The saying “Cash is King” is well known, and a steady cash flow is always a priority for every business. During the Covid 19 lockdown businesses have folded because their cash flow was badly disrupted, and more may sadly follow before things return to ‘normal’.
Cash has never been so important, and we have seen various measures introduced by the Government to try and help with the situation. At Paramount Legal Costs, we deal with legal costs and therefore Solicitors’ money on a daily basis, and understand the importance of this within the legal sector.
In the Litigation Department, we routinely request interim payments on behalf of Solicitor clients when serving Bills of Costs. If a reasonable settlement proposal cannot be agreed we then rely on the Courts to list the matter for an assessment hearing in a timely manner, which in some cases has been slowed down during the current situation. Requesting a voluntary interim payment on account of costs is a good way for clients to maintain cash flow, as seen in Mars UK Limited v Teknowledge Limited [2008]. Usually, interim payments are requested at the conclusion of the case, CPR 44.2(8) “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 good reason not to do so”, but it is also possible during a case as highlighted in I v Hull and East Yorkshire Hospitals NHS Trust [2019] and this is a key decision to assist with cash flow during a case.
Clients query the level of payment they may reasonably request on account, and our costs budgeting procedure helps quantify the amount. In Thomas Pink Limited v Victoria’s Secret UK Limited [2014] 90% of the budgeted costs were awarded, and a similar percentage was awarded in Cleveland Bridge UK Limited v Sarens (UK) Limited [2018], where 90% of budgeted costs were ordered, plus a reasonable sum for the incurred costs (70% in this instance).
We endeavour to cost our clients’ files in a timely manner so that we can begin the costs recovery process, maintaining our high professional standards throughout. We actively chase paying parties for offers and deal with negotiations promptly, both with the client and opponent. When a settlement is reached, we promote the payment by BACS so that the payment is made and received quickly. This way, we get the best results for our clients within as short a time as possible.
Should you wish to discuss any of this or see how we can help your firm, then please contact me.
Tom Brocklebank, Costs Lawyer & Head of Litigation
Direct Dial: 01228 815394
Email: [email protected]