Interim Costs Payments
In Benyatov -v- Credit Suisse Securities (Europe) Ltd  EWHC 682 (QB), Roger ter Haar QC, sitting as Deputy High Court Judge, granted the Claimant’s application for a payment on account of costs under CPR 44.2(8) in relation to a costs order in their favour regarding several interim applications that would be subject to detailed assessment.
This was a high value commercial dispute in which the Defendant made several applications:
- To strike out or for summary judgment,
- For a conditional order for the Claimant to pay £1.15m into Court, and
- For security of costs in the sum of £1.15m.
The Defendant succeeded to a significant degree in striking out parts of the claim but also failed to a significant degree in the other applications. The Defendant was ordered to pay one third of the Claimant’s costs. The Claimant applied for an order for interim costs. Given that substantial parts of the Particulars of Claim had been struck out, the Court ordered the Claimant to pay the Defendant’s costs.
The Defendant did not seek an interim payment in respect of their own costs, but opposed the Claimant’s application on several grounds:
- Costs orders in both directions,
- Possibility of a further costs order in the Defendant’s favour,
- The Defendant seeking permission to appeal, and
- Prospect of subsequently recovering costs.
The starting point was CPR rule 44.2(8) ‘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.’ The Judge dismissed the first point as a reason not to order an interim payment as it would undermine the effect of 44.2 (8) to allow a party to bring into account contingent and uncertain entitlements as to costs to defeat an otherwise sure entitlement of the other party to an interim payment. Further submissions were also refused with the Court considering it wrong to deny the Claimant his entitlement to a payment on account of costs because a future costs order might be made against him. The appeal was relevant to a limited degree. The time for payment would not start to run until the application had been determined. Finally, the Judge did not accept on the facts that the Claimant might not be able to repay any costs if required.
In conclusion, the Judge was not satisfied that there was any good reason for not making an order for an interim payment. Summary assessment was considered inappropriate due to both the ‘difficult exercise’ to undertake in relation to those of the Defendant’s costs and the significant amount sought by the Claimant. He ‘did not feel comfortable’ in contemplating costs in excess of £120k on a 100% basis. On that basis, the Defendant was ordered to pay one third of that sum, namely £40k.
This case outlined several crucial issues with the most important being that an order for costs will mean an order for interim costs.
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