Interim Applications: General Procedure, Summary Judgement, Interim Payment, Interim Injunctions, and Security for Costs

Question 1

what are interim applications?

Answer 1

application for orders or directions made by a party to the court in the interim period between commencement of proceedings and trial or before commencement of proceedings

(can be dealt with at a CMC or any fixed hearing)

examples:
- extending time for submitting evidence, SoC, etc.
- applying to amend a SoC under CPR 17/19
- making a CPR 18 request for further information
- requesting specific disclosure
- seeking permission to rely on expert evidence
- interim payment
- interim injunction
- summary judgement
- security for costs

Question 2

what are the obligations on parties when considering to make an interim application? (3)

Answer 2

1. parties must make an interim application as soon as it becomes apparent that it is necessary or desirable
2. parties must bunch their interim applications
3. parties must further the overriding objective and take a reasonable approach in considering whether a matter requires a court application = consulting opposing parties before making an application makes the matter less contentious

Question 3

what is the general procedure for making an interim application? (6 steps)

Answer 3

the ‘notice’ procedure:

1. issue application = Form N244 + file a draft order + pay fee + provide evidence (in the application, by referring to SoC, or by witness statement / affidavit)

court sets hearing

2. serve on the respondent the notice of application, evidence, and draft order = as soon as practicable after filing and not less than 3 days before the hearing
3. respondent can file and serve further evidence = as soon as possible
4. applicant can file and serve a further evidence in reply
5. statement of costs must be filed and exchanged by parties = as soon as possible and not less than 24 hours before the hearing
6. hearing takes place (unless the parties agree to or court decides on written submissions or parties file a consent order)

Question 4

when can an interim application be made without notice to the respondent? (7)

Answer 4

1. there is exceptional urgency (remedy needed immediately)
2. object of application will be defeated with the notice (element of surprise is needed)
3. overriding objective is best furthered by doing so
4. all parties consent
5. court gives permission
6. a court order, rule, or PD allows this
7. party does not have sufficient time to serve an application notice before a fixed hearing (but here they must still inform the respondent and the court of the nature of the application and reasons for it)

Question 5

what are the procedural safeguards in place for a without notice interim application? (5)

Answer 5

1. application must explain why no notice is given
2. applicant must give FULL AND FRANK DISCLOSURE = they must draw to the court’s attention arguments and evidence adverse to their position and in support of the absent respondent’s position
3. applicant must serve the respondent the application notice, evidence, order, and notes of the hearing as soon as possible after the hearing (whether the court granted it or not)
4. the court order must contain a statement of the respondent’s right to make an application to set the order aside - this must be made within 7 days of the order being served on the respondent
5. the court will likely set a second hearing date to decide whether the order should continue - the respondent can attend this and make representations

Question 6

what is a summary judgement claim?

Answer 6

a summary judgement claim allows the court to dispose of weak claims (whole claims or certain issues)

the claim or issue will no longer be heard at trial

Question 7

who can apply for summary judgement and when? (3)

Answer 7

(1) claimant = can apply after D filed an AoS or defence (or earlier with court permission)

(2) defendant = can apply at any time after proceedings commence

(3) court = can fix a hearing of its own initiative

(ideally = C/D should apply before or at the same time as filing directions questionnaire to avoid incurring unnecessary cost)

Question 8

what is the effect of a party lodging a summary judgement application?

Answer 8

creates a pause in proceedings:
- if C applies before D serves defence = time limit to file defence extended until after SJ hearing
- if D applies = D does not gave to file an AoS or defence until after SJ hearing

Question 9

what is the test for summary judgement? (2 ‘grounds’)

Answer 9

(1) The other party has no real prospects of success to claim / defend the claim or issue

AND

(2) There is no other compelling reason why the case or issue should be disposed of at trial

Question 10

what is meant by ‘no real prospects of success’ on an issue or claim for summary judgement applications?
how can this be defeated by the respondent?

