Fixed costs ousted by agreement
In Turner v Cole, a regional costs judge held that an agreement between the parties ousted the fixed costs regime.
This was a road traffic accident which commenced in the portal but dropped out. It then became apparent that the value was over £25,000. The defendant made an offer of £60,000 stating ,“In addition we will pay your reasonable costs, to be assessed if these cannot be agreed”.
The claimant accept this offer on the basis that:
“… the Defendants will pay the Claimant’s legal costs to be (sic) detailed assessment if not agreed on the standard basis (and it is strictly accepted by the Defendants that costs will be paid on the standard basis and not in accordance with any portal, fixed costs or predictive costs basis).”
The claimant then served an informal costs schedule and bill of costs. The defendant then submitted that its insurer client, Tesco, had not agreed any other basis than fixed costs. Thus, here the court had to rule on the issue of contracting out of fixed costs.
The defendant, effectively Tesco Insurance Company, argued that it was not open to the parties to contract out of fixed costs. Here the court considered the cases of Solomon v Cromwell and Ho v Adelekun. The judge held that, despite the intentions lying behind fixed cost regimes in terms of certainty, following those two Court of Appeal cases, it is open to parties to contract out of the fixed costs regime by specific agreements. On the facts, the judge had “no hesitation” in concluding that the parties had, by concluded agreement, contracted out of the fixed cost regime; therefore, the claimant was entitled to her costs to be determined by detailed assessment on the standard basis.
No detailed assessment in fixed costs cases
In Nema v Kirkland, a High Court master struck out a claimant’s bill of costs as it was a fixed costs matter and should have been dealt with under the provision dealing with disputes relating to disbursements in fixed costs cases, contained in CPR 36.20(11), where a Part 36 offer has been accepted, as here.
Here, in a fixed costs case, the claimant accepted the defendant’s Part 36 offer. However, there arose a dispute as to disbursements, being counsel’s fees and engineers’ fees, resulting in the claimant issuing detailed assessment proceedings.
The court held, at paragraph 29, that:
“By unambiguously limiting a claimant to fixed recoverable costs and permitted disbursements, CPR 36.20 is intended to eliminate the need for detailed assessment proceedings. The language of the rules indicates that cases subject to fixed recoverable costs fall within self-contained provisions of CPR 45 and generally outside the scope of detailed assessment.”
In Mughal v Samuel Higgs & EUI Limited (Senior Courts Costs Office) (Unreported) (6 October 2017), a master struck out a notice of commencement for the same reason. The master explained that where, following acceptance of a Part 36 offer, fixed costs are recoverable under Section IIIA of CPR 45, there can be no deemed order for costs under CPR 44.9, which applies where a right to costs arises under CPR 36.13(1). However, CPR 36.13(1) is expressly subject to CPR 36.20, which provides that a claimant’s entitlement to costs and disbursements, following acceptance of a Part 36 offer, is dictated by Section IIIA of CPR 45. In the master’s view, that is quite inconsistent with the existence of a deemed order for costs on the standard basis, as is the requirement that any dispute be resolved by an order under CPR 36.20(11): “The logical conclusion is that where CPR 36.20 applies, CPR 36.13(1) is disapplied.”
Regarding the procedure to be followed under CPR 36.20(11), the master determined that, although CPR 36.20(12) refers expressly to costs payable to a defendant, it is evident from that provision that, under CPR 36.20(11), the court is required to make an order which determines the amount of costs due, whether to a claimant or a defendant. That is neither summary assessment nor detailed assessment. Rather, it is a different, self-contained procedure. CPR 44.6, which excludes orders for fixed costs and is subject to “any rule, practice direction or other enactment”, and the provisions of Practice Direction 44 which address the choice between summary and detailed assessment, have no application. According to the master, any issues would be limited, as would the amount in issue. On the master’s view, there was no need for a judge who had dealt with the case to deal with the costs dispute: “… as Mr Hogan says, where settlement has taken place under Part 36, it is unlikely that a judge will have dealt with the case.”
The only possible scenario in which there could be a detailed assessment in a fixed costs case is CPR 45.29J, the escape clause, where the whole point is that fixed costs should not apply:
“31. The only conceivable situation in which it would be appropriate for a claimant to commence detailed assessment proceedings following the acceptance of a defendant’s Part 36 offer in a case to which CPR 45, Section IIIA applies, would be where a claimant seeks costs exceeding fixed recoverable costs under CPR 45.29J. It is not suggested by either party that this is such a case.”
Comment
Quite right.
In Ivanov v Lubbe, the court, on appeal, held that where costs under the fixed costs regime could not be agreed following its acceptance of a Part 36 offer within the relevant period, the correct procedure was to issue a Part 23 application, rather than seeking detailed assessment.
Here, the claimant had accepted the defendant’s Part 36 offer in a road traffic accident claim and, under CPR 36.20, the claimant was entitled to the fixed costs in Section IIIA of CPR 45. The parties agreed costs except the issue fee, which the defendant questioned, contending that the claimant was, or might have been, entitled to fee remission and it was not reasonable for him to have incurred it. The claimant issued a Part 23 application for an order that the defendant pay the fee.
The deputy district judge dismissed the application, finding that, where CPR 36.20 was engaged, a deemed costs order arose so that a dispute over recoverable disbursements could only be determined by serving a bill of costs and commencing detailed assessment proceedings. The claimant appealed.
The circuit judge noted that CPR 36.20 created a regime in which the claimant was entitled to costs, and those costs were quantified using Tables 6B-6D. Since the costs were fixed, there was no need for an assessment of costs or prerequisite for a deemed costs order. Accordingly, he held that there was no deemed costs order made under CPR 36 in a fixed costs case, so a party seeking to invoke the court’s costs jurisdiction had to make a Part 23 application.
Regarding the court fee, the circuit judge considered several cases which held that the claimant could elect to make a claim against the tortfeasor rather than relying on alternative sources of funding, such as the state or insurance. He concluded that there were strong policy grounds for finding that it was not unreasonable for a claimant to preserve the public purse and direct the cost of wrongdoing onto the tortfeasor. Accordingly, he ordered the defendant to pay the issue fee.
Road traffic accident portal conclusion
In Bateman v Devon County Council (Plymouth County Court) (Unreported) (2 September 2019), a circuit judge held that the portal and fixed costs process did not apply to a case where a motorist was injured due to a defective road. It was common ground that the road traffic accident portal did not apply as the defendant was not a highway user. The issue was whether the public liability portal applied.
At page 593 of my book, Personal Injury Small Claims, Portals and Fixed Costs, I suggested that such claims were not covered as that portal excludes claims “… for damages arising out of a road traffic accident (as defined in paragraph 1.1(16) of the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents).”
Paragraph 1.1(16) reads:
“(16) ‘road traffic accident’ means an accident resulting in bodily injury to any person caused by, or arising out of, the use of a motor vehicle on a road or other public place in England and Wales unless the injury was caused wholly or in part by a breach by the defendant of one or more of the relevant statutory provisions as defined by section 53 of the Health and Safety at Work etc Act 1974.”
Here, the court held that such a matter does not go into either of the portals and is therefore not subject to fixed recoverable costs. The court conducted a thorough examination of the case law in relation to the definition of a road traffic accident in other contexts. There is no binding authority on this particular point.
