Legal Cost Specialists

Posts made in July, 2020

Date from which interest on costs runs

By on Jul 17, 2020 | 0 comments

I have already written about the case of Marbrow v Sharpes Garden Services Ltd [2020] EWHC B26 (Costs) (10 July 2020) where the Senior Costs Judge Master Gordon-Saker declined the Claimant’s invitation to award pre-judgment interest on costs. He also declined my invitation, on behalf of the Defendant paying party, to only allow interest from 3 months after the date of the order for costs. This was the approach adopted by Leggatt J. (as he then was) in the High Court decision of Involnert Management Inc v Aprilgrange Limited & Ors [2015] EWHC 2834 (Comm) at paragraph 24: “it seems to me that a reasonable objective benchmark to take is the period prescribed by the rules of court for commencing detailed assessment proceedings. Pursuant to CPR 47.7, where an order is made for payment of costs which are to be the subject of a detailed assessment if not agreed, the time by which detailed assessment proceedings must be commenced (unless otherwise agreed or ordered) is three months after the date of the costs order. In order to commence such proceedings, the receiving party must serve on the paying party a bill of costs giving particulars of the costs claimed. It is then for the paying party to decide which items in the bill of costs it wishes to dispute. Postponing the date from which Judgments Act interest begins to run by three months will therefore generally serve to ensure that the party liable for costs has received the information needed to make a realistic assessment of the amount of its liability before it begins to incur interest at the rate applicable to judgment debts for failing to pay that amount.” It is clear from this passage that he was attempting to set out a general principle as to the date from which interest should run, as opposed to the decision being based on the particulars of the case.  This decision is heavily criticised in Cook on Costs 2020 (at 32.5). The Master summarised the law as being: “The entitlement to interest on costs under section 17 of the 1838 Act is automatic. Generally the court will not order it expressly. Interest is therefore payable on costs at 8 per cent from the...

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White Paper’s Costs Litigation Conference 2020

By on Jul 14, 2020 | 1 comment

White Paper’s always excellent annual costs conference did not proceed as normal this year for obvious reasons. However, the full conference with the full array of speakers proceeded as a pre-recorded webinar event. This is still available to view online here (until 29 July 2020) for a very modest £204 plus...

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Recovery of interest paid on disbursement funding loan

By on Jul 13, 2020 | 4 comments

Last week in Marbrow v Sharpes Garden Services Ltd [2020] EWHC B26 (Costs) (10 July 2020) the Senior Costs Judge Master Gordon-Saker handed down a reserved judgment in relation to three discreet issues where I acted for the Defendant paying party. None of the issues were novel, but they are ones that have continued to trouble the lower courts, which was no doubt part of the reason for the reserved judgment. The issue I will deal with today is the decision relating to whether the interest paid on a disbursement funding loan was recoverable as an item of cost or, alternatively, by way of allowing interest to run from an earlier period. The Claimant claimed, as an item of costs, the interest payable under a loan agreement with his solicitors in relation to the funding of disbursements. The agreed interest rate was 5%. The Claimant relied on the decision of the Court of Appeal in Secretary of State for Energy v Jones [2014] EWCA Civ 363 as authority that such an item was recoverable as an item of costs.  The Master rejected that on the basis the Court in that case was concerned with the rate of interest that could be allowed on costs from a date earlier than judgment where, as here, the claimants had incurred a liability to pay interest to their solicitors in respect of the funding of disbursements. In Hunt v RM Douglas (Roofing) Ltd [1987] 11 WLUK 221 the claimant sought to recover on the taxation of his costs the interest that he had incurred under an overdraft to fund the disbursements required for his claim.  The Court of Appeal held that funding costs had never been included in the categories of expense recoverable as costs and to include them would constitute an unwarranted extension. The Master held that it was clear following Hunt that interest incurred under a disbursement funding loan cannot be recoverable as costs and so disallowed the item within the bill. However, the Master then considered CPR 44.2(6)(g), which does allow the court to order the payment of interest on costs from a date before judgment.  He distinguished Jones on the basis it was a different case to the present:...

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