Unable to pay order for costs - still on going but relates to unpaid service charges dating from 2008.

[marloes]

Hi, I have been ordered by a judge in a small claims case to pay the claimant costs.

The case is not finalised and there will be another final hearing.

I've received a letter from the court confirming the order.

 

I cannot afford to pay as I'm unemployed,

do I write to the claimant via their solicitors stating I can't pay.

What is likely to happen?

Thanks.

[AndyOrch]

Hi Marloes

 

On a Costings Order you can apply to vary it with the N245 to a monthly payment.Enclose a I&E and your offer and first payment.Move swiftly before they try to execute the Order.

 

Regards

 

Andy

[marloes]

I'm unemployed at the moment so can only afford a very small payment.

The order was made at the end of last September and I foolishly thought it would be wrapped up with everything else at the end of the case.

 

The claimant has done nothing to chase the costs order but the barrister is using my ignorance of how the court/law works to say this is unreasonable behaviour as they are also after another £5k in costs.

 

Do you think the judge will view this as disproportionate as it is more than the value of the original claim.

They chose to employ both solicitors and barristers.

[AndyOrch]

Difficuilt to advise marloes without knowing the history, was it this one http://www.consumeractiongroup.co.uk/forum/showthread.php?345403-Claim-form-received-from-Hillesden-Securities

or is this another?

 

Regards

 

Andy

[marloes]

No this is another one relating to unpaid service charges.

Just under £5k of unpaid charges relating back to 2008.

 

I with held them as repairs/ decoration were not/ are not taking place.

In hindsight I realise I should have paid them then challenged via an LVT.

 

not knowing how the law works I submitted an amended defence on the day of the final hearing

- the judge said I had a choice of proceeding with my original defence (completely naive) for a final judgement there and then or pay for the barrister and solicitors costs for the day, ( cited as unreasonable behaviour ) and be allowed to submit a new defence.

I took the latter route,

 

the barrister in his skeleton argument cites they are pursuing me for over £5k of costs and that as I have already been found to acting unreasonably that is a primia facie case for awarding all costs despite being a small claim.

[AndyOrch]

Ok well as post#2 then you will be exempt re the fee.

 

Regards

 

Andy

[marloes]

Hi.

 

Could anyone provide some clarification on the following as I'm uncertain what to do and need to act quickly.

 

As I've stated above I've received an N24 (General Form of Judgement or Order) stating the following

' The Defendant shall pay the Claimant's costs for today's hearing summarily assessed in the sum of £1200.'

This was awarded last Sept/Oct.

There is no time frame stated within which to pay.

As the case is not finalised I thought these costs would be added to all costs at end of case.

The claimant has not chased this order

 

today I have received a letter from their solicitors stating that if I don't pay within 7 days that they will apply to the court for an order

'that unless you make payment of the sums awarded that you be debarred from further defending the claim.

That application will include an additional claim for costs.'

I was intending to follow Andy's advice as above

 

speaking to Community Legal advice I have become confused as they have told me that it should be considered all together at the end of the case.

I'm awaiting a letter of proof from the jobcentre re JSA which should arrive shortly.

Can it do any harm to send off the N245 AND EX16???

 

Bump

[Ganymede]

As Andy has said apply to vary the Order to affordable monthly payments.

 

The costs were summarily assessed so take what Community Legal Advice said with a pinch of salt.

[marloes]

Thanks Ganymede, I will do that.

I would rather take action than leave it.

 

By the way what is the difference between detailed assessment and summarily assessment?

 

I'm still waiting for proof of benefits from Glasgow- asked for last Monday.

 

In the interim if the claimant carries through their threat to get an order, is it right that they have to issue it to me and if they fail to do so I can have it set aside?

[hmmh1978]

By the way what is the difference between detailed assessment and summarily assessment? Marloes

 

Summary assessment under CPR r. 43.3 is when the judge in a hearing assesses the cost of the case if practical. Usually involves all parties filing a N260.

 

Detailed assessment as per CPR r. 43.4 is when the amount of costs is decided by a  cost officer. The costs officer means a costs judge, a district judge and an authorised court officer as per CPR r. 43.2(1)©.

[marloes]

Thanks hmmh. After looking for the N245 form online I have read that I should fill it in if the following apply

 

If the county court has already ordered you to pay a set amount each month on a credit debt and you cannot afford the amount set.

OR

If the county court has informed you that a creditor has issued a 'Warrant of Execution' or you have been visited by a county court bailiff.

 

I haven't been ordered to pay 'a set amount each month' or had a Warrant issued against me. Is an N245 still the correct form?