Answer 10

no real prospect of success =
- the position is fanciful, imaginary or false
- ‘real’ means more than merely arguable

respondent =
- does not have to show the case will probably succeed but must only show that it has some chance of success even if improbable
- low hurdle to overcome = show the prospects of the claim / defence is not fanciful, imaginary, or false

respondent can do the following to defeat the application:
- argue the merits of its own case and cause of action (with reference to evidence)
- poke holes in the applicant’s claim / evidence

Question 11

what are examples of ‘compelling reasons’ why the case / issue should be disposed of at trial that a respondent to a summary judgement application can put forward to defeat it? (8)

Answer 11

• R needs more time to investigate the matter and further evidence is needed to establish material facts
• expert evidence is needed so the matter must be taken to trial
• parties argue different versions of material facts - the proper venue to decide on this would be at trial
• multi-party or complex litigation that requires trial
• key documents are in dispute and must be scrutinised
• D has a right to trial by jury (fraud alleged)
• the overriding objective requires trial - it is just for R to put forward its claim / defence especially considering it demonstrated a real prospect of being able to do so
• state it would be a waste of the court’s time and costs to grant SJ which would force R to issue a new claim against A

Question 12

what type of evidence should the applicant adduce in a claim for summary judgement?

Answer 12

• witness statements, documentary evidence, or expert evidence
• evidence the grounds of summary judgement = evidence that R has no real prospects of success and that there are no other compelling reasons why the case should be disposed of at trial
• identify any point of law or documentary provision that A relies on

Question 13

what is the procedure for a summary judgement application? (6 steps)

Answer 13

1. issue application = Form N244 + file a draft order + pay fee + provide evidence (in the application, by referring to SoC, or by witness statement / affidavit)

court sets hearing

2. serve on the respondent the notice of application, evidence, and draft order = at least 14 days before the hearing
3. respondent can file and serve further evidence = at least 7 days before the hearing
4. if the applicant wants to file further evidence in reply = must be at least 3 days before the hearing
5. statement of costs must be filed and exchanged by parties = as soon as possible and not less than 24 hours before the hearing
6. hearing takes place

Question 14

what potential orders can the court make after a summary judgement application which relates to the whole claim? (4)

Answer 14

1. dismisses the application
2. dismisses the claim (where D applies for SJ)
3. enters judgement on the claim (where C applies for SJ)
4. make a conditional order that the respondent can continue to trial subject to conditions like paying money into court (where court decides R has a prospect of success but it is improbable)

Question 15

what is an interim payment?
what is the purpose of applying for it?
who can make it?

Answer 15

• interim payment = a payment by the defendant to the claimant on account of damages, debt, or other sum (but not costs) which the defendant may be held liable to pay the claimant at trial
• only C can made the application
• purpose of application = C may wish to ask for interim payment to assist it financially in the interim period before settlement or trial (e.g., in a personal injury claim)
• the interim payment will not get disclosed to the trial judge until after it decides liability and quantum

Question 16

what is the test for interim payments?

Answer 16

ANY one of the following conditions under the CPR must be met:

1. D admitted liability to pay damages or other money to C
2. C obtained judgement against D for damages or other money to be assessed
3. The court is satisfied that if C went to trial, C would obtain judgement for a substantial amount of money against the defendant they are seeking payment from
   - (= meaning C will likely win on its merits AND C will likely be awarded a substantial sum)

AND

The court cannot make the order for more than A REASONABLE PROPORTION OF THE LIKELY FINAL JUDGEMENT

AND

The court must take into account any contributory negligence, set off, or counterclaims = this would impact the interim payment claimed if the amount is sufficiently great to reduce the defendant’s liability to either zero or by such a percentage that the interim payment which the claimant claims would be disproportionately too great compared to the final judgement

Question 17

at what stage in the proceedings is C allowed to make an interim payment application?

Answer 17

only after D filed the AoS or the period for filing the AoS expires (14 days after deemed date of PoC service)

Question 18

if the court grants the interim payment application, what amount is it restricted to granting the claimant?

