Obtaining a Default Costs Certificate
Have you failed to receive Points of Dispute from the other side? Find out how you can recover your costs in full by obtaining a Default Costs Certificate.
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What is a Default Costs Certificate?
When a case has settled, the successful receiving party should serve their Bill of Costs alongside a Notice of Commencement (Form N252) upon the unsuccessful paying party, commencing detailed assessment.
The next step for the paying party is to serve their Points of Dispute within 21 days of service of the Notice of Commencement, under CPR 47.9.
If there is a failure on the paying party’s side in serving Points of Dispute within the required time frames, the receiving party should apply for a Default Costs Certificate (Form N254), which allows them to be awarded costs in full without having to apply for a Detailed Assessment Hearing to obtain a costs order.
The Default Costs Certificate brings an end to the Detailed Assessment process and orders the paying party to pay the full amount of costs listed in the receiving party’s Bill of Costs.
How to Obtain a Detailed Costs Certificate
If a paying party fails to serve their Points of Dispute within 21 days, the receiving party should make an application to the Court for a Default Costs Certificate. Practice Direction 47, Paragraph 10 sets out the procedure for making an application for this certificate and states:
“(1) A request for the issue of a default costs certificate must be made in Form N254 and must be signed by the receiving party or his legal representative.
(2) The request must be accompanied by a copy of the document giving the right to detailed assessment and must be filed at the appropriate office. (Paragraph 13.3 below identifies the appropriate documents).
10.2 A default costs certificate will be in Form N255.
10.3 Attention is drawn to Rules 40.3 (Drawing up and Filing of Judgments and Orders) and 40.4 (Service of Judgments and Orders) which apply to the preparation and service of a default costs certificate. The receiving party will be treated as having permission to draw up a default costs certificate by virtue of this Practice Direction.
10.4 The issue of a default costs certificate does not prohibit, govern or affect any detailed assessment of the same costs which are payable out of the Community Legal Service Fund or by the Lord Chancellor under Part 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.”
An N254 form should be filled in and served alongside a copy of the document allowing for detailed assessment to take place (either the Order allowing for detailed assessment, a Part 36 Offer and acceptance, or Notice of Discontinuance).
The receiving party should make an application to the Court as soon as possible as the Court may not agree to issue the certificate if Points of Dispute are served in the meantime.
Can a Default Costs Certificate be Set Aside?
A paying party can apply to set aside a Default Costs Certificate in certain circumstances. The Court must set aside a Default Costs Certificate if the certificate was granted to a party who was not entitled to receive it, for example if the certificate was granted before the 21 day deadline.
The paying party may be able to set aside a Default Costs Certificate if they can prove to the Court “that there is some good reason why the detailed assessment proceedings should continue.”
An application to set aside a Default Costs Certificate should be made promptly and within 14 days, and the accompanying Points of Dispute must seek a significant reduction with reasonable prospects of success.
There is usually a high threshold in determining a “good reason” and reasons such as disorganisation or an administrative error are unlikely to be successful. The Court may consider factors such as:
- Failure of the paying party to effectively serve the Bill
- The Bill of Costs being exceptionally/unreasonably high
If, however, thepaying party has filed Points of Dispute, they can obtain an interim costs cretificate, or they can approve an agreement via a Final Costs Certificate.
What is an Interim Costs Certificate?
A receiving party can apply for an interim costs certificate, to receive payments on account of costs, if the paying party has filed their Points of Dispute within 21 days. Interim Costs Certificates can be awarded at any time after the receiving party has filed a request for a Detailed Assessment Hearing.
It is a certificate which orders a payment to be made by the paying party for an amount of costs, which is issued before the Final Costs Certificate.
In the recent case of Warren v Hill Dickinson  1 WLUK 182, it was confirmed that an application for an Interim Costs Certificate is not restricted to an inter partes assessment, as they can also be issued in Solicitor, Client assessments. It also clarified the fact that an application for an Interim Costs Certificate can be made before a hearing for Detailed Assessment has been requested, on the condition that the request has been made by the time the application is heard.
How Can ARC Costs Assist?
The costs team at ARC Costs are highly experienced in the recovery of legal costs.
We can assist in the enforcement of costs by drafting Bills of Costs and applying for Default Costs Certificates when the paying party has failed to serve their Points of Dispute on time.
We can also assist in the application for Interim/Final Costs Certificates, if required.
If you require any free initial advice, or our assistance with regards to any aspect of costs, please email us at email@example.com, or contact us via the Contact Us page and one of the team will get in touch on the same working day.
We can also provide assistance with anything relating to your legal costs claim, whether it be preparing a Costs Budget, to preparing the Bill of Costs and negotiating recovery of your outstanding fees. Simply get in touch to find out more.
What We Do Best
Our dedicated and experienced law costing team provide a wide array of legal costs services. Find out more by following the links below.
Bills of Costs
We pride ourselves in achieving an average recovery of 72% of all Bills
We achieve an average of 81% of the value of the Costs Budgets drafted
Costs Budget Negotiations
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CPR 45 Fixed Recoverable Costs
CPR 45 Fixed Recoverable Costs are becoming a more and more common dispute in costs
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Detailed Assessment Proceedings
Our experienced costs team ensure that the best outcome is achieved on every case