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1

22 Summary assessment
APA Civil para 46.52
Judge dealing with the case decides the amount payable there and then.

Each party is required to file and serve a statement of costs

(a) 24 hours before any interim hearing or appeal which is likely to take no more than one day
(b) 2 days before any fast track trial

2

Summary assessments are used:

(1) For "unreasonable behaviour" assessments in small claims track cases
(2) For most fast track final costs orders
(3) For interim hearings lasting no more than 1 day
(4) For appeals lasting no more than 1 day

If the statement of costs is not filed, the court may order a detailed assessment, but is likely to penalise the winner by ordering them to pay the costs of the detailed assessment:
Wheeler v Chief Constable of Gloucestershire [2013] EWCA Civ 1791

Costs which are summarily assessed are payable within 14 days (CPR, r. 44.7).

3

22 Detailed assessment

Formal and somewhat complex procedure with a bill of costs; written objections to items on the bill; and a formal hearing where the parties argue about how much should be paid and materials on the solicitor’s file are looked at and adjudicated upon by a costs judge.

4

22 Bases of assessment

Question
What is the difference between the standard and indemnity bases of assessment of costs?

Standard basis
(1) Reasonable amount for costs reasonably incurred.
(2) Must be proportionate.
(3) Doubts are resolved in favour of payer.

Indemnity basis
(1) Reasonable amount for costs reasonably incurred.
(2) Doubts are resolved against the payer.

5

When are they used?

Standard basis
Usual for costs between parties.

Indemnity?

• Usual for paying own solicitor
• To deal with misconduct
• To reward a claimant making a successful Part 36 offer

6


What is “proportionate”?
CPR, r. 44.3(5):
Costs incurred are proportionate if they bear a reasonable relationship to –


(a) the sums in issue in the proceedings;
(b) the value of any non-monetary relief in issue in the proceedings;
(c) the complexity of the litigation;
(d) any additional work generated by the conduct of the paying party; and
(e) any wider factors involved in the proceedings, such as reputation or public importance.

7

Willis v MRJ Rundell [2013] EWHC 2923 (TCC)

C’s costs budget = £900,000
D’s costs budget = £700,000
Claim value = £1.1 million

Held: Fact the combined costs budgets exceeded the value of the claim meant the costs budgets were disproportionate and unreasonable.




8

15 Security for costs


Order for Claimant to pay money into court (or give other security) to cover the Defendant’s costs of defending the claim

Syllabus Note
One reading of the Civil syllabus is to the effect only issues 1 to 3 and 5 are on the syllabus. However, one of the conditions (issue 3) in r 25.13(1)(a) is that the court may order security for costs if it is satisfied it is just to do so having regard to all the circumstances of the case. That is saying the court has a discretion (issue 4).

Issues
1. Procedure for applying for security for costs

2. Is the respondent the Claimant or in the position of being a Claimant?

3. Is a condition for ordering security for costs made out?

4. Should the discretion be exercised in favour of granting security?

5. How much and how should security be provided?

9

(1) Procedure for making an application for security for costs

CPR, r 25.12(2): An application for security for costs must be supported by written evidence.

 Application notice (N244)
 Witness statement
 Exhibit a draft bill of costs or other evidence of costs of defending the whole claim
 Serve 3 clear days before the return day
 Statement of costs of security for costs application served and filed 24 hours before return day

10

(2) Is the respondent the correct type of party?

• Claimants choose to bring proceedings. Defendants have no choice. Therefore, provided the grounds etc are made out, it is only Claimants who provide security for costs

• A Defendant may be ordered to provide security for the costs of a counterclaim (or of third party proceedings). In such a case the Defendant is in the position of being the Claimant on the counterclaim (or third party claim).


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Basic Test
There is a two-stage test on applications for security for costs:

(1) Is a condition satisfied under r. 25.13(2)?
(2) Should the discretion (“may”) be exercised on the basis it is just in all the circumstances of the case (r. 25.13(1))?

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(3) Is a condition for ordering security for costs made out?

