Here at Partners in Costs we seek to work in tandem with your business, appreciating its needs and workings from both a commercial and legal standpoint. In particular, we never underestimate the importance of our clients’ cash flow. We understand how important interim payments are in that regard and we endeavour to obtain a satisfactory interim payment whenever possible. Indeed, the importance of interim payments to law firms in the post-downturn era cannot be overstated. The recent case of Travers v Poole Hospital NHS Foundation Trust has again thrown the importance of interim payments into the legal headlines.
Travers concerned a low value medical negligence claim which settled for £1,500.00 plus reasonable costs in October 2015. A bill in the sum of £14,164.00 was duly prepared and informally served, however not agreement could be reached. The Claimant therefore made an application for an interim payment. At Liverpool County Court, District Judge Baldwin found in favour of the Claimant and ordered a payment in the sum of £7,780.00.
The Claimant relied on the new wording at CPR 44.2 (8) which is unequivocal:
“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 Defendant appears to have sought to rely on a narrow application of the CPR, arguing that an interim payment may only be ordered (via an interim costs certificate) upon a party filing a request for detailed assessment. The District Judge did not agree.
CPR 44.2(8) gives a judge wide discretion as to the making of orders for interim payments. Indeed, the intention behind the change of the wording of that part of the CPR ([the Court] may order… has been changed to [the Court] WILL order…) was to make the presumption in favour of the making of interim payments.
Indeed, whilst Travers may not be the most ground breaking case of recent times, it does at least serve as a timely reminder that the Jackson reforms were in part intended to promote a more collaborative approach to civil litigation. The unwillingness of Defendants to engage with Claimants has again been highlighted through the prism of the issue of interim payments.
The Travers case has served to make clear that with the new wording within the CPR, the burden of proof concerning interim payments has shifted from the Claimant (formerly having to prove the reasonability of their request for an interim payment) to the Defendant having to prove they have good reason to not make an interim payment. In the vast majority of cases, we suspect there will not be one.
As a final practice point, we suggest that upon settling the substantive case, solicitors should make it a condition of their Order that the Defendant makes an interim payment. In this way the wrangling with the Defendant can be avoided entirely.