Liverpool: 0151 224 0500   |   Manchester: 0161 827 4600   |   Email: info@bermans.co.uk   |   Twitter Icon  |  Linkedin Icon
bermans_logo

Asset Finance: Two 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 two points which can bring some relief to this situation.

Claims for delivery up of equipment

The general rule for fees instituting court claims is that the fee is set at 5% of the value of money claims between £10k and £200k, with claims over that amount or which are unlimited being set at a fixed fee of £10k.

However, there is a little-known exception to this, which provides that claims for the recovery of goods incur a set fee of £569, and this applies even if the claim also includes a claim for the recovery of money.

So for example a financier seeking to recover its equipment whether from a Lessee or a third party should only have to pay the fixed fee of £569, even if the claim also includes a claim for a termination sum or the payment of damages which may well exceed £200k, and which would otherwise have incurred a set fee of £10k.

It is worth bearing this in mind when assessing the viability of bringing proceedings; for example our experience in using the Specialist Commercial courts is that proceedings can be issued and hearing dates for an interim application for delivery up of goods are usually available within weeks rather than months, and in the case of true urgency such as where there is a threat to the safety of the goods, urgent applications can be listed within a few days should that be necessary.

Contractual claims for costs

The second point worth bearing in mind is that 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 Bermans Asset Finance team 

Sign up for Bermans Newsletters