In IXM v Norfolk & Norwich University Hospitals NHS Foundation Trust the Court ordered for an interim payment on account of costs where liability had been determined but quantum remained unresolved; albeit the amount was less than the Claimant had requested due to uncertainties in the sum claimed.

Summary

The Claimant suffered a brain injury at birth. The Defendant accepted liability, but quantum remained in dispute. It is/was a complex and difficult case with an estimated value of over £10 million.

With liability resolved, the Claimant applied for an interim payment on account of costs. The Defendant accepted that the Court should order an assessment of the Claimant’s costs up to the beginning of the month in which the application was heard and that a payment on account should be made. However, the amount of the payment on account was disputed – the Claimant requested £500,000, whereas the Defendant submitted that £250,000 was reasonable.

The Defendant’s proposed figure was based on the assertion that:

1. The Bill of Costs produced was not in the form required for a detailed assessment
2. The number of hours claimed appeared to be high.
3. The rates claimed, for London rather than local solicitors, were above guideline figures.

On hearing the application, the Court confirmed that that a party seeking an interim payment on account of costs had to provide all the relevant information so the Court could take the factors in CPR 44.2(4) into account – these include:

1. The type of funding agreement and any payments made under it.
2. Whether any Part 36 offer had been made.
3. Any payments on account made to date.
4. A realistic valuation of the likely damages to be awarded at trial.
5. A realistic estimate of the quantum costs incurred to the date of the application.
6. Any other factor relevant to the final incidence of costs.
7. Arguments over rates or relevant conduct.
8. The likely date of trial or trial window.

It was held that there was a high degree of uncertainty in respect of the overall amount claimed and the component parts (including the amount of time), and so the Court accepted the Defendant’s position that £250,000 was the reasonable amount.

If you are considering an application for a payment on account of costs, or have just received one, and require advice/assistance, please contact A&M Bacon Ltd who would be happy to help.