The following blog looks at an appeal decision concerning Part 36’s operation where there is a dispute about the reasonableness of exiting the Road Traffic Accident (RTA) Protocol.
In the County Court at Oxford, HHJ Melissa Clarke has given a very helpful judgment on a vexed point concerning CPR 45 Section IIIA fixed costs cases. The question was whether a claimant could be limited to the lower Section III costs after unreasonably exiting the RTA Protocol when a claim settles under Part 36.
CPR 36.20(2) states:
Where a Part 36 offer is accepted within the relevant period, the claimant is entitled to the fixed costs in Table 6B, Table 6C or Table 6D in Section IIIA of Part 45 for the stage applicable at the date on which notice of acceptance was served on the offeror.
The claimants in Ansell & Evans v AT&T argued that that was an absolute entitlement and that they could not be limited to RTA Protocol costs under CPR 45.24. The deputy district judge found that they had acted unreasonably; the claimants’ application for a declaration that Section IIIA fixed costs applied was dismissed. The claimants appealed against the unreasonableness finding. They also took the technical point that the decision was ultra vires.
At first blush, the claimant had a compelling argument because the rule’s wording did seem to suggest an absolute entitlement. However, and as ever, simple arguments can be deceptive.
CPR 36.20(2) is not directed at giving an absolute entitlement. It clarifies the date to be used for working out the applicable stage under the relevant table. Rather than use, say, the last day of the offer’s relevant period, the stage reached under the fixed costs table will be judged by the date of acceptance of the offer.
Further, the defendant argued that the rules needed to be construed purposively. They made several points:
- Solomon v Cromwell was Court of Appeal authority that an entitlement to costs under Part 36 gave way to a more specific rule for the specific category of claims.
- CPR 36.20 does not create a complete costs scheme; it deals only with the date issue. It therefore has to be read in conjunction with Part 45. For instance, CPR 36.20 doesn’t provide for VAT, London weighting or interim application costs.
- On the claimant’s reading, disease claims excluded by CPR 45.29A(2) from fixed costs would be forced back in by Part 36.
- It made no sense that claimants who settled by Part 36 should be shielded from being limited to Section III costs, but those who settled otherwise were not.
- If the court’s power to allow less under CPR 45.24 was ousted, then so too must the power to allow more under CPR 45.29J be ousted. That would be a most unattractive conclusion.
HHJ Clarke accepted those arguments and dismissed the claimants’ appeal.
She considered that CPR 45.29B was the general rule for this category of claims, and that CPR 36.20 was a specific rule; but CPR 45.24 was a specific rule, so the Solomon canon of construction was not a complete answer. Tension existed between CPR 36.20 and CPR 45.24, and how they affected the general rule.
HHJ Clarke found it necessary to take a purposive approach. She was influenced by two main points:
- There was a link between CPR 36.20 and CPR 45.24; CPR 36.20(1) cites CPR 45.29A(1), which in turn cites CPR 45.29A(3), which in turn cites CPR 45.24.
- There was indeed an apparent inability to recover VAT and London weighting if the claimants’ construction was right, but that could not have been intended.
She also took policy considerations into account. The making or acceptance of Part 36 offers would be discouraged If the claimants were correct.
HHJ Clarke went on to uphold the district judge’s finding on unreasonable exit.
This was an interesting case that tackled an argument that seemed to be becoming an urban myth. The issue has reportedly arisen several times before district judges. However, no judgments have been available, and, perhaps without full analysis of the rules, there have been some aberrant results. The simplicity of the claimants’ argument, compared to the more complicated correct answer, may well have seemed attractive in the confines of a busy list.
This judgment seems to be the first at circuit level. It is carefully reasoned and should draw a line under this particular Part 36 argument. Instead, CPR 45.24 arguments will normally be decided on the substantive merits, rather than technical points about curtailment of the court’s powers by Part 36. The principles here would apply equally to exits from the Employers’ Liability/Public Liability (EL/PL) Protocol, as well as the RTA Protocol.
It will also be interesting to see if the judge’s conclusions accord with the pending judgment in the Court of Appeal case of Hislop v Perde; Kaur v Committee ftb of Ramgarhia Board, which will consider CPR 45.29J exceptional circumstances where there has been a Part 36 acceptance.
