In Melloy and another v UK Insurance Ltd, a Circuit Judge in Portsmouth County Court held that where there were two or more claimants in a fixed recoverable costs case, two or more sets of fixed recoverable costs were payable to the claimants’ solicitors.
This was a personal injury claim arising out of a road traffic accident and the two claimants were passengers in a motor vehicle when it was struck from behind by a vehicle driven by the defendant’s insured.
Fixed recoverable costs apply only to personal injury claims valued at £25,000 or less, but that all changes on 3 April 2023 when virtually all civil litigation claims up to £100,000 become subject to fixed recoverable costs.
Fixed recoverable costs under CPR 45 are a combination of a fixed flat fee and a percentage of damages, and is in effect a recoverable contingency fee, and that will be the model when the extension comes in.
The first claimant recovered £2,015 and the second claimant recovered £1,765.
The solicitors for the claimants argued that they were entitled to two full fees, that is two fixed flat fees and a percentage of the damages in each case.
The defendant conceded that they were entitled to a percentage of both sets of damages; in other words that the damages should be aggregated for the purposes of that calculation, but that there should only be one flat fixed fee.
The claimants argued that the Portal, and therefore CPR 45.29A, contemplates only a single claim and claimant, and it was common ground that only one claimant can be included in a Portal claim, so each claimant was entitled to recover the fixed costs in the relevant table in CPR 45, which was the position taken by the court in Neary and Neary v Bedspace Resource Ltd.
The defendant argued that however many claimants there were, there was still only one claim, and one set of fixed costs, with anything else representing an unwarranted windfall for the claimants’ solicitors.
CPR 45.29 and the tables use the terms “claim”, “case”, “proceedings” interchangeably.
The court said that the word “claim” might be taken to mean court proceedings as that was the conventional meaning and CPR 45.29C(4)(a) refers to “the claim” being issued, allocated and listed, although Table 6B refers to “the case” and “the proceedings”.
In contrast, CPR 45.29A contemplates “a claim” started in the Portal, but having a continuing existence outside it, and uses “the case” in the context of allocation, but “a claim” in the context of costs and CPR 45.29B.
At paragraph 9 the court said:
“This must be taken to be a deliberate choice of words by the Rules Committee given that it differs from the wording suggested by Briggs LJ in Qader.”
I believe the judge was crediting, maybe ironically, the Civil Procedure Rule Committee with a greater verbal sophistication than it in fact possesses.
The court made the interesting point that CPR 45.29C(2) provides for a 12.5% uplift where the claimant and solicitor are based in London and queried how that would work with two claimants, one London based and one not.
The court held that the expression “claim” and “claimant” have an autonomous meaning for the purposes of Part IIIA of CPR 45 and refer to the claim started by, and the claimant who submitted, the Claim Notification Form on the Portal, and not to the claim or claimant in the proceedings.
It was supported by two decisions of the Court of Appeal, albeit on different points.
In Sharp v Leeds City Council, the Court of Appeal held that an application for pre-action disclosure was caught by the fixed costs regime as an interim application, and was not a free standing application subject to ordinary costs rules, and the “claim” had been instituted by the uploading of a Claim Notification Form on the Portal, even though no proceedings under Part 7 had yet been issued.
In West v Burton, the Court of Appeal dealt with a situation of a claimant who had died shortly after submitting a Claim Notification Form, and held that the executor carrying on the claim was not “the Claimant” for the purposes of Part III of CPR 45; the claimant throughout ex-Portal proceedings remains the person who issued the Claim Notification Form.
Extension of fixed recoverable costs
The somewhat Delphic reasoning depended upon the existence of the Portal scheme, which is an unusual beast in that rules of court apply to it, and fixed costs are payable, but it takes place before proceedings are issued.
That is not what is proposed in relation to civil litigation generally, and therefore, on the face of it, this decision would not apply, but having said that it may be the case with the so-called “funnel” system, and the digitisation of the Civil Justice System, that there will be portals for everything.
In fact, the new fixed recoverable costs scheme will adopt a different approach, with there being a fixed 25% uplift on the fixed flat fee earned, for each additional party.
In the September 2021 document, Extending Fixed Recoverable Costs in Civil Cases: The Government Response, paragraph 5.10 says:
“Uplift for additional claimants: The Government has decided to implement a 25% FRC uplift for each additional claimant, in claims that arise from the same set of facts.”
Although this is under the general heading (Chapter 1), section 5: question 1: The Fast Track, it is clear from the original consultation paper that it is to apply to all claims, including what would have been the intermediate track, but will now be a different part of the fast track, covering claims between £25,000 and £100,000.
The explanation is at paragraphs 5.5 – 5.7:
Question 1(ii): Specific issues raised by respondents
Ten per cent uplift for additional claims arising from the same cause of action
5.5 Both claimant and defendant respondents noted that the proposed 10% FRC uplift for multiple claims arising from the same action would be too low to facilitate the performance of all necessary tasks. In RTA cases, for example, it was stated that the injuries may vary depending on where the person was sitting in the vehicle, and thus more work may be needed to issue a sufficient claim.
5.6 Some respondents argued that limiting additional costs to only 10% could act as a deterrent to litigators to act on behalf of multiple claimants, or cause delays in pursuing multiple claims arising out of the same cause of action – thus limiting access to justice. There were additional concerns that vulnerable and protected parties would need extra care in order to pursue their claims. It was argued that a 10% uplift would be insufficient reimbursement for the additional work, and that an uplift of around 45% – 50% would be more appropriate.
5.7 One unintended consequence of a 10% uplift was cited as the potential for additional claims to become commodities, whereby individual claimants would be referred to different solicitors in order to benefit from the full fixed costs, or where the same firm would litigate separately for each client. An increased fee of around 25% per additional presented claimant was cited by respondents as one way to avoid this.”
The government had originally proposed 10%.
To confirm this, it is necessary to go back to the consultation paper at section 8: Some specific issues.
“8.1 Aside from the bands and grid, a few issues arising from the extension of FRC are worth setting out separately. These issues may apply equally in respect of intermediate cases (see chapter 5) and we propose to treat them on the same basis. For the sake of simplicity they are set out here, without being repeated in chapter 5.”
The matter is then dealt under the heading – Multiple claims arising from the same cause of action.
“8.15 In considering the appropriate FRC regime for package travel claims, it has become apparent that many claims (both PI and non-PI) are made where a legal representative acts for more than one claimant and the claims arise from the same set of facts, such as a family who have all suffered the same illness whilst abroad, or groups who are involved in the same road traffic accident. In this context, the question arises as to how all such claims (not limited to package holiday claims) should be dealt with, in fairness to all parties. Where the cause of action is the same and the claim itself is either similar or subsidiary to the principle claim, there is less work to be done for each claim after the first, such that it would not be appropriate to provide equal FRC for each additional claimant. It is a feature in holiday sickness claims, for example, that the booking details, facts, alleged illness, and resort are usually identical in multiple claims. If full FRC are allowed for each claim, this would clearly lead to over remuneration and perverse incentives to add more names to claims. Although this was not addressed by Sir Rupert, we therefore propose that the FRC for each additional claimant should be set at 10% of that for the principal claimant (as prescribed in Sir Rupert’s grid), however we also welcome suggestions as to what proportion would be appropriate for additional claimants. The 10% amount would be the standard position in any case, not just package holiday sickness claims, where a legal representative acts for more than one claimant and the claims arise from the same set of facts.”
It is presumed that where the defendant is successful, and it is important to remember that successful defendants in cases not covered by qualified one-way costs shifting will recover fixed recoverable costs, it will recover an extra 10% in relation to each claimant.