Answer 18

• the court cannot make the order for more than A REASONABLE PROPORTION OF THE LIKELY FINAL JUDGEMENT
• the court must take into account any contributory negligence, set off, or counterclaims = this would impact the interim payment claimed if the amount is sufficiently great to reduce the defendant’s liability to either zero or by such a percentage that the amount the claimant claims would be disproportionately too great compared to the final judgement

Question 19

what evidence must the claimant adduce in an interim payment application? (6)

Answer 19

1. reasons for believing the conditions for making an interim payment are satisfied = D admitted liability to pay, C obtained judgement, or to satisfy the court that C would obtain judgement for a substantial sum at trial
2. the sum of money that C thinks will be the final judgement
3. the sum of money that C seeks via interim payment
4. items or maters for which the interim payment is sought
5. in PI claims = details of special damages and future loss
6. any other relevant matters

Question 20

what is the procedure for making an interim payment application? (6 steps)

Answer 20

C must request voluntary interim payment from D first (this can be made at any stage of proceedings including pre-action)

if D refuses or defends the claim, C can apply for interim payment (C must wait until after D serves AoS or time for service of AoS expires)

Procedure:

1. issue application = Form N244 + file a draft order + pay fee + provide evidence (in the application, by referring to SoC, or by witness statement / affidavit)

court sets hearing

2. serve on the respondent the notice of application, evidence, and draft order = at least 14 days before the hearing
3. respondent can file and serve further evidence = at least 7 days before the hearing
4. if the applicant wants to file further evidence in reply = must be at least 3 days before the hearing
5. statement of costs must be filed and exchanged by parties = as soon as possible and not less than 24 hours before the hearing

Question 21

can C make an application for interim payment without trying to request voluntary payment from D?

Answer 21

no - C must request voluntary interim payment from D first (this can be made at any stage of proceedings including pre-action)

if D refuses or defends the claim, C can apply for interim payment (C must wait until after D serves AoS or time for service of AoS expires)

Question 22

what is an interim injunction and what is the purpose of applying for one?

Answer 22

• interim injunction = equitable and discretionary order of the court requiring a party to do or refrain from doing a given act
• purpose = temporary measure to restrain the respondent from causing irreparable or immeasurable damage to the applicant by continuing or ceasing conduct that has led to the dispute
• usually made in urgency
• can last until trial or later
• (breach is contempt of court)

Question 23

what is the test the applicant must meet for an interim injunction? (3 considerations)

Answer 23

1. test = an interim injunction may be granted where it is just and convenient

up to the court’s discretion - so:

2. the court will consider the American Cyanamid Guidelines
3. the court will also consider equitable principles

Question 24

what are the American Cyanamid Guidelines which the court considers in exercising its discretion to grant an interim injunction? (3)

Answer 24

1. is there a serious question to be tried?
   - there must be a pre-existing cause of action
   - it must not be frivolous or vexatious
2. Damages would not / would be an adequate remedy for the applicant if the court refused the injunction (damages inadequate if R has no means to pay them, or the harm is irreparable, cannot be quantified, or is serious and likely to continue)
3. Damages would / would not be an adequate remedy for the respondent if the court granted the injunction and it transpires that the injunction was wrongly granted (A can meet the undertaking in damages; harm that R will suffer can be compensated)
4. Where does the balance of convenience lie and what carries the lesser risk of injustice? = The applicant would suffer a greater prejudice if the injunction was not granted than the respondent would suffer if it was granted (court considers broad range of factors + overriding objective)

Question 25

what equitable principles apply when the court is exercising its discretion to grant an interim injunction? (3)

Answer 25

1. the injunction will not be obtained if it would not serve a practical purpose
2. the court might refuse to grant it if the applicant has not come to court with clean hands
3. excessive delay may lead to a refusal of the application

Question 26

what is the procedure to bring an interim injunction application? (4 points to remember)

Answer 26

• same as a general interim application - except for:
• must be supported by written evidence setting out the facts to justify relief sought
• the court may require the applicant to offer a UNDERTAKING IN DAMAGES to the respondent for any loss sustained by reason of the injunction if it is later held that the application should not have been granted (e.g., proceedings are discontinued, injunction discharged before trial, or it is decided at trial that it should not have been granted)
• without notice procedure is used for interim injunctions (but remember safeguards)

Question 27

what is a security for costs application and who makes it?

