The recoverability of fixed costs in Fast Track trials by Laura Hibberd

Articles | Fri 6th May, 2016

Manuel Dos Santos Mendes v Hochtief (UK) Construction Ltd [2016] EWHC 976 (QB).

This case concerned the interpretation of Part IIIA of CPR Part 45 which sets out the regime for fixed costs, in particular r45.29A which deals with Fast Track fixed costs at various stages of proceedings. This rule applies to claims which begin under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (“the RTA Protocol”), now entering its fourth year in effect, but then do not continue under that Protocol because liability is denied.

Background

Mr Manuel was involved in a motor accident on 7th August 2014. A claim was notified under the RTA Protocol on 26th August 2014, liability was then denied by the defendant causing the claim to exit the portal process.

Proceedings were issued in January 2015 and was thus subject to the fixed costs set out in Part IIIA of CPR 45 because this is a case issued after 31 July 2013. The case was allocated to the Fast Track in due course and in October 2015 the parties were notified that a one-day trial had been listed for 11 December 2015. On that day both parties attended, represented by counsel, and they twice indicated to the Recorder hearing the case that a settlement might well be reached if given some time. This did in fact happen, and the Recorder was presented with a consent order to resolve the case.

The issue of costs then arose, with the Recorder being invited to assess costs in line with Part IIIA. He awarded the two elements of fixed costs as set out in the CPR: £2,655 and 20% of the damages. However, the Recorder refused to award the fixed trial advocacy fee on the basis that the case had settled before the final contested hearing had commenced and thus no trial advocacy fee was recoverable.

Appeal

The issue for appeal was whether a trial advocacy fee recoverable under the fixed costs scheme if a case settles on the day of trial but before the trial actually commences.

Rule 45.29C sets out Table 6B which provides the recoverable costs for the various stages of litigation in cases which do not continue under the RTA Protocol. Notably, ‘trial’ is defined as ‘the final contested hearing’ and Part B of the Table (if proceedings are issued under Part 7, but the case settles before trial) refers to ‘on or after the date of listing but prior the date of trial’. It is the interpretation of Part B and Part C in Table 6B which required analysis and interpretation by Coulson J.

One argument put forward by the defendant was that settlement in this case had taken place before trial, as the trial had not in fact commenced (which all parties agreed was correct), and therefore no trial advocacy fee could be recoverable. The defendant suggested that the court use Sir Rupert Jacksons’ Final Report headings of ‘post-issue, pre-allocation’, ‘post-allocation, pre-listing’, and post-listing, pre-trial’ in interpreting the different stages in Table 6B. However, Coulson J rejected this idea as “wholly illegitimate”.

Conclusion

Coulson J began his analysis by commenting that the final column hearing in Part B contained a typographical error: it is missing the word ‘to’ in ‘prior [to] the date of trial’ for it to be commensurate with the rest of the table. It was accepted by Coulson J that the case could not properly fall under Part B of the Table because it did not settle prior to the date of trial, it settled on the date of the final contested hearing.

There were two ways of approaching Table 6B in light of this issue: either there was a void in the CPR, in that this situation has not been dealt with at all in the CPR, or costs should be assessed under Part C of the Table. It was held that the latter approach was the right one. Otherwise there could be the untenable situation that neither Part B nor Part C applied and thus nothing at all would be recoverable by way of fixed costs if a case settled on the date of the trial. Such an interpretation would have made a nonsense of the very intention of the rules, which should be given a “purpose construction”. It was considered to be a strain of the language of the CPR to interpret ‘disposed of at trial’ to include the present circumstances.

Indeed it would be artificial to distinguish between “preparation of advocacy and attendance at trial” and “actual performance of advocacy”. Moreover, it would be counter-productive if advocates were not able to recover a trial advocacy fee if the case settles at the door of the court. Such an approach would remove all incentive to settle cases at that stage. The “interests of justice would be better served if the advocate was not penalised financially for negotiating a settlement at the door of the court”.

For those reasons the application for permission to appeal and the appeal itself were allowed. It is perhaps surprising on first blush that such a situation arose, given the fairly commonsensical approach and analysis taken by Coulson J. However, the trial judge was without an up-to-date White Book at court and neither advocate had authorities to deal with the point. The latter is perhaps not so important as Coulson J was taken to several authorities in the appeal hearing but he held none of them affected his interpretation of the rules.

This case perhaps comes as some comfort for both advocates and solicitors that the fixed fees are recoverable in full as per Table 6B, Part C, should a case settle at the court door.

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