In litigation, costs are a fundamental aspect of case management and post-trial proceedings. Civil Procedure Rule (CPR) Part 47 governs the detailed assessment of costs, which comes into play once a court has ordered that one party pays another’s costs. CPR 47.16 addresses the issue of interim costs certificates and when they can be applied for. This allows for the payment of costs on account before the full detailed assessment is complete. CPR 47.17 deals with final costs certificates once detailed assessment proceedings have concluded.

How Can I Obtain a Payment on Account of Costs?

Strictly speaking, you can seek a payment on account of costs from the Paying Party at any time in proceedings, there is nothing preventing the parties to consenting to this.  It is also in the Paying Party’s interest to make payments on account of costs, as ultimately it reduces the burden for interest (which accrues at 8% per annum) on all outstanding debts.  Given some detailed assessment proceedings can take 12 – 18 months to conclude in larger cases, this interest burden can sometimes be significant.

That said, there are few opportunities to enforce a Paying Party to make an interim payment on account of costs.

The two prominent times available are:

1. When an action is concluded and an order made for costs to be assessed, CPR 44.2(8) compels the Court to make a reasonable allowance for a payment on account of costs when making any final order.  If the parties are agreeing matters by way of a Tomlin Order, ensure as a Receiving Party you are including a reasonable provision for interim costs.

2. Applying for an interim costs certificate once the Receiving Party has lodged for a detailed assessment of their costs.

What is an Interim Costs Certificate?

An interim costs certificate is a court-issued order for costs that specifies an amount of costs that must be paid by the Paying Party to the Receiving Party before a detailed assessment of the full bill of costs has been concluded. It acts as a payment on account of costs that will ultimately be determined during the full assessment process.

The certificate is not a final determination of the costs payable, this would be determined by a final costs certificate under CPR 47.17. An interim costs certificate is a provisional order that facilitates early part-payment of the sum due to the Receiving Party, helping them to manage cash flow and legal expenses while awaiting the outcome of a full assessment.

CPR 47.16 and Interim Costs Certificates

The relevant rule in relation to interim costs certificates is CPR 47.16, which provides:

“(1) Where the court has ordered a detailed assessment of costs to be made, it may issue an interim costs certificate specifying an amount which, in the court’s opinion, is a reasonable sum to be paid on account of costs.

(2) An interim costs certificate may be issued at any time after the receiving party has filed a request for a detailed assessment hearing.

(3) The court may order the party liable to pay costs to pay the amount certified in the interim costs certificate, either immediately or within such time as the court may specify.”

This rule gives the court a discretionary power to issue an interim certificate at any point after the receiving party has requested a detailed assessment hearing however, the Receiving Party can proactively apply in the absence of any such order by the Court.

Purpose and Importance of CPR 47.16

The rationale behind CPR 47.16 is rooted in fairness and efficiency. Detailed assessments can be time-consuming and costly, sometimes taking months to complete. During this time, the Receiving Party, who has already incurred substantial legal costs, may be waiting for reimbursement.

An interim costs certificate:

• Protects the receiving party by ensuring they are not unfairly burdened by delays in recovering their costs;
• Encourages efficient resolution by discouraging the paying party from using delays in assessment as a tactic to avoid or delay payment;
• Reduces the risk of injustice, especially where liability for costs is clear and the only issue is the quantum of costs payable.

It is an important tool in costs case management, particularly in large or complex litigation.

When Can an Interim Costs Certificate Be Issued?

An interim costs certificate can be issued only after the Receiving Party has filed a request for a detailed assessment hearing, as per CPR 47.16(2). This is a procedural requirement and serves as a checkpoint to ensure that the receiving party has taken active steps to pursue detailed assessment.

The court may consider issuing an interim certificate in situations where:

• The total costs claimed are substantial;
• There is no serious dispute about liability for costs;
• There is a significant delay between filing the bill of costs and the date of the detailed assessment hearing;
• The receiving party has demonstrated that they are incurring hardship by not receiving part payment of their costs.

It is often the case that an interim certificate is sought at a case management conference (CMC) or interim costs hearing, though the court may issue it at any point during the detailed assessment process.

How Much Will the Interim Certificate Award?

The amount specified in an interim costs certificate is at the discretion of the court and is intended to reflect a reasonable sum likely to be recovered on assessment.

The court will typically consider:

• The amount claimed in the bill of costs;
• The strength of any objections raised by the paying party;
• Previous costs orders;
• Any offers or payments already made on account;
• The proportionality and reasonableness of the costs claimed so far.

