Everyone has played Monopoly and enjoyed the cash bonus for passing GO! How about receiving your cash bonus for failing to comply? Well CPR 45.24 allows you to do just that.
When a party to proceedings fails to comply with a rule or requirement there are normally sanctions which run alongside such a failure. When one visits the fixed costs provisions of CPR 45, the ace up their sleeve for costs arguments is a party being limited to fixed costs in accordance with one of the many rules within this part. But when we look at CPR 45.24 specifically, it all becomes a little bewildering.
It has been 19 months since the Court of Appeal handed down its judgment in Williams v Secretary of State for Business, Energy & Industrial Strategy. It held that a restriction to fixed portal costs where a party had failed to comply with that portal at all, or had not continued with it, only applies if a judgment has been entered (paragraph 64). Surely, that cannot be the intention of the rule?
Upon examination it seems that is indeed the intention. CPR 45.24 states:
“(2) Subject to paragraph (2A), where a judgment is given in favour of the claimant but…”
I have been left wondering how that can be the interpretation of any drafter where the rule is meant to be punitive to the party who fails to abide by the relevant protocol. In fact, the paying party within the Williams case pointed out just that, but the Court of Appeal rejected that it was an obvious drafting error in quite clear terms. It stated at paragraph 64: “There is no drafting error, obvious or otherwise, in the CPR.” Unfortunately, the reality of the situation allows the mischievous to prosper.
The rule, which came into force in 2013, was seen as a decisive mechanism for ensuring that a receiving party could not simply decide the protocol was not for them and proceed to collect standard basis costs. Six years on and we are still scratching our heads as to why there is a lack of punitive measures in place.
In my opinion, the answer to the question as to whether there has been a drafting error has to be a resounding yes. It seems that the drafter has missed the point and requirement of the rule entirely. It is in relatively limited cases that a judgment will feature to allow the consequences of CPR 45.24 to take hold. Where a defendant has a justifiable defence, judgment will never feature, but a claimant who ignores their obligation to utilise the protocol correctly will feel no ill effects. That, in my opinion, is not justice. It really does seem that justice is a dish served very cold indeed.
Saving grace?
One beam of hope that came from Williams is that CPR 44 is here to stay and still packs a punch. A party can still revert to conduct arguments and the court can order that a party be limited to fixed portal costs due to such conduct. There will still need to be a finding by the court that a party acted unreasonably by not commencing their claim under the relevant protocol. As such, evidence is paramount. It will hinge on a correct valuation, and reasoning being furnished by the claimant before any presiding costs judge.
One other avenue is the wording of the protocols themselves. Paragraph 7.59 of the EL/PL Protocol and paragraph 7.76 of the RTA Protocol state:
EL/PL
“Where the claimant gives notice to the defendant that the claim is unsuitable for this Protocol (for example, because there are complex issues of fact or law or where claimants contemplate applying for a Group Litigation Order) then the claim will no longer continue under this Protocol. However, where the court considers that the claimant acted unreasonably in giving such notice it will award no more than the fixed costs in rule 45.18.”
RTA
“Where the claimant gives notice to the defendant that the claim is unsuitable for this Protocol (for example, because there are complex issues of fact or law) then the claim will no longer continue under this Protocol. However, where the court considers that the claimant acted unreasonably in giving such notice it will award no more than the fixed costs in rule 45.18.”
However, the above merely points clearly to the injustice of the rule. As was submitted by Alex Hutton QC on behalf of the defendant, it is illogical that a matter started in the portal and unreasonably removed will achieve fixed costs, but where a matter is never placed on the portal, unreasonably, it will benefit from standard basis costs (paragraph 35). It seems, in my view, to defy logical thinking.
Comment
Whilst the correct interpretation of the rule has been applied, the rule clearly is at odds with what it was initially intended to achieve. CPR 44 and the comments of the court demonstrate this clearly.
One can only hope that the Civil Procedure Rule Committee decides to revisit CPR 45.24, allowing everyone to prosper in accordance with how the rules were clearly intended, and correctly reprimanding those who do indeed act unreasonably.