[AndyOrch]

If the county court has already ordered you to pay a set amount each month on a credit debt and you cannot afford the amount set.

 

Yes its the correct form.

 

Regards

 

Andy

[hmmh1978]

The costs order is not set to instalments.

It is immediately payable within 14 days (CPR r. 44.8) if no other date is set.

I am trying to understand how the N245 comes into effect in this instance.

 

Not to step on anyone's toes here however I would contact the solicitors and ask if they would accept instalments.

If they don't want to entertain the thought, then I would submit a N244 (with hearing), draft order, witness statement, I&E form, to get the court to order an instalment order or even to postpone the costs order if there is a counter-claim or a right of set off.

 

In practice, the use of the wrong form is not a show stopper as the court has the power to remedy errors in procedure.

[marloes]

Ok thanks for advice.

I'm seeing solicitor at community legal tomorrow so will ask.

 

It would be massively helpful if the courts sent out info sheets when they issue these forms

- how many people I wonder do nothing because they don't know what to do.

The system favours those who can afford legal help

- disgraceful.

[hmmh1978]

That is great news about you seeing the solicitor.

 

Be sure to question him/her about the "variation of a costs order" and not a variation of an instalment order or stay of execution.

That is particularly important because the variation of a costs order is not as well documented as you stated.

 

The County Court Rules (CCR) have some pertinent information however it is in very vague detail.

Be sure to press him/her for evidence of what he/she says so you can go back and research it and don't be shy to ask for a letter confirming everything he/she said.

 

Ps. Make sure they are a solicitor and not a law student or graduate supervised by a solicitor.

[marloes]

Hi, there have been further developments which I hope someone can help me with.

I' m not sure whether to post a new thread so will continue here.

 

Submitted the N245 re the claim for interim costs.

Received a letter later from court stating "No Action"' I didn't understand this so did nothing.

 

I' ve now

- nearly a year later received a general form of judgement or order stating that I failed to comply with the order to pay costs ( which as I'm unemployed I could'nt pay in outright and so submitted a N245)

 

The order states that I must now pay the full amount plus an additional figure for which there is no breakdown of.

I have rung the court who were not that helpful and the woman said the figure was for interest.

 

My questions are

1) can a judge choose to ignore an N245?

 

2) The claimants solicitors are asking for approx £7k costs on the small claims.

 

I know there are restrictions on small claims but they are trying to argue I acted unreasonably although they have not made clear for what exactly.

 

The court person said That I must respond to the solicitors letter whether I agree to their costs to both the court and solicitors and if I don't I will be held in contempt.

Please can someone advise.

Typing on a tablet so please excuse mistakes.

 

Can someone advise on the following.

 

I have received an order to pay on the small claims track.

The order states costs are to be assessed if not agreed.

 

The claimants solicitors have sent a letter stating that if I don't agree to their £6k costs that they will contact the court for an assessment of costs.

I tried to get some info on this from the court but they were not very helpful.

 

Do I need to write to both the court and the claimants solicitors stating I do not agree.

If I do not write to eithe party will I be in contempt or other trouble?

[citizenB]

I have sent an S.O.S on your behalf. I am sure someone will be along soon.

[marloes]

Thanks, appreciate it.

[AndyOrch]

So you disagree with the costs and submit your points of dispute once assessed :- See below taken from the sticky http://www.consumeractiongroup.co.uk/forum/showthread.php?356814-The-Process-of-Litigation..-Court-Claims-Defences

 

Costs

 

If a claim is successful, the Court will usually order the losing party to pay the winner their "costs". What is meant by "costs" is a complex area, and has important implications for anyone contemplating or involved in litigation. The introduction of the Civil Procedure Rules has also radically changed how costs are ordered and assessed. Under the terms of the retainer between the solicitor and the client, the responsibility for paying the solicitor’s costs and disbursements such as barristers’ and experts’ fees rests with the client, whether or not the claim is successful. If an order for costs is made, unless the parties agree how much the costs will be, the Court will decide how much the loser should pay.

 

Litigation can be extremely expensive, especially if the case is complex and involves barristers and experts. It is for this reason that, if you have legal expenses insurance, it is very important to ensure that you notify your insurer of any dispute you become involved with as soon as possible-most policies are very restricted on when claims will be considered.

Normally the "winner" of a case is awarded the legal costs, but this does not necessarily follow. The Court has very wide powers to deal with the costs of a case in any way it feels is appropriate and this can often mean that the party that has behaved most reasonably has the best chance of getting their costs paid. Costs may also be ordered during the progress of the case if any applications have been made. The usual order is for the loser to pay the winners reasonable costs, to be assessed by the Court if no agreement can be reached.