There is no fixed formula, but the court may adopt a cautious approach—especially if the Paying Party disputes the amount or raises issues of proportionality. In many cases, the court may order payment of a percentage of the total bill as a pragmatic interim measure.  It is common in a non-budgeted matters for circa. 50% of costs to be awarded on account however, if budgeting has taken place, up to 90% of the approved budgeted amounts may be awarded on account, particularly if the matter has concluded at Trial.

Procedure for Applying for In Interim Costs Certificate

While CPR 47.16 does not mandate a formal application process and the Court can make an interim order for a payment on account of costs of their own volition, in practice, the Receiving Party will often:

1. Serve the bill of costs in accordance with CPR 47.6 and CPR 47.9;
2. Parties exchange Points of Dispute and Points of Reply;
3. The Receiving Party then files a request for a detailed assessment hearing using Form N258;
4. Make an application (often on paper) for an interim costs certificate, setting out the reasons why it is appropriate;
5. Include supporting evidence, such as a breakdown of costs, offers received, or evidence of financial hardship;
6. Attend a hearing if directed by the Court.

Practice Direction 47 Paragraph 15 specifically states a Receiving Party can apply for an interim costs certificate, and if the Paying Party contests the application, the Court may list a hearing to resolve the matter rather than resolving the matter on the papers only.

CPR 47.16 – Power to Order Payment

Under CPR 47.16(3), the court not only has power to issue a certificate but also to order the Paying Party to make payment, either immediately or within a specified time. This transforms the certificate into an enforceable court order for that amount.

Failure to comply with such an order could lead to enforcement action, including:

• Charging orders;
• Third party debt orders;
• Writs or warrants of control.

As such, it is essential that Paying Parties comply with orders arising from interim certificates.

Relationship with CPR 44.2(8)

It is also important to distinguish CPR 47.16 from CPR 44.2(8), which allows the court to order a payment on account of costs at the time a costs order is made. CPR 47.16, in contrast, is specifically concerned with interim certificates during the detailed assessment process.

While both mechanisms serve a similar purpose, early payment of costs, they operate at different stages of the litigation.

Obtaining a payment on account of costs is not always accessible under CPR 44.2(8), for instance when a matter concludes by way of acceptance of a Part 36 Offer, as there is no opportunity to ask the Court to endorse an order including provision for interim costs.  In the matter of Global Assets Advisory Services Ltd v Grandlane Developments Ltd [2019] EWCA Civ 1764  it was determined by the Court of Appeal that because the Receiving Party had not yet had an opportunity to apply for a payment on account of costs due to accepting a Part 36 Offer, that a Part 23 application made pursuant to CPR 44.2(8) should be permitted.  This was despite contrary decisions made previously in Finnegan v Spiers [2018] EWHC 3064, where Birss J held that accepting a Part 36 offer resulted in a deemed costs order which could not be varied, and it was concluded at that time that no application could be made pursuant to CPR 44.2(8).

Fortunately, the Court of Appeal set out more favourable guidance in the matter of Global Assets Advisory Service, and therefore if you are a Receiving Party pre-lodging for a detailed assessment hearing, and you have not yet had an interim payment on account of costs, CPR 44.2(8) can be utilised in your favour.

How can ARC Costs Assist with Applications for Interim Payments on Account of Costs?

The costs team at ARC Costs are highly experienced in the recovery of legal costs, and are independent experts that can assist Paying or Receiving Parties.  Whether you are making or have received an application pursuant to CPR 44.2(8), or CPR 47.16, we are more than happy to advise and assist.

For Receiving Parties, our expert team can assist in the enforcement of recovering costs by drafting Bills of Costs and conducting negotiations/detailed assessment where necessary, and applying for interim payments (via Interim Costs Certificates if necessary) on your behalf.

We can also assist in the application for Default/Final Costs Certificates, as/when required.

For Paying Parties, we can assist in challenging any applications for interim payments you feel are unreasonable, or advising on appropriate interim payments to make on account of costs.  We can also assist with the detailed assessment process, in conducting negotiations or settling Points of Dispute and providing legal representation at any costs hearings.

If you require any free initial advice, or our assistance with regards to any aspect of costs, please email us at info@arccosts.co.uk, or contact us via the Contact Us page and one of the team will get in touch on the same working day. You can also speak to one of our experts by phone, by calling 01204 397302.

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. 

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