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Payment on Account of Costs Pending Taxation

July 12, 2017

In the wake of President Kelly’s Practice Direction of 28 March 2017 concerning the payment of costs on account, recent judgments further illuminate the Court’s approach to the interim payment of costs.


On 28 March 2017, Judge Peter Kelly, President of the High Court, issued a Practice Direction entitled “Payment on Account of Costs Pending Taxation”.  Practice Directions are issued from time to time by the judiciary to complement existing Court Rules.  The new Practice Direction is designed to deal with long delays experienced by many practitioners in receiving payment of legal costs following the conclusion of a case.  A party who has successfully obtained its costs following an action may now apply to the Court for a direction that a payment be made on account to discharge the costs owing pending Taxation.  Taxation is a process by which legal costs are independently measured.  Since 24 April 2017, when the Direction became effective, it has been considered in a number of judgments. In particular, the paying party (who would ordinarily have not been required to make any payment on account until after the Taxation process had completed) has disputed the amount of legal costs which have been requested to be paid on account.

Recent Developments

In Brennan –v- DePuy and HSE and Heeney –v- DePuy and HSE, the Plaintiffs in both cases submitted Bills of Costs following the conclusion of the proceedings.  These proceedings related to personal injuries actions taken by the Plaintiffs for medical negligence on the part of the Defendants in the manufacturing of defective artificial hips.  In Brennan, the Bill of Costs submitted by the Plaintiff’s Solicitors sought a professional fee (exclusive of VAT) of €140,250.  In Heeney the Plaintiff’s Solicitors furnished a short form Bill of Costs amounting to €663,421(inclusive of VAT).  In both instances the Bill of Costs included brief fees for Junior and Senior Counsel.  Counsel for the Plaintiffs in both cases argued that given the complexity of the issues, namely the Defendants’ reliance on the Liability for Defective Products Act 1991 and the fact that each case was the first case of its type to actually run before a Court in Europe, the Taxing Master would be satisfied that brief fees were appropriate and thus due and owing.

Dealing with both cases, Judge Barr acknowledged that it is not the duty of the Court to opine on what might and might not be an appropriate professional fee for the Plaintiff’s solicitor and neither is it the Court’s duty to determine whether the complexity of the case would justify Junior and Senior Counsel brief fees.  However, given the new Practice Direction, Judge Barr made an Order for payment on account in the sum of €150,000 in Brennan and €200,000 in Heeney.  He stressed however that the issue of costs was a matter more properly within the jurisdiction of the Taxing Master and therefore cautioned that the fees may be subject to change.

As a final note, the decision of Judge Keane in Da Silva and Ors –v- Rosas Construtores SA and Others is noteworthy.   It makes clear that unless you apply for payment of costs on account at the time the case is concluded or you have obtained liberty to apply to the Court if needed, you will not be able to seek a subsequent direction for payment on account of costs because at that stage the Court will be functus officio.  Essentially, the Court’s authority will have come to an end.  Therefore, we now expect that when a successful party obtains an Order for costs either a direction for payment on account in the first instance or liberty to apply in anticipation of making such an application at a future date will be sought.