Unpaid Payment on Account of Costs Leads to Sanctions

In the recent case of?(1) Fitzroy Street Capital Inc (2) BMB Avenue Road Limited v (1) Lee Antony Manning (2) Matthew David Smith (3) Barclays Bank Plc,?Barrister Shaman Kapoor was successful in obtaining an?Unless Order, requiring a paying party to comply with a previous?Payment on Account of Costs?Order.

In this case, an Unless Order was granted as a sanction for non-payment of the payment on account of costs.

Unless Orders are made by the Court and provide specific instructions which one party must follow to prevent sanctions, such as the striking out of a claim, from being applied.

Such an Order will usually stipulate the consequences that will apply if the party has not complied with the Unless Order instructions within a specified period of time. Sanctions for non-compliance to the Order will be proportionate to the ordered instructions.

Whilst Mr Kapoor requested a Sanction Order to strike out the?Points of Dispute?in the aforementioned case, the Senior Costs Judge instead granted an Unless Order debarring the Paying Party from participating in the detailed assessment proceedings until the payment on account of costs had been satisfied.

Although the Senior Costs Judge did not agree to strike out the Points of Dispute in this case, they acknowledged that the Court still had the power to do so where it deemed appropriate. This acknowledgement is contrary to some interpretations of the decision made by Langley J. in the case of?Days Healthcare UK Ltd v Pihsiang Machinery Manufacturing Co Ltd and Ors?[2006] EWHC 1444 (QB).

To find out more, the full article can be found on our website.

How can ARC Costs Assist?

ARC Costs are a team of specialist Costs Draftsmen and Costs Lawyers who can assist you in any costs matter, from preparing a?Costs Budget, a?Bill of Costs, negotiating on costs and representing you throughout?detailed assessment proceedings.

As independent experts, we regularly represent Paying and Receiving parties in costs disputes, and we ensure that the best outcome is always achieved for our client.

We can advise you on all costs issues, including in relation to the obtaining/contesting of a payment on account of costs.

We also often advise on how to construct terms of settlement within Tomlin Orders to include appropriate interim costs provisions, or the wording of Part 36 offers to allow for recovery of an interim payment on account of costs. Obtaining an interim payment on account of costs prior to the sometimes-lengthy conclusion of detailed assessment proceedings can be crucial in many cases, and will assist with your cash flow.

We can also advise and assist clients in obtaining Unless Orders and Sanction Orders for non compliance with specific Costs Orders.

Should you wish to discuss your query further, please contact us on?01204 397302?or?[email protected]. Alternatively, you can complete our online query form, and we will contact you to discuss your query further.