Costs-shifting in interim procedural applications

Civil proceedings, whether in a court or tribunal, typically start with pleadings, where each side sets out succinctly, in documents drafted by each side's barrister, what the party claims has happened and what legal remedy is sought (e.g. payment of money or possession of land) and why. The culmination of the proceedings is a trial at which a judge will consider the evidence (both documents and witness evidence) and, after hearing arguments from each side's barrister, decide who is entitled to win the case.

The period between the pleadings at the start, and the trial at the end, can last for many months as there are a number of stages which each party must complete by deadlines. During that period either side may make one or more interim applications to the court or tribunal. 

In some cases it might be appropriate to make an application for an "interim remedy" - generally an order preserving the the status quo until trial. So if a defendant is about to chop down trees on a site and commence construction work, and the claimant starts proceedings claiming that that would be in breach of a restrictive covenant, the claimant may make an interim application for an order preventing, until the trial, the defendant from proceeding. An interim remedy is necessary because otherwise, if the claimant wins at trial, it will be too late because the trees will have already been cut down.

Interim application for "interim remedies" are needed in a minority of cases but a more common form of interim application is an interim procedural application. Many interim procedural applications concern the provision of information or documents by one party to the other in advance of the trial. One of the usual directions given by a court or tribunal is that each party must disclose relevant documents, such as photos, letters and emails, to the other. As a minimum the directions will require each party to provide the other with copies of (a) documents it proposes to rely on at trial and (b) any document it is aware of which helps the other side's case. Before a party starts proceedings (or decides to defend proceedings) it will, of course, have collected together some documents and sought legal advice but those may not be all the relevant documents it has. Particularly if it is a large organisation it may have many millions of documents and will have to take a pragmatic view about how long, and where, it searches for documents. The other side may want it to search in particular places for documents to see if documents are turned up which help the other side's case, but the organisation may not want to spend time and money doing that. So the other side may have to make an interim application for an order that the organisation must carry out a particular search and disclose any relevant documents uncovered.         

In tribunals the usual method of making an application is for a party to write to the tribunal, with a copy to the other party, requesting the tribunal to make a particular order and giving the reason why the party believes that the tribunal should do this. The other party then has a limited time to write to the tribunal if they wish to object, and the tribunal will then make a decision "on the papers" - i.e. without any hearing taking place.

Courts do sometimes decide interim applications "on the papers" without any hearing but usually the courts treat an interim application as a "mini-court case" and hold a hearing at which each side's barrister will argue for or against the order being made and the court will then making a decision. Usually the court will order the loser of the interim application to pay the other side's legal costs of the interim application. This is called "costs shifting". This is irrespective of which side goes on to win in the end at the eventual trial. The courts expect a party, before making an interim application, to write to the other party and ask them voluntarily to do whatever is requested before making an interim application to the court for a compulsory order. If this is not done, whilst the court might still make the order sought, it might penalise the successful party by ordering them to pay the other party's costs on the ground that the application was made prematurely by the successful party.

The fact that losing an interim application can be costly unfortunately means that sometimes, particularly if the parties have solicitors, they may engage in gamesmanship. A party's solicitor may "try their luck" by writing to the other side asking them to do something voluntarily, calculating that the second party will not want to risk losing an application and being ordered to pay costs. And even if the second party's solicitors decide to refuse what they regard as an unreasonable request, calculating that the first party will not in fact apply to the court (or that if they do the court will not grant their application) the second party may still feel that they need to set out in some detail in a letter why they do not regard the request as reasonable. This is out of concern that, if they do not set out their reasons in detail, the court might, if an application is made which is unsuccessful, perhaps still not award the second party their costs on the grounds that the second party could have avoided the application from being made by setting out their reasoning in more detail in correspondence with the first party.

This is one reason why it is generally more difficult to predict the likely cost of court proceedings as compared to tribunal proceedings. Usually tribunal proceedings proceed through the usual steps without any interim applications being necessary and, if any interim applications are made, they are dealt with "on the papers" without greatly adding to overall costs. By contrast interim applications in courts tend to be costly and it can be difficult to predict how many might be made and on whom the cost of any interim application will fall. And this very uncertainty can encourage parties to write detailed letters prior to interim applications being made so that even the mere prospect of an interim application can generate significant cost even if, in the end, no application is actually made.               

This page was lasted updated in January 2020          Disclaimer