Conditions for ordering security for costs

CPR, r. 25.13(1)(a): The court may order security for costs if it is satisfied it is just to do so having regard to all the circumstances of the case; and

CPR, r. 25.13(1)(b), (2): One of the following conditions must be satisfied:

(a) Claimant is ordinarily resident outside the jurisdiction, and outside the EU etc.
Fitzgerald v Williams [1996] QB 657

(what used to be para (b) is revoked)

(c) Claimant is a company or LLP and unable to pay the defendant’s costs

(d) Claimant has changed addresses to avoid paying costs

(e) Claimant’s address has not been stated on the claim form

(f) Claimant is a nominal claimant

(g) Claimant has taken steps to prevent its assets being used to pay any costs order

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(4) What factors will the court take into account in exercising its discretion?
Note: From the Curriculum no case law is needed for the exam.

Nasser v United Bank of Kuwait [2002] 1 WLR 1868

• Apply the overriding objective
• “Proportionate” protection against the risk posed by the ground relied upon

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So, for an application based on ground (c), the risk is that impecunious corporations will become insolvent before paying the Defendant’s costs.

• What is the risk of non-payment of costs?
• How much are the costs?
• What effect will the order have on the Claimant?

Porzelack v Porzelack [1987] 1 All ER 1074
Merits of the substantive claim are irrelevant on an application for security for costs unless it can clearly be shown there is a high degree of probability of success or failure

Other factors:

• Avoid stifling a genuine claim (“dealing justly” with the case)
• Delay in making the application (“dealt with expeditiously”)

15

(5) How much and in which form should security be given?
CPR, r 25.12(3): Where the court makes an order for security for costs, it will-

(a) Determine the amount of security; and
(b) Direct –
(i) The manner in which; and
(ii) the time within which
the security must be given.

Procon v Provincial Building Co. [1984] 1 WLR 557
Such amount as the court thinks just in all the circumstances.

Hart Investments Ltd v Larchpark Ltd [2008] 1 BCLC 589
Neither illusory nor oppressive

16

(6) By what means should security be given?

• Payment into court
• Payment into joint account in names of both solicitors
• Other means, e.g. bonds, guarantees
• Typically, the claim will be stayed pending provision of the security




17

21 Enforcement
“Methods of enforcing judgments and orders, and
Transfer of proceedings for enforcement”.

CPR, rr. 70.1 to 70.2 and 70.3; and [i.e. not r. 70.2A]
PD 70 paras 1A.1 and 1.1

Curriculum Rules
Scope of Part 70 and Interpretation
CPR, r. 70.1
(1) This Part contains general rules about enforcement of judgments and orders.
(Rules about specific methods of enforcement are contained in Parts 71 to 73, 81, 83, and 84, and Schedule 2 CCR Orders 27 to 28)

(2) In this Part and in Parts 71 to 73 –
(a) ‘judgment creditor’ means a person who has obtained or is entitled to enforce a judgment or order;
(b) ‘judgment debtor’ means a person against whom a judgment or order was given or made;
(c) ‘judgment or order’ includes an award which the court has –
(i) registered for enforcement;
(ii) ordered to be enforced; or
(iii) given permission to enforce
as if it were a judgment or order of the court, and in relation to such an award, ‘the court which made the judgment or order’ means the court which registered the award or made such an order; and
(d) ‘judgment or order for the payment of money’ includes a judgment or order for the payment of costs, but does not include a judgment or order for the payment of money into court.

18

Methods of Enforcing Judgments and Orders
CPR, r. 70.2
(1) Practice Direction 70 sets out methods of enforcing judgments or orders for the payment of money.

(2) A judgment creditor may, except where an enactment, rule or practice direction provides otherwise –
(a) use any method of enforcement which is available; and
(b) use more than one method of enforcement, either at the same time or one after another.

PD 70 Definitions
PD 70 para 1A.1 (or A1.1)
In this Practice Direction—
(1) 'writ of control' is to be construed in accordance with section 62(4) of the Tribunals Courts and Enforcement Act 2007;

(2) 'writ of execution' includes-
(a) a writ of possession;
(b) a writ of delivery;
(c) a writ of sequestration;
(d) a writ of fieri facias de bonis ecclesiasticis,
and any further writ in aid of any such writs, but does not include a writ of control.


