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//Payment on Account of Costs Pending Taxation

Payment on Account of Costs Pending Taxation

Given the long delays experienced in the taxation of costs the President of the High Court, Mr. Justice Peter Kelly has issued a Practice Direction HC71, which comes into effect on the 24th of April 2017. The Direction provides that an order directing the payment of a reasonable sum on account of costs pending the taxation of such costs may be made in all cases where there is no dispute as to the liability for the payment of costs and in any other case which a Judge thinks appropriate.

In obtaining such an order, the Solicitor for the successful party must provide an Undertaking that in the event of the taxation realising a smaller sum than that directed to be paid on account, the overpayment will be repaid.

The text of the Practice Direction reads as follows:-

“In view of the long delays in the taxation of costs, the attention of practitioners is drawn to the provisions of Order 99, rule 1(B)(5).

I direct that in all cases where there is no dispute as to the liability for the payment of costs and in any other case which a judge thinks appropriate, an Order may be made directing payment of a reasonable sum on account of costs within such period as may be specified by the judge pending the taxation of such costs. Such orders may be made on an undertaking being given by the Solicitor for the successful party that, in the event of taxation realising a smaller sum than that directed to be paid on account, such over-payment will be repaid.

This Practice Direction shall come into effect on Monday, 24th of April 2017.

Dated 28th of March, 2017.

Peter Kelly,
President of the High Court”

The introduction of this Practice Direction, means insurers, when considering reserves and timings regarding payments out in respect of a claim, will need to take into account a potential payment being ordered under the said Direction within what will be presumably a relatively short time frame from the resolution of a claim.

From a practical perspective, this Practice Direction should assist in a more focused approach being adopted in resolving costs following litigation which should in turn hopefully expedite the time taken to finalise a claim.

2017-05-03T12:14:05+00:00May 3rd, 2017|Publications|

About the Author:

Fiona Manning is a Senior Associate Solicitor in our litigation department and joined the firm in 1996. She specialises in commercial litigation and dispute resolution, insurance defence litigation and professional […]

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