Answer 27

made by a person in the position of the defendant who is concerned that the claimant will not be able to pay the defendant’s costs should the defendant successfully defend the claim and a cost order is made in the defendant’s favour

can be made by:
- D against C
- C against D in respect of a counterclaim
- third party against D in respect of a Part 20 claim

Question 28

what test must be satisfied to make a security for costs application? (2)

Answer 28

1. one or more of the prescribed conditions in the CPR must be satisfied
   AND
2. having regard to all the circumstances of the case, it is just to make an order (court has discretion)

Question 29

what prescribed conditions make up the first part of the test to apply for security for costs? (6 prescribed conditions)

Answer 29

one or more must be satisfied:

1. C is a resident out of the jurisdiction but not in a state bound by the Hague Convention (UK, EU, Mexico, Singapore, Montenegro - not USA)
2. C is an impecunious company and there is reason to believe it will be unable to pay D’s costs
3. C has taken steps regarding its assets that would make enforcement difficult (e.g., moved assets overseas or to third parties, or dissipated assets)
4. C changed its address since proceedings commenced with a view to evade consequences of litigation
5. C failed to give its address in the claim form
6. C is acting as a nominal claimant and there is reason to believe it cannot pay D’s costs

Question 30

what must the applicant show if it bases its security for costs order on the ground that the claimant is an impecunious company?

Answer 30

• there is reason to believe C will (not only may) be unable to pay D’s costs = via C’s accounts and witness statements that prove this
• D must only show it has reason to believe and not that the claimant is more likely than not to be able to pay
• D must show the amount of likely costs = via statement of costs that D incurred and will likely incur before trial

Question 31

what does the court consider when ascertaining whether it is just to make a security for costs order - as the second part of the test?

(7)

Answer 31

• C’s ability to comply with the order and pay and injustice caused = C may not be able to continue with the claim if required to pay (unjust) vs D being at risk on costs if no security is given (unjust)
• If D is using the application to stifle C’s claim and prevent it from pursuing it vs D using the application to mitigate a real risk that it will not receive its costs
• If C’s case is a sham or has little prospects of success (argue merits)
• If D’s actions have resulted in C’s financial difficulties
• Delay by D in making this application = application must be made promptly and as soon as the facts underpinning the application are known
• Admission of liability by D or substantial open offers the court is aware of (app less likely to succeed)
• overriding objective = would it be just and at proportionate cost to make the order?

Question 32

what is the procedure for security for costs?

Answer 32

same as for general interim applications

Question 33

what evidence must the applicant provide for a security for costs application? (4)

Answer 33

written evidence (via witness statement) for:
- the prescribed condition relied on = e.g., WS exhibiting accounts to show impecunious company is unlikely to pay
- the factors in exercising court discretion in determining if order is just
- likely costs to trial = e.g., WS exhibiting a statement of costs or referring to an approved costs budget
- amount of security requested

Question 34

if the court grants a security for costs order, how much is it allowed to grant?
what are the court’s considerations when deciding how much to grant? (5)
what form can the security be in? (4)

Answer 34

the amount of security is entirely within the court’s discretion and what it thinks just

court will take into account:

• D’s likely costs amount
• security can be for the whole action or up to a certain point in time e.g., disclosure
• the amount can cover costs incurred (including pre-action) and future costs
• a deduction can be made for the likely reduction upon assessment of costs or the possibility of settling
• delay by D = may reduce costs to only those incurred and not future costs

types of orders:

• payment into court
• payment to D solicitor
• bank guarantee
• undertaking to pay costs