LEXLAW Solicitors & Barristers
HMRC’s use of Account Freezing Orders has risen 170% over the past 3 years. An AFO allows HMRC to quickly freeze funds in accounts suspected of criminal activity for up to two years. The number of AFOs, easily obtained by HMRC, has surged from 125 in 2022 to 341 in 2024, with the value of frozen assets rising massively. AFOs pose catastrophic risks for innocent businesses caught up in HMRC’s net.
Unless Orders are judicial directives that can force a non-compliant party to comply with a previous court order. Specifically, in the context of outstanding costs orders, Unless Orders can help ensure financial obligations are paid out.
Deputy Costs Judge Joseph in the case of Coram v D R Dunthorn & Son Ltd [2023] EWHC 731 (SCCO) affirmed that the costs of instructing leading counsel for a three-day trial were not recoverable as they were deemed unreasonable and disproportionate for a case with a maximum value of £115,000 (settled for £75,000).
This latest High Court case again demonstrates the pitfalls for litigants who unreasonably refuse to engage in Alternative Dispute Resolution such as mediation to resolve issues. Parties that fail to do so risk be punished by the court when it comes to costs.
In a multi million pound breach of contract case, where there was no substantive defence to the claim and the Defendant accepted summary judgment and liability for the Claimant’s costs, the High Court held that a Claimant’s Part 36 offer to accept only 0.3% less than the full sum being claimed was a “genuine offer to settle” under CPR 36.17(5)(e).
If a party completely foregoes mediation will that party be punished in costs? The High Court judgment highlights that although the court cannot compel parties to mediate, an unreasonable refusal to do so is likely to result in costs penalties for a defaulting party. The costs risks of unreasonably refusing to mediate or not responding to a mediation proposal may be severe.
All solicitors have a duty to advise their clients about alternative dispute resolution (ADR), including mediation. Along with the ADR requirements in the pre-action protocols, the CPR and court schemes, overall, mediation is an option that must be considered by parties both before and during litigation (and a failure to do so can lead to costs penalties).
A litigation court order for indemnity costs means the party that lost has been ordered to pay a higher costs contribution to the winner than is standard. Judges…