court has at its disposal various options to ensure that litigation is dealt with in accordance with the overriding objective and that its orders are complied with. Here, the Claimants asked the Court to order that, unless the outstanding costs are paid, the proceedings may be stayed or struck out. Of course, this possibility arises only where proceedings are continuing. It is therefore very rare for such an order to be made in respect of non-payment of interim costs in IPEC, as such costs are only exceptionally ordered.41.The imposition of a sanction for non-payment of a costs order involves the exercise of a discretion, pursuant to the inherent jurisdiction of the Court. The underlying principles were summarised by Sir Richard Field (sitting as a deputy judge of the High Court) in Michael Wilson & Partners v Sinclair [2017] EWHC 2424 (Comm) at 29 as follows:“(1)The imposition of a sanction for non-payment of a costs order involves the exercise of a discretion pursuant to the court’s inherent jurisdiction.(2)The court should keep carefully in mind the policy behind the imposition of costs orders made payable within a specified period of time before the end of the litigation, namely, that they serve to discourage irresponsible interlocutory applications or resistance to successful interlocutory applications.(3)Consideration must be given to all the relevant circumstances including: (a) the potential applicability of Article 6 ECHR; (b) the availability of alternative means of enforcing the costs order through the different mechanisms of execution; (c) whether the court making the costs order did so notwithstanding a submission that it was inappropriate to make a costs order payable before the conclusion of the proceedings in question; and where no such submission was made whether it ought to have been made or there is no good reason for it not having been made.(4)A submission by the party in default that he lacks the means to pay and that therefore a debarring order would be a denial of justice and/or in breach of Article 6 of ECHR should be supported by detailed, cogent and proper evidence which gives full and frank disclosure of the witness’s financial position including his or her prospects of raising the necessary funds where his or her cash resources are insufficient to meet the liability.(5)Where the defaulting party appears to have no or markedly insufficient assets in the jurisdiction and has not adduced proper and sufficient evidence of impecuniosity, the court ought generally to require payment of the costs order as the price for being allowed to continue to contest the proceedings unless there are strong reasons for not so ordering.(6)If the court decides that a debarring order should be made, the order ought to be an ‘unless’ order except where there are strong reasons for imposing an immediate order.”42.Each of factors (2) to (5) is considered in turn below. As an unless order has been applied for, factor (6) requires no further comment.