Northern Powerhouse Developments Limited & Ors v Gavin Lee Woodhouse
[2023] EWHC 1331 (Ch)
Ahmad v Ouajjou & Anor
19 July 2024
[2024] EWHC 2213 (Comm)
High Court
Two sides in a court case had a disagreement about unpaid legal fees. The judge ruled that the losing side had to pay, unless they did so by August 28th. The judge also decided on a simpler way to determine the costs of this new argument, avoiding any issues with confidentiality.
Key Facts
- •Claimant applied for an order to strike out the defendants' defence and counterclaim unless unpaid costs (£113,000) from a previous contempt hearing were paid.
- •Defendants initially conceded to costs but failed to pay.
- •Late evidence was submitted by the defendants regarding their financial difficulties and a Spanish tax decree affecting their assets.
- •Defendants appealed the costs order, but the stay was refused.
- •The claimant's costs are funded by a damages-based agreement (DBA).
- •The court considered whether costs should be summarily or detailed assessed given the DBA.
Legal Principles
Sanctions for non-payment of costs orders involve discretion, considering policy of discouraging irresponsible litigation, Article 6 ECHR, alternative enforcement, and submissions regarding costs orders.
Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (Comm)
Evidence of impecuniosity to avoid debarring order must be detailed, cogent, and provide full disclosure of financial position and prospects of raising funds.
Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (Comm)
Court orders must be complied with unless reversed on appeal or a stay is granted.
Implicit in the judge's reasoning
In DBAs, costs orders are made as per conventional situations; recoverable costs are assessed according to CPR 44.3, and the party cannot recover more than the DBA amount.
CPR Part 44, rule 44.18
Outcomes
Defendants must pay £113,000 by 28 August 2024; failure results in striking out defence and counterclaim.
Insufficient evidence of impecuniosity, available assets not realised, late and unsatisfactory evidence regarding the Spanish tax decree, and no stay on the costs order.
Costs of the current application will be summarily assessed; claimant to provide witness statement certifying compliance with CPR 44.18(2)(b).
Relevant rules allow for costs orders in DBAs, assessment under CPR 44.3; claimant's statement alone insufficient; witness statement provides necessary information without disclosing the DBA itself.
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