A Positive Tips on Costs
Financiers have been, together with almost all other litigants, subject to what seems to be an ever-increasing spiral of expense in navigating the various fees and charges payable under the court system, a trend which is been in place now for almost 2 decades.
We thought it is worth highlighting one point which can bring some relief to this situation.
Financing documents should always contain a provision entitling the financier to the contractual payment of all its costs incurred in enforcing an agreement, preferably on the indemnity basis.
Provided that such a clause appears in the financing document, the financier can then avail itself of the advantage of the court rules in CPR 44.5, which provides:
“where the court assesses (whether by summary or detailed assessment) costs which are payable by the paying party to the receiving party under the terms of a contract, the costs payable under those terms are, unless the contract expressly provides otherwise, to be presumed to be costs which—
(a) have been reasonably incurred; and
(b) are reasonable in amount,
and the court will assess them accordingly”.
The court will still examine the costs claimed but, provided that they are not excessive, the usual practice which we have encountered is that the courts will allow financiers to recover costs on a much more generous basis than would be the position without the appropriate contractual clause in the financing document.
Contact our Invoice Finance team.