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Blog: Interim Award of Expenses

 

 

In England, the practice of receiving an award of expenses on account has been routine practice. Unfortunately, this hasn’t been the case in Scotland. The authority for England was laid down in the case of Mars UK Ltd v Teknowledge Limited, which held that where a party is successful the court should normally make an order for an amount to be paid on account. Whilst this amount would be a lesser sum than the likely full amount, it would steady up cash flow until the full award is received.

 

Ultimately, the court holds direction in granting such an order but when doing so the court must take into account all of the circumstances of the particular case. Although, the overriding factor in exercising that discretion has been the injustice of making a party wait for the sums to which they are ultimately entitled to.

 

In Scotland, there have only been four occasions recently where orders for expenses on account have been made. It had also been the case prior to the decision of Higherdelta v Covea Insurance that such order would only be granted where there were ‘special circumstances’ which required the order to be made. However, in Higherdelta v Covea Insurance, it was held that it was incorrect to hold that ‘special circumstances’ were required. The whole argument was one of injustice which can now be seen to becoming more in line with the practice in England. This has so far only been relative to commercial actions in Scotland but there is no reason why this has to be restricted.

 

The impact of this decision could now set the way for more awards on account to be granted. This would steady up cash flow problems for parties raising court action as parties can often find themselves having to meet many outlays at the very outset.

Credit to: Caitlin McNiven, Trainee Solicitor, (c) TCH Law

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