In the case of  Cleveland Bridge UK Ltd v Sarens (UK) Ltd [2018] EWHC 827 (TCC), the Claimant had won their case at Trial and costs were payable by the Defendant.

In determining the level of interim payment to be requested, the Claimant used their agreed costs budget as a starting point, adjusting the same to take into account costs never incurred and two Applications which the Defendant had accepted that they must pay costs in respect of. An interim payment of 90% of the adjusted total budget figure was requested from the Defendant. The Defendant stated that they should not be required to pay more than 60% on account.

The Defendant had two main reasons for their objection to the Claimant’s request. Firstly, the hourly rates claimed within the Claimant’s budget, which the Defendant believed were excessive and that there would be a good reason to reduce the same at Detailed Assessment. Secondly, the Defendant was of the opinion that the Claimant would not recover the entirety of their incurred costs at Detailed Assessment. The reason for this contention being that there were costs claimed within the incurred costs which the Defendant believed did not relate to the proceedings in question.

Miss Joanna Smith QC, presiding, accepted

“both the desirability of consistency of approach and the undesirability of the court engaging in any form of shadow detailed assessment when seeking to determine an application for payment of costs on account.”

She also accepted that where there is an approved costs budget, it is appropriate to take the approved estimated/budgeted costs figure as the starting point when seeking to determine an appropriate payment on account in respect of those costs. In the case of MacInnes, Coulson J decided that the maximum deduction in such a case should be 10%.

In relation to the incurred costs, she did not accept that the above approach should be adopted and stated that the Court must determine in every case a reasonable sum by reference to an estimate, which will be dependent upon the circumstances. These circumstances included the fact that there had not yet been a Detailed Assessment and there was therefore an element of uncertainty. Miss Smith QC therefore awarded 70% of the incurred costs in this case. Given that neither party had succeeded entirely, the parties were ordered to bear their own costs of the Application.

Helen Coates