Cost orders—interest
Cost orders—interest

The following Dispute Resolution guidance note provides comprehensive and up to date legal information covering:

  • Cost orders—interest
  • Definitions
  • Duty to inform your client of costs orders
  • Is there a right to interest on costs?
  • How and when can interest on costs be awarded?
  • Statutory power of the court to award interest on costs—High Court
  • Statutory power of the court to award interest on costs—County Court
  • Courts’ powers under the CPR
  • Statutory right to interest
  • Contractual entitlement to interest
  • more

Definitions

The following definitions are used in this Practice Note:

  1. interest—this is an additional award made to the winning party to effectively compensate them for either not having the use of their money throughout the course of the proceedings (it has been used to pay legal costs) or the costs of borrowing money (to pay legal costs)

  2. judgment debt—this includes a judgment debt created by an order for payment of costs, as confirmed by the House of Lords in Nykcredit Mortgage Bank v Edward Erdman

Duty to inform your client of costs orders

It is important to be aware of your obligations as a legal representative. If the party you act for is not present at the time the costs order is made you have a duty to inform the party of the order and why it came to be made by the court (CPR PD 44, para 10.2). You must do this in writing no later than seven days after you receive notice of the order (CPR 44.8).

When considering whether you act for a party, the term includes any person who has instructed a legal representative to act for them or who is liable to pay the legal representatives fees eg an insurer or trade union (CPR PD 44, para 10.1).

If you fail to comply with the