Legal Cost Specialists

Still nothing better to do?

I mentioned the other day receiving an email from the other side’s costs draftsman on 30th March 2012 reading:

“Please can you provide an update on the current position of our clients cost cheque in relation to this matter? Costs were agreed on 23rd March in the amount of £7,000.00 on 14 day payment terms”.

I suggested the other side did not appear to have anything better to do other than sending premature chase-ups.

Much heated commentary on this post followed as to whether the chase-up was a reasonable step or not, with one wag noting that “the ‘issue’ has certainly prompted a lengthier debate than entity regulation of the costs profession did”.

I have a further postscript to add. On 4th April 2012 I received the following email on the same case:

“Please can you urgently provide the current position on our clients costs cheque.

Costs were agreed on 23rd March in the sum of £7,000.00.

Please note receipt of payment is strictly 14 days from when costs were agreed, on day 15 we would be in the position to issue enforcement proceedings to recover the agreed amount.”

Given there was no costs order, they presumably meant they would be in a position to issue proceedings for breach of contract on day 15.

At this stage I went away to review the papers:

8th March 2012 – Defendant makes offer of £7,000

23rd March 2012 – Claimant says they “confirm costs are now agreed in the sum of £7,000. Settlement in the agreed sum is strictly subject to receipt of the payment in satisfaction within 14 days from the sate of this letter”.

I will confess that I rather lost interest in contract law after week one of my law degree and therefore never really mastered much beyond offer, acceptance, rejection and counter-offer. However, my limited understanding of such matters is that if you purport to accept an offer but then seek to impose a fresh condition upon acceptance, such as:

• Payment is made within a certain timescale, or
• Payment is made in used £10 notes left in a paper bag under a park bench, or
• Payment is hand delivered by Pippa Middleton who will then proceed to smear the fee earner in chocolate sauce before licking it all off,

then you have not actually accepted the offer put forward. You have instead made a counter-offer, and thereby rejected the original offer. In this case, the Claimant’s counter-offer of £7,000 subject to payment being made within 14 days was not accepted. Therefore there was no agreement and no breach of any agreement such as to give rise to the right to “issue enforcement proceedings”.

No doubt an offer to settle costs comes with an implied term that payment will be within a reasonable period and failure to pay within a reasonable period would give rise a claim for breach of contact. Whether failure to pay within 14 days can be taken as amounting to a breach of such an implied term is a moot point however given the facts of this case.

The Defendant’s original offer of £7,000 was made “strictly subject to disclosure of an enforceable CFA covering the claims against the [Defendants]”. To date, there has been no such disclosure.

You couldn’t make it up.

8 thoughts on “Still nothing better to do?”

  1. By this I presume it was a pre November 2005 CFA – if not “you couldnt make it up”

    Its year end – people will chase vehemently whether or not the chasing costs draftsman likes it – instructions are instructions at the end of the day. I would have thought the debate on the previous post encapsulated all that there is to say on this subject

    In terms of payment 14 days is pretty much the norm and is not unreasonable.

  2. Surely, contract point aside, their first “enforcement” step would be to apply for a Costs Certificate under CPR 47.10.

  3. Enforcement varies

    If it is a very large PLC for example they do not like statutory demands as has implications for credit. It also puts their insurer / solicitor in a really bad light as you go behind them and straight to the insured

  4. If there is no order for costs, then I imagine no assessment proceedings exist for a 47.10 application to be made under.

  5. the question is, Simon, why in this day and age are you making conditional offers subject to disclosure of an enforceable CFA?

    what grounds have you for doubting the existence of a CFA?

    what grounds have you for doubting it is enforceable?

    have you fully articulated those grounds in imposing your unreasonable condition? Have you stated openly to the firm concerned, you consider in fact the claim to costs to be a sham as you have such evidence leading to the imposing of such a condition?

    Which itself beggars the question, why did you make an offer at all, if it is the case you have any actual (let alone genuine) ground for questioning existence and enforcability of a CFA?

    Another question. If your client cannot meet its liabilities for agreed costs (as agreed by you as their Agent) within a reasonable period of 14 days, surely there must be a concern as to their solvency, being unable to meet their debts as they fall due?

  6. Pre-November 2005 CFA. (There are other issues but that is a complete answer in itself for the request for disclosure.)

    There has been no agreement as to costs and therefore the issue of being able/unable to pay within 14 days does not even arise.

  7. I presume that all of the above was articulated the first time they chased the chase cheque? I presume that teh first time they chased you confirmed that, as yet, there was no valid contract / agreement

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