Once a claim has successfully concluded, the receiving party is usually entitled to their costs and expenses.
Costs are only summarily assessed on the day if it is an interim hearing or the trial is one day or less. For all other cases, the costs must be determined by detailed assessment if they are not agreed upon. Because detailed assessment can entail a lengthy wait, an application for an interim payment on account of costs is possible and recommended. An interim payment can help to protect cash flow if the costs are contested. Contested costs inevitably cause delays, sometimes for years.
The Civil Procedure Rules (CPR) 44.2(8) sets out general rules on costs and gives the Court discretion on whether an interim payment is justified, how much should be paid and when.
If the costs assessment is detailed, the rules state that an order will be made for a reasonable sum of costs to be paid. The timing of an application for interim payment is crucial and is usually made at the point of judgment.
Once the detailed assessment process has begun, the next opportunity to apply for an interim payment will require applying for an Interim Costs Certificate. Common law dictates that an amount of 50% on account of costs is reasonable, but the court may award a substantially higher percentage.