Once fixed costs always fixed costs?

Articles | Thu 29th Oct, 2015

If there is one Judgement from the last few weeks that a PI practitioner dealing in modest value claims would be well advised to read and absorb it is the Judgement of HHJ David Grant on appeal from District Judge Salmon in the case of Qader and others v Esure Services Limited EWHC B18 (TCC)  It considers in some detail the remit and operation of the amendment to the CPR in rule 45.29A (found in Section IIIA of Part 45) relating to application of the fixed costs regime to claims which begin but no longer continue under the RTA or EL / PL Pre- Action Protocols. Put simply, since the 31st July 2013 when the amendment came into force, we have had a fixed costs regime applicable to a great many lower value multi track claims that arrived with very little fanfare and has gone largely unnoticed since.

The practical impact of this Judgement will be to force a change to what has become the common practice of assuming, wrongly, that the fixed costs regime does not operate in relation to multi track cases regardless of their value. If a claim starts under the RTA or EL/ PL protocol and is valued at under £25,000 the fixed costs regime will continue to apply once it is allocated to the multitrack unless and until the Court considers that, in accordance with CPR rule 45.29J, there are exceptional circumstances permitting it to consider a claim for more than fixed recoverable costs. Consideration of the application of CPR rule 45.29J may well be left to the end of proceedings and even then offers no guarantee of the award of full or reasonable costs (just “an amount of costs greater than fixed recoverable costs”).

In the coming months it will be interesting to see how Courts deal with the issue of “exceptional circumstances”. In the meantime it would be unwise   to assume that a simple allegation of fraud in a road traffic claim will be enough. It will take some time and almost certainly an appeal or two to the higher echelons of the court system for any coherent approach to become established. The opinions of the two Judges within this case may have differed. District Judge Salmon at first instance observed that a fraud case lasting 2 days “may well” be such a case where exceptional circumstances could be found whereas His Honour Judge David Grant, at appeal, applied a whole paragraph of his Judgement to casting doubt on the level of complexity introduced to a case by a factual issue of whether or not a driver applied his brakes to induce an accident.

THE APPEAL

This appeal concerned a claim for damages for personal injury following a road traffic accident. The Judgement does not go into detail as to the claim at the RTA protocol stage but it can be assumed that allegation that the Claimant had deliberately induced the collision, ultimately set out in the Defendant’s Defence, would have made compromise unlikely.

The Claim was issued under the part 7 procedure and the value pleaded as in excess of £5,000.00 but not in excess of £15,000.00. The matter was allocated to the multitrack by Deputy District Judge Nadarajah and listed for a CCMC. The notice of hearing referred the relevant provisions for filing costs budgets which the parties duly complied with. It may be reasonable to assume that the parties thought that the claim had broken free of the shackles of the fixed recoverable costs regime by virtue of the fact that it was no longer proceeding under the RTA protocol or Stage 3 procedure; had been allocated to the multitrack; a CCMC had been listed and they had filed their costs budgets.

District Judge Salmon who heard the case on 3rd June 2015 had other ideas.

He ordered that “CPR 45.29A Fixed Costs will apply to the Claimant’s costs. Costs Management does not apply in this case” and refused permission to appeal. The basis for refusing permission was that the CPR 45.29A is clear on its face that determining factor deciding whether fixed costs should apply is value not track and that fixed costs on the multitrack were clearly contemplated in CPR rule  3.12. He did note, however, that the court was allowed depart from that regime in exceptional circumstances under CPR rule 45.29J and accepted that a fraud case lasting 2 days may well be such a case

The Claimant applied for permission to appeal and the permission hearing and appeal were heard together by HHJ David Grant sitting in the County Court at the Birmingham Civil Justice centre.

 The Claimant was given permission to appeal. The appeal was made on 3 grounds:

(1)    Failure to interpret CPR rule 45.29A in a purposive manner (purposive being to interpret the Jackson reforms): arguing with reference to the Jackson report that “there was no room whatever for doubt that the fixed recoverable costs regime was implemented only in relation to the fast track”.

(2)    Failure to interpret CPR rule 45.29A on accordance with the overriding objective.

(3)    Applying rule 45.29A in contravention of section 3 of the Human Rights Act 1998 and article 6 of the convention.

In dismissing the appeal on all 3 grounds HHJ David Grant considered the text of CPR rule 45.29A and concluded that it was quite clear and required no interpretation either purposive or in accordance with the overriding objective. He expressed the view that to interpret it in that manner proposed by the Claimant went beyond what could be achieved through the median of interpretation and would amount to a re-casting of the rule. In rejecting the submission that the Jackson LJ intended for the fixed recoverable costs  provisions to be restricted to the fast track he referred to paragraph 2.10 of Chapter 16 of his final report in which he contemplates  “….the possibility of introducing a scheme of fixed costs…into the lower reaches of the multi-track” . HHJ David Grant concluded that by the amendment in CPR rule 45.29A “such a scheme of fixed recoverable costs has indeed been introduced into the lower reaches of the multi-track certainly as regards cases which began via either the RTA Protocol or the EL/Protocol”.

Dismissing the appeal on the third ground the Judge observed that the provisions of CPR rule 45.29J (allowing the court to depart from the fixed costs regime in exceptional circumstances) provided a material safeguard against injustice even if consideration of whether to depart from the regime only occurred at the end of proceedings.

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