If you win your civil litigation case, or indeed are successful on an interim application, you will normally be entitled to an order for legal costs in your favour against the other side. But it may take some time to recover them, which will affect your cashflow. For that reason, it is important to consider requesting a payment on account of costs.

CPR 44.2(8) states: “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 a good reason not to do so.”

Payments on account of costs are of benefit to all parties. For the Receiving Party it enables them to cover some of their overheads and for Paying Parties it reduces interest on costs.

When requesting a payment on account of damages for your client, it is always worth requesting a payment on account of costs at the same time, particularly if liability has been admitted. The worst that can happen is you are met with a no, in which case, an application can always be made. The Court is generally very reasonable when it comes to applications for payments on account of costs and, to steal a well-known catchphrase, “every little helps!”

Interim Costs Orders

There is sometimes confusion as to what costs orders mean within orders issued by the court or agreed by consent.

Here is a quick reference to the most common:

1. Costs in any event -The party in whose favour the order is made will recover their legal costs of the interim hearing from the other side irrespective of who wins at the final hearing.
2. Costs in the case – Whichever side obtains a costs order at the final hearing, will also recover the costs of the interim hearing from the other side.
3. Costs in the application – Whichever side obtains a costs order in the application will also recover the costs of the interim hearing from the other side (this usually applies where the initial hearing is adjourned to a later date).
4. Claimant’s costs in the case/application – If the Claimant is awarded costs at trial, they will also recover the costs of the interim hearing. If the Defendant is awarded costs at trial, the Claimant will not have to pay the costs of the application.
5. Defendant’s costs in the case/application – If the Defendant is awarded costs at trial, they will also recover the costs of the interim hearing. If the Claimant is awarded costs at trial, the Defendant will not have to pay the costs of the application.
6. Costs reserved – The decision about who should pay the costs is deferred to a later date and if not dealt with then “costs in the case” applies.
7. Costs thrown away – This is another version of costs in the application but reflects the fact that one side has caused unnecessary costs to be incurred and should therefore pay them.
8. No order as to costs – If the judge makes this order or is silent on costs then neither party is entitled to recover their costs from the other.
9. Wasted costs – This is a harsher version of costs thrown away, where the Court believes the costs should be paid by the lawyer and not the client. It usually follows a failure to comply with proper or standard procedure by the lawyer. The lawyer may seek to avoid this by making it clear that they will pay the costs without an Order anyway. If the Court is thinking of making a wasted costs Order, then the solicitor or barrister is normally entitled to a hearing on the issue first.
10. Costs of and caused by – This will normally make it clear who has to pay the costs and why. It reflects a party having to pay charges for something they have done or should have done.