Fixed recoverable costs applied on multi track

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A recent Appeal decision has provided welcome news to insurers by confirming that the fixed recoverable costs schedule under CPR 45.29A extends to claims allocated to the multi-track.

The subject matter of the Appeal arose when personal injury claims were presented by a driver and passenger under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (the RTA Protocol) arising out of a collision in October 2013.  The Defendant argued that the collision had been deliberately induced by the driver braking unnecessarily making a collision unavoidable and pleaded that both claims were fraudulent in the Defence.

The value on the claim form was stated to be "in excess of £5,000 but not in excess of £15,000".  Ordinarily a claim of this value would be allocated to the fast track, however presumably in light of the fraud allegation the claim was allocated to the multi track.

The parties duly filed Costs Budgets, but when the matter came before the Court for a Case Management Conference the District Judge made an Order that CPR 45.29A fixed costs applied.

In July 2013, CPR 45 Section IIIA was introduced.  This section sets out at CPR 45.29A that it relates to claims which no longer continue under the RTA or EL/PL Pre-action Protocols and provides at CPR 45.29B that, if in a claim under the RTA Protocol the Claim Notification Form is submitted on or after 31st July 2013 (as in this case), the only costs allowed are (a) the fixed costs in rule 45.29C and (b) disbursements in accordance with rule 45.29I.

The District Judge made it clear that the determining factor was not track, but value in respect of the operation of the fixed costs regime.  The District Judge referred to CPR 3.12(c) relating to Costs Management, which provides that Section II of Part 3, entitled “Costs management” applies to all Part 7 multi track cases except (a) where the amount of money claimed is £10 million or more, or (c) where the proceedings are the subject of fixed costs.  He felt that the wording of CPR 3.12(c) was unequivocal and clearly contemplated costs on the multi track being subject to fixed costs.

The Appellant’s argument was that the District Judge had failed to interpret CPR 45.29A purposively and in accordance with the overriding objective, and that he had been wrong in law to conclude that fixed recoverable costs must apply to multi track cases that started in the RTA Protocol.  Rather, had the learned District Judge interpreted the rules and the overriding objective correctly, he would have concluded that the fixed recoverable costs schedule does not apply to multi track cases.

His Honour Judge Grant, hearing the Appeal, robustly rejected these grounds.  In his judgement there was no ambiguity, or lack of clarity, in the meaning of the words and expressions used in Section IIIA of Part 45 which would require a judge to construe or interpret them:  Instead the task was simply to apply the plain meaning of those words and expressions.

His Honour Judge Grant further referred to the provisions of CPR 45.29J which provides that, if it considers that there are exceptional circumstances making it appropriate to do so, the Court will consider a claim for an amount of costs (excluding disbursements) which is greater than the fixed recoverable costs referred to in rule CPR 45.29B.  This provision therefore offered a material safeguard against any injustice that the Appellant complained of.

In summary, His Honour Judge Grant felt that there could be no reasonable or sensible criticism or complaint of the fixed recoverable costs regime provided for which, in his judgement, applies to low value personal injury claims arising out of a road traffic accident, and which are proceeding on the multi track.

As ever since these fixed recoverable costs schemes were introduced, Defendants need to thoroughly scrutinise the basis of the costs being presented to ensure that Claimants are only recovering what they are entitled to, and not seeking to exploit their position, for instance by virtue of an atypical allocation.