Clinical negligence solicitors “missing out” on payments on account

McDonnell: improve cash flow

McDonnell: improve cash flow

Clinical negligence solicitors are missing out on payments on account of costs when the courts make costs orders – even though they are entitled to them in the vast majority of cases, a survey by Just Costs Solicitors has found.

Its poll of 1,178 specialist solicitors found that only 15% reported the courts automatically making an order for a payment on account every time.

Nearly a third said the courts only acted of their own volition in less than 20% of cases they handled – although the majority said it happened in more than half of all cases.

Where the courts have not made an order, 80% of the time it was because solicitors have not asked for one. In only 5% of cases were the courts finding there is a good reason not to do so.

The introducing of costs management has only made a small difference, with just 25% of respondents reporting that the courts are more willing to make an order for payment on account where there is an approved budget.

Nick McDonnell, senior associate and northern regional manager at Just Costs said: “The CPR state that where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so.

“This research shows that claimant firms are missing out on the opportunity to significantly improve their cash flow by failing to secure payments on account.”

Where the court does not make an order, three-quarters of solicitors are issuing applications to obtain interim payments if they are not forthcoming by request, although these are generally challenged – with 28% saying they were challenged every time.

Mr McDonnell added: “Essentially applications should not be needed if advocates simply drew the court’s attention to rule 44.2(8). If the matter settles by consent, a term for payment on account should be included in the order.

“Applications are needed when the costs agreement is by way of part 36 – and if the application is made, the research shows that in the vast majority of cases [89%], they are successful in recovering the costs of their application in addition.”

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