 

Costs orders

 

The Court has the power to make any award of costs it thinks appropriate, and at any time a Court order is made. Consequently the Court may make costs orders during the proceedings, not just at the final hearing. Usually no order for costs is made in small claims apart from the issue fee and the fee of any expert instructed, unless one of the parties has behaved unreasonably. The rules also provide for "fixed costs" in some cases; for the issue of proceedings for instance, and also for some types of claim such as possession proceedings.

 

The normal rule is that "costs follow the event"; in other words, the loser pays the winner’s costs. However, the Court is required to take the conduct of the parties into account as well as who is successful, and make an order that does justice to the parties in the circumstances.

 

The Civil Procedure Rules impose a duty on the parties to proceedings to assist the Court in achieving the "overriding objective", which is to deal with cases justly. One aspect of the overriding objective includes saving expense, and cost. As a result, the Court may penalise a party that has not complied with the spirit of the Rules, by for example failing to serve a pre-action protocol letter if required. In addition the Court will take into account offers to settle and payments into Court. If a Costs order is made, it will state whom the "paying party" (usually the loser) and the "receiving party" (usually the winner) is, and also what basis of assessment is to be used if no agreement can be reached.

 

In fast track cases the Court performs the assessment at the end of the trial. In multi-track cases, or if a claim is settled during proceedings with an agreement that costs be paid by one of the parties (for instance if a part 36 offer is accepted), a schedule of the costs is sent to the paying party to try to reach agreement. If this is not possible then a costs draftsman prepares a bill of costs for assessment by the Court. Both the costs draftsman and the Court charge fees.

 

The CPR encourages the parties to negotiate, but ultimately the Court may be requested to assess the bill. The Court has to decide:-

 

Whether it is reasonable for the loser to pay for the work charged for; and

Whether the hourly rate charged by the solicitor is reasonable.

 

The Court will not require the loser to pay the winner if he or she has behaved unreasonably, by for instance telephoning or writing to his or her solicitor more often than is necessary to progress the case. Nor will the assessing Court regard a senior solicitor dealing with a simple case as being reasonable. Each Court area sets standard rates for solicitors of different levels of experience, and it may award a lower rate than is claimed in such a case. Similar principles apply when the Court assesses the amount claimed for barristers' and experts' costs.

 

The Court may decide that the amount the loser must pay in costs is less than the winner has paid to his legal team. As the Court tends to be conservative when it assesses costs, the loser is often ordered to pay only 75% or so of the winner's costs.

Even if a costs order is made, this does not guarantee that payment will be made; if it is not, the successful party may have to use enforcement methods to recover the money and may be unsuccessful if the loser does not have the means to pay. In addition, if the losing party has a Public Funding Certificate (which used to be called "Legal Aid"), the Court may still make a costs order, but may also order that payment of the costs will not be enforced without the Court’s permission.

 

Disbursements

 

These include barristers’ fees, Court fees and experts’ fees. Often a party's solicitor will require payment in advance of the disbursement being incurred, as it is usually the solicitor that is responsible for payment of these fees. these fee may be recoverable at the end of the case.

 

Agreement

 

The Court will expect the parties to attempt to agree the costs between them, as far as possible. The receiving party will prepare a schedule of its costs and submit this to the paying party, and invite comments on it. Often the parties will not be far apart, and agreement may be reached. If no agreement can be reached, the receiving party must draw up a formal bill of costs which summarises precisely what was done and when. A costs draftsman normally does this, who will charge a percentage of the bill for doing so (normally 2%). This is then sent to the paying party, who must serve a formal response within 21 days, stating what elements of the bill are disputed. If no response is served, the receiving party may apply to the Court for a "default costs certificate". This is an order requiring payment within 21 days of the certificate, and can be enforced as a judgment against the paying party. If a response is served, the receiving party may either negotiate, or ask the Court to set a date for assessment. The receiving party must make the application for assessment within 3 months of the costs order, unless the parties agree an extension.

 

The basis of assessment

 

The Court must be satisfied that the costs that are being sought are not unreasonably incurred or unreasonable in amount. However there are two different bases of assessment that the court may order.

The usual order is that costs are assessed on the "standard basis". This means that the paying party must pay only an amount of costs that is "proportionate to the matters in issue"; in other words, it will not sanction a large bill for a small dispute. It will resolve any doubts it may have as to whether the costs are reasonably incurred, or reasonable in amount and proportionate, in favour of the paying party. In unusual cases the Court will order that costs are to be assessed on the "indemnity basis", which means that it is the receiving party who receives the benefit of any doubt.