Writ of Possession
A process under with enforcement officers remove people from land.

Writ of Delivery
A process under which enforcement officers recover goods belonging to the Claimant from the Defendant.

Writ of Sequestration
Process under which court appointed officers (“sequestrators”) take possession of goods belonging to the Defendant and hold onto them until the Defendant obeys a court order. It is a way of putting pressure on the Defendant to obey an injunction.

Writ of fieri facias de bonis ecclesiasticis
An ancient procedure for seizing a debtor’s ecclesiastical property to satisfy a High Court judgment. Executed by diocesan officers of the Bishop.

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Methods of Enforcing Money Judgments: rule 70.2
PD 70, para 1.1
A judgment creditor may enforce a judgment or order for the payment of money by any of the following methods:

(1) a writ of control or warrant of control (see Parts 83 and 84);

(2) a third party debt order (see Part 72);

(3) a charging order, stop order or stop notice (see Part 73);

(4) in the County Court, an attachment of earnings order (see CCR Order 27);

(5) the appointment of a receiver (see Part 69).




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See table LG

Enforcement Method
Writ of control
Warrant of control
Third Party Debt Order
Charging order
Attachment of Earnings
Receiver

Asset
Goods owned by JD
Goods owned by JD
Money owed to JD
Typically, bank accounts
Land
Shares, stock etc
Funds in court
Income from employment
Rents, profits and income from JD’s property

21

Court
High Court
CC judgment over £5,000
HC judgment over £600
County Court
CC judgment under £5,000
HC judgment under £600
High Court or County Court
High Court for HC judgments over £5,000 and CC judgments over £30,000

County Court for HC judgments under £5,000 and CC judgments up to £30,000
County Court
County Court or High Court

Process
File request for issue of the writ. Enforcement officers take JD’s goods
File request for warrant. Enforcement by enforcement agents
2-stage:
Without notice for order interim order
With notice for final order
2-stage:
Without notice for order interim order
With notice for final order
Filing a request
Application notice with written evidence for court order

22

Curriculum only has:
Transfer of Proceedings for Enforcement
CPR, r. 70.3

(1) Subject to rule 83.17, a judgment creditor wishing to enforce a High Court judgment or order in the County Court must apply to the High Court for an order transferring the proceedings.

(2) A practice direction may make provisions about the transfer of proceedings for enforcement.

23

Enforcement Officials
These are:-

1. Enforcement Agents (in the County Court) (under the Tribunals, Courts and Enforcement Act 2007)
2. Enforcement Officers (in the High Court) (under the Courts Act 2003)

24

QUESTION 2 Enforcement
The liquidator of Alacrity Concessions plc (“ACP”), has obtained judgment for £12 million against the company’s former managing director, Dennis Walker-Merryman. In the proceedings the liquidator alleged that Dennis transferred assets worth in excess of £15 million from ACP to DWM Limited, a company in which Dennis is a director and major shareholder.

Dennis has a home in London (worth £3 million), and there are several expensive cars parked in the drive to the house. Dennis is known to have bank accounts:

(a) in his own name with Municipal Bank plc; and
(b) in the joint names of himself and his wife with Regional Bank plc.

Advise the liquidator on suitable methods of enforcing the judgment against Dennis.

What Assets does Dennis own?

• Shares in DWM Ltd
• House in London
• Cars
• Bank account in own name with Municipal Bank plc
• Joint bank account with wife with Regional Bank plc

25

Enforcement Methods Available
Asset
Shares in DWM Ltd
House in London
Cars
Sole bank account
Joint bank account

Enforcement method
Charging order
Charging order
Writ of control
Third Party Debt Order
Nothing

26

Execution against goods
• Warrant of control (County Court)
• Writ of control (High Court)

Issuing the warrant (or writ) is a simple process of filing a request, and then serving the writ on the Enforcement Officer or Enforcement Agent. The hard bit is the Enforcement Officer (or agent) getting goods from the JD.
Enforcement agents (CC) or Enforcement Officers first write to the JD warning that they will be coming.

