QADAR v ESURE [2016] EWCA Civ 1109- NO FIXED COSTS WHEN CASES LEAVE THE PORTAL

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By Kate McKinlay

Thank goodness for that?!? :- Court of Appeal makes provision for full costs in ex-portal multi-track case … by amending the rules.

IN BRIEF:

The Court of Appeal today concluded that fixed costs DO NOT apply in multi-track cases EVEN if they started life in the RTA PORTAL

BACKGROUND:

In June 2015, DJ Salmon sitting in Birmingham and having been invited to make a costs order at a CCMC, concluded that fixed costs should apply and declined to make a costs order on the basis that 45.29A unmistakably provided for the fixed costs regime to apply.

The Claimant appealed this decision such that on 9th September HHJ Grant heard the appeal of the costs decision. He agreed DJ Salmons interpretation of the rules, rejecting the appeals from the Claimant, and concluding that fixed costs should apply. The Claimants appealed to the Court of Appeal.

 THE ISSUE:-

Does the fixed costs regime continue to apply to a case which no longer continues under the RTA Protocol but is allocated to the multi-track after being issued under Part 7?

THE CONTEXT:

The legal context for this appeal was around the interpretation of section IIIA of CPR Part 45, read together with the relevant provisions of the RTA Protocol, and against the background of the process of consultation which preceded the making of that section in 2013, by way of implementation of fixed costs proposals in the reports of Jackson LJ in his Review of Civil Litigation Costs.

THE PROBLEM:-

The Court of Appeal identified the following problem:- that the formulation of the detailed tabular provisions for the recovery of fixed costs in relation to claims started but no longer continuing under the relevant Protocols was developed upon an assumption that, if Part 7 proceedings were issued, they would in due course be allocated to the fast track, if not determined at a disposal hearing following judgment for damages to be assessed. As is apparent from the decision in Bird v Acorn [2016] EWCA Civ the post-judgment disposal procedure is an alternative to allocation to a track, to which the fixed costs regime is fully applicable.

However whilst some cases have been necessarily and quite properly allocated to the multi-track ( eg due to allegations of fraud as in the instant case) there is nothing in Part 45.29 which expressly limits the fixed costs regime applicable to cases started but no longer continuing under the relevant Protocol to fast track cases, or which excludes the fixed costs regime when a case is allocated to the multi-track.

THE ANALYSIS:

The judgement begins with a consideration of the RTA Portal and the Fixed Costs Regime and their purpose, with particular consideration of 45.29B and C, these being the rules which make detailed provision for costs in cases which do not continue within the portal.

From paragraph 35 onwards Briggs LJ sets out his reasoning for the misapplication of the 45.29c to case allocated to the multi-track. The reasoning includes a determination the absence of a restriction on the ambit of the fixed costs regime was clear, and the only reason for that restriction not being enacted in section IIIA of Part 45 appears to be inadvertence, rather than a deliberate decision by the Rule Committee to take a different course (para 54).

THE SOLUTION:-

The Court of Appeal exercises its exceptional jurisdiction to correct draft errors in statutory provisions as per Lord Nicholls at 592 in Inco Europe Limited v First Choice Distribution [2000] 1 WLR 586 as set out below.

THE JUDGMENT:

  1. In the Inco Europe case to which I referred at the beginning of this judgment, Lord Nicholls described the court’s jurisdiction to put right drafting errors in statutory provisions in the following terms, at [2000] 1 WLR 586, at 592C-H:

“It has long been established that the role of the courts in construing legislation is not confined to resolving ambiguities in statutory language. The court must be able to correct obvious drafting errors. In suitable cases, in discharging its interpretative function the court will add words, or omit words or substitute words. Some notable instances are given in Professor Sir Rupert Cross’s admirable opuscule, Statutory Interpretation, 3rd ed. (1995), pp. 93–105. He comments, at

 p.103:

“In omitting or inserting words the judge is not really engaged in a hypothetical reconstruction of the intentions of the drafter or the legislature, but is simply making as much sense as he can of the text of the statutory provision read in its appropriate context and within the limits of the judicial role.” This power is confined to plain cases of drafting mistakes. The courts are ever mindful that their constitutional role in this field is interpretative. They must abstain from any course which might have the appearance of judicial legislation. A statute is expressed in language approved and enacted by the legislature. So the courts exercise considerable caution before adding or omitting or substituting words. Before interpreting a statute in this way the court must be abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed. The third of these conditions is of crucial importance. Otherwise any attempt to determine the meaning of the enactment would cross the boundary between construction and legislation: see per Lord Diplock in Jones v. Wrotham Park Settled Estates [1980] A.C. 74 , 105–106. In the present case these three conditions are fulfilled. “

  1. It may be said that the interpretative jurisdiction to put right obvious drafting errors in a statute is fortified by the difficulties which typically face Parliament in doing so, in relation to primary legislation, in the light of its heavy workload. The same difficulties do not affect the Rule Committee to any similar effect. It can, and regularly does, re-consider rules when invited to do so by the court, either to correct drafting errors or other infelicities which have been proved to cause procedural difficulty. Nonetheless it is almost invariably the case that corrections cannot be made with retrospective effect, so that parties in ongoing litigation who are adversely affected by the relevant error do not thereby obtain relief from their predicament.
  2. In the present case the Rule Committee’s apparent failure to implement the continuing intention of the Government, in response to stakeholder concerns, to exclude multi-track cases from the fixed costs regime being enacted for cases leaving the RTA and EL/PL Protocols seems to me to satisfy all three of Lord Nicholls’ preconditions. The intended purpose of the fixed costs regime in this context was that it should apply as widely as possible (and therefore to cases allocated to the fast track, and to cases sent for quantification of damages at disposal hearings), but not to cases where there had been a judicial determination that they should continue in the multi-track. The intended restriction on the ambit of the fixed costs regime is clear, and the only reason for that restriction not being enacted in section IIIA of Part 45 appears to be inadvertence, rather than a deliberate decision by the Rule Committee to take a different course. Similarly the substance of the provision which the Rule Committee would have made, if it had taken steps to enact that restriction would have been to provide that, from the moment when a case was in fact allocated to the multi-track, the section IIIA fixed costs regime should cease to apply to that case.
  3. By contrast, I do not consider that the Rule Committee would have carried back to a pre-allocation stage a policy to dis-apply fixed costs, merely because a claim properly started in the Protocols had grown in value beyond £25,000, or had become the subject of a pleaded defence of fraud or dishonesty. As I have said, it by no means follows that every such case would be inappropriate for management and determination in the fast track. To require the parties to guess, or the court to decide, whether a case which settled prior to allocation (to which therefore part A or the first column of part B of Table 6B would apply) was or was not subject to fixed costs would introduce a damaging and unnecessary degree of uncertainty into a scheme which depends upon its predictability for its contribution towards the proportionate, speedy and effective disposal of civil proceedings.
  4. The best way to give effect to that intention seems to me to be to add this phrase to Part 45.29B, after the reference to 45.29J:

   “…and for so long as the claim is not allocated to the multi-track…”

link to full judgment: QADAR v ESURE [2016] EWCA Civ 1109-

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