 

Summary Assessment

 

The Court has the power to make a summary assessment of costs during the proceedings, without needing to go through the lengthy detailed assessment procedure. It is also required to do so at the conclusion of a "fast track" trial. The parties will both prepare costs summaries for the hearing, and serve these on each other prior to it. The Judge will consider the summary at the conclusion of the hearing and decide the amount of costs to be awarded.

 

Detailed Assessment

 

If the parties cannot agree the costs, the receiving party will ask the Court to set a date for the detailed assessment of the bill. District Judges undertake the assessment, but in London the Supreme Court Costs Office deals with cases in the High Court. Representatives of both parties attend the hearing. The District Judge will consider the submissions of both parties and decide whether the work done was reasonably necessary, and if so, whether the time taken and the solicitor’s hourly rate claimed was reasonable (different rates apply in different parts of the country, and are set by the Court). Normally the Court will reduce a bill by about 15%, as a rule of thumb guide, on assessment. The District Judge will also decide which party should pay for the costs of the hearing itself, and summarily assess them as well. Any order made to pay a sum of money as costs is enforceable just like any other order.

 

Regards

 

Andy

[marloes]

Thanks for that Andy.

 

Am I right in thinking from reading your post that I must send letters to both the claimant' solicitors and the court stating that I don't agree to their claimed costs?

Do I need to detail my reasons why I don' t agree?

 

The claim is on the small claims track and I have been ordered to pay less than £6k.

The claimant has sent me a list of their costs for nearly £6.5k.

 

Am I right in thinking this is not proportional?

Should I state that I will pay the court fees only as per the CPR?

 

I spoke to someone at the court to ask about this and she said if I don' t send a letters I will be in contempt of court.

 

The court order states " costs to be assessed on the standard basis if not agreed" while the solicitor states that I have 7 days to confirm whether I agree to their costs and if I don't they will apply to the court.

 

I only received their letter on Monday and it means any letter to them will fall outside 7 days response time.

 

I'm worried and unsure of what I'm supposed to do.

 

Also this order has come about as the court rejected my N245 to vary the costs of an amended defence.

 

I didn't think they could disregard an N245 and put judgement on me which has meant I have lost my chance to defend the case.

 

After reading more posts and searching for information I'm even more confused.

 

Most things I've read state that on the small claims track only costs such as court fees can be claimed by the winner.

 

The claimants original claim was for £4.5k but the order I've received from the court says I'm ordered to pay £6k. So does this additional £1.5k include the interest and (fixed) costs?

 

Why have the solicitors sent me a bill for £6.5k if it's on small claims.

Are they just trying it on?

 

Why does the order state "costs to be assessed on the standard basis if not agreed"?

 

Any clarification anyone? Read too much and going to bed now....

[Ganymede]

Sorry can you tell us exactly what the Court sent you after you submitted your N245 please.

[AndyOrch]

Sorry can you tell us exactly what the Court sent you after you submitted your N245 please.

 

 

 

" Submitted the N245 re the claim for interim costs. Received a letter later from court stating "No Action"' I didn't understand this so did nothing. I' ve now - nearly a year later received a general form of judgement or order stating that I failed to comply with the order to pay costs"

 

I must admit I wasn't sure or tested an application on N245 for a costs order so unable to assume the outcome.

 

Regards

 

Andy

[Ganymede]

There must have been more to the Court's letter than "no action".

[AndyOrch]

There must have been more to the Court's letter than "no action".

 

You would have thought so but stranger things do happen Gany

[marloes]

Thanks for your replies. I'll set out the chain of events to try and make things clearer.

 

March 2011 received claim for unpaid service charges ( in dispute)

 

March 2011 submitted v,v basic defence.

 

August 2011 hearing. At the hearing I submitted an amended defence as I had done more research and realised how basic my first was. I had to agree to pay the other sides costs for the new defence - approx £1,500.

 

May 2012 - second hearing. Unfinished as not kept to schedule.

Third hearing scheduled.

 

June 2012 - received an unless order. Unless I pay £1,500 costs as per previous hearing

that I be debarred from defending the claim.

 

Before deadline for unless order I submitted an N245 and IE.

 

Received letter from court merely stating " No Action"

 

A couple of months later a letter from court stating claimant can enter for judgment.

 

Over 7 months later ie this week I receive an order to pay the claimant the sums claimed plus interest & costs.

 

Not sure what to do now except submit an N245 for the claim but can someone help me understand what happens to the costs.

This is on the small claims track.

Thanks.