They are allowed to use force to enter JD’s home or business premises. Once there they may remove goods up to the value of the judgment. JD then pays up, or goods are removed and auctioned.

Cars are goods. Often a preferred item by enforcement agents etc, because you just lift them / tow them away without having to enter JD’s home.

Enforcement agent often enters into a “controlled goods agreement”

27

Exempt Goods
Enforcement agents cannot take “exempt goods”, (such as tools and equipment up to £1,350 used by the JD in his employment or trade)
Also clothes, bedding etc

Not covered at all by the writ or warrant of control (and therefore cannot be removed by the enforcement agents) are goods belonging to someone else
Eg a car on hire purchase does not belong to JD, but to the finance company

28

Competing claims

Competing claims
Enforcement agents sometimes need to make "stakeholder claims"
e.g. when goods the enforcement agents wish to seize are claimed to belong to someone other than JD

29

Third Party Debt orders
Used where JD is owed money by a third party. Eg., debtor has a credit balance in a bank account (or is owed money by somebody). It is an order requiring the bank to pay money from the account to the creditor to pay the judgment.

Two stage process:

• Without notice application for interim order freezing the money until

• On notice hearing, where the court considers whether to make a final order

There is a well-known rule that a Third Party Debt order is not available against a joint bank account:
Hirschon v Evans [1938] 2 KB 801 APA Civil para 48.22

30

Charging orders
Court order imposing a charge (like a second mortgage) on JD’s land (or “securities”, such as company shares etc)

Two stage process:

• Without notice application for interim order

• On notice hearing to consider making final order


What it gives the creditor is security, in case JD subsequently becomes insolvent

In practical terms, the Judgment Creditor has to register the charge, and to wait until the JD sells the charged asset. When it is sold, the Building Society and anyone else with a charge on the asset gets paid off from the proceeds of sale.

Charging Orders can be made against whatever interest JD has in the asset. They can, for example, be made against JD’s share in the matrimonial home (where JD owns only part of the equity of redemption).

31

Enforcement of Charging Order by sale
Issue new claim

Governed by Trusts of Land and Appointment of Trustees Act 1996, s. 15
Mortgage Corporation v Shaire [2001] 4 All ER 364

32

Stop Order / Stop Notice
CPR, r. 73.16 and Charging Orders Act 1979
“stop order” means an order of the court prohibiting the taking, in respect of any of the securities specified in the order, of any of the steps mentioned in Charging Orders Act 1979, s. 5(5)


“stop notice” means a notice requiring any person or body on whom it is duly served to refrain from taking, in respect of any of the securities specified in the notice, any of those steps without first notifying the person by whom, or on whose behalf, the notice was served

33

Charging Orders Act 1979, s. 5(5):
The steps mentioned in subsection (1) above are—


(a) the registration of any transfer of the securities;
(b) in the case of funds in court, the transfer, sale, delivery out, payment or other dealing with the funds, or of the income thereon;
(c) the making of any payment by way of dividend, interest or otherwise in respect of the securities; and
(d) in the case of units of a unit trust, any acquisition of or other dealing with the units by any person or body exercising functions under the trust.

34

Attachment of earnings
Court order requiring JD’s employer to deduct instalments from salary
• Mainly available in CC (not High Court)
• JD must be employed (not Self-Employed)
• Occupational pension can be attached. State pensions cannot

Notice the form of the order

• Debtor’s protected earnings rate. No deductions can be made to reduce earnings below this figure
• Debtor’s normal deduction rate. The weekly or monthly instalment towards paying the judgment

35

Receiver
An order appointing a receiver is required. So an application must be made (N244) supported by written evidence (CPR, r. 69.3).

A receivership order appoints some responsible person to receive the rents, profits or other income from the assets of the JD covered by the order. The receiver applies these for the purpose specified by the order, which might be in payment of a judgment debt.

It is a last resort order, and only made if it is impossible to enforce using any of the other methods.