The Court of Appeal has this week handed down two rulings on costs and protocols in Bird v Acorn Group Ltd [2016] EWCA Civ 1096 and Qader & Ors v Esure Services Ltd & Ors [2016] EWCA Civ 1109.
The first of these decisions, Bird, concerned a public liability claim which was withdrawn from the portal due to the defendant’s failure to respond. Liability was then admitted by the defendant’s insurer shortly afterwards. The claimant then submitted medical evidence and details of his special damages with a view to settlement. However, nothing was agreed and proceedings were issued. The defendant failed to acknowledge judgment and the claimant obtained default judgment at which point the claim was transferred from the Money Claims Centre to Birkenhead for assessment of damages where it was listed for a disposal hearing but subsequently settled.
However, costs were not agreed, there was a dispute as to which column within the table 6D part B (below) applied:
The defendant submitted that column 1 should apply but this was rejected by Lord Justice Briggs who found that the listing for a disposal hearing was a listing for trial and therefore column 3 applied. In coming to this conclusion he noted that listing a case for disposal has the intention of disposing of the case at first instance and as such triggers the claimant to prepare and serve evidence. He stated:
‘It seems most unlikely that the rule committee can have intended to leave the claimant to the much lower column 1 level of recovery after such a settlement, having done all of the work necessary to achieve finality at the disposal hearing, and being entitled to fixed costs equivalent to column 3, plus the trial advocacy fee, if the matter proceeded all the way to a disposal hearing’.
It was put to LJ Briggs that such an approach would remove the incentive for insurers to settle. However, this was also rejected as LJ Briggs said that settlement would still save insurers their own costs of preparing for a hearing and the advocacy fee.
He also rejected the argument that the columns were intended to be moved through in succession and therefore it was not right that column two would be skipped over. He said:
‘The fact that column 2 is jumped over because there is no intermediate allocation to the fast-track seems to me to be just one of those events which means that the three columns will not always be triggered in succession. But that by no means undermines the good sense of a conclusion that, once there has been a listing for a disposal hearing, column 3 is triggered’.
It has been suggested that defendants can ward against this route if they make better offers at stage 2 under the EL/PL protocol, or make better post-exit, pre-issue part 36 offers which will encourage settlement or give the defendant better protection.[i]
In another claimant friendly decision LJ Briggs, in Qader, considered whether cases that exit the RTA and EL/PL protocols and then proceed on the multi-track are subject to the fixed recoverable costs in Part 45. [ii]
The case concerned two conjoined appeals where RTA claims had left the protocol and been assigned to the multi-track due to allegations of dishonesty.
Part 45 r.45.29B applies the fixed costs regime to all cases which start within the relevant protocols but no longer continue under them and does not distinguish between those that proceed onto the fast-track and those that proceed onto the multi-track.
LJ Briggs noted:
‘the claimants in each case, and their solicitors, face the unattractive prospect of pursuing their claims and resisting serious allegations of dishonesty, at trials likely to last well over one day but upon the basis of a fixed costs regime which, as will appear, was plainly designed to be suitable only for fast-track cases’.
He concluded:
‘[…] I have come to the conclusion that section III A of part 45 should be read as if the fixed costs regime which it prescribes for cases which start within the RTA protocol but then no longer continue under it is automatically disapplied in any case allocated the multi-track, without the requirement for the claimant to have recourse to Part 45.29J, by demonstrating exceptional circumstances’.
Briggs relied upon a Ministry of Justice response to consultation in February 2013 that said: ‘It has always been the government’s intention that these proposals apply only to cases in the fast track and if a case falling out of the protocols is judicially determined to be suitable for multi-track, normal multi-track costs rules will apply’.
As such he determined that there was no evidence that the government altered its policy in relation to multi-track cases falling outside the fixed costs regime and no evidence that the CPR committee purposely decided to adopt the opposite approach. Although he did say that the drafting of r.45.29J was an anomaly and should be addressed by the committee as soon as possible.
These decisions have been much awaited and will allow for the resolution of thousands of cases that have been stayed until the ambiguity in the provisions regarding fixed recoverable fees for portal drop out claims had been resolved.
The judgment in Bird can be accessed here.
The judgment in Qader can be accessed here.
Neil Rose, ‘Court of Appeal Backs Claimants Over Fixed Costs in “Drop-Out” Portal Cases’ (Litigation Futures 14 November 2016)< http://www.litigationfutures.com/news/court-appeal-backs-claimants-fixed-costs-drop-portal-cases> accessed 17 November 2016.
[ii]Neil Rose, ‘PI Claims That Exit Protocols For Multi-Track “ Not Subject To Fixed Costs”, Says CA’ (Litigation Futures 16 November 2016)< http://www.litigationfutures.com/news/pi-claims-exit-protocols-multi-track-not-subject-fixed-costs-says-ca> accessed 17 November 2016.