High Court warns successful parties not to expect interest on pre-judgment costs

Interest: costs process is rough and ready

The High Court has given a strong steer that successful parties can rarely expect to recover interest on the fees they have already paid to their solicitors.

Mr Justice Dingemans suggested it was simply part of the cost of litigation.

Schumann & Anor v Wasbrough [2013] EWHC 4070 (QB) saw professional negligence cases brought against a law firm and barrister dismissed after various preliminary issues were determined.

The successful defendants then asked the judge to exercise his discretion to grant interest of 1.5% on the pre-judgment costs, from the date of payment until that of the judgment.

Noting that “the making of such orders is not usual”, Dingemans J said: “This is not necessarily a reason for not making such an order, but it suggests that there might be proper reasons for not making such an order.”

The judge said the exercise of the costs jurisdiction has “always been rough and ready”. He continued: “For example, it is well known that an order for payment of costs on the standard basis rarely provides a complete indemnity to the winning party. The parties have always had to accept that there is a cost of being involved in litigation.”

He was also concerned that such an order would complicate the costs assessment process and itself increase costs. “The generation of further costs creates barriers for parties litigating in the courts.”

Further, there were other routes – such as interim payments on account of costs – that ensure parties who have paid costs to their lawyers are not kept out of pocket for long periods and would avoid the need for careful calculations and evidence about payment dates.