Legal Cost Specialists

interest

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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