By Frances Lawley
The Court of Appeal considered a “short but important point of interpretation of the Civil Procedure Rules” concerning the costs of pre-action disclosure (“PAD”) applications in cases which started, but no longer continue, under the EL/PL Protocol.
A lack of clarity in drafting of the rules had led to some judges awarding the fixed sum for interim applications and others awarding costs assessed on the standard basis.
At first instance in this matter DJ Heppell awarded costs on the standard basis summarily assessed in the sum of £1,250. On appeal HHJ Saffman reduced costs to £305 on the basis that the fixed costs regime applied. The claimant appealed to the Court of Appeal.
Briggs LJ gave the leading judgment starting with the background to the County Court’s jurisdiction to grant PAD orders (conferred by section 52(2) of the County Courts Act 1984 and CPR 25.1 “interim remedies”) and noting that such orders are not restricted to personal injury claims. Background to the fixed costs regimes for cases leaving the EL/PL protocol is also given including the fixed costs provision for interim applications (CPR 45.29H) and the fact that additional costs can be ordered in exceptional circumstances (CPR 45.29J).
It is observed (from the judgment of another Wakefield Judge, DJ Ellington, in the unreported judgment of Kirton v Asda Stores) that there is a large volume of PAD applications in the County Courts but that the vast majority are ultimately dealt with by consent and those that do result in a contested hearing before the court are largely concerned with the costs of the application rather than the substance of it. This was the case here.
Ultimately the Court of Appeal concluded that the fixed costs rules for interim applications did apply for the following reasons:
- The starting point is that the plain object and intent of the fixed costs regime in relation to claims of this kind is that, from the moment of entry into the Portal pursuant to the EL/PL Protocol (and, for that matter, the RTA Protocol as well) recovery of the costs of pursuing or defending that claim at all subsequent stages is intended to be limited to the fixed rates of recoverable costs, subject only to a very small category of clearly stated exceptions. To recognise implied exceptions in relation to such claim-related activity and expenditure would be destructive of the clear purpose of the fixed costs regime, which is to pursue the elusive objective of proportionality in the conduct of the small or relatively modest types of claim to which that regime currently applies.
- That conclusion is, in my view, expressly prescribed by the clear words of Part 45.29A(1) and 45.29D. In particular, paragraph D provides that the fixed costs and disbursements prescribed by the regime (in paragraphs 29E and I respectively) are “the only costs allowed”. Although this is subject to paragraphs F, H and J, they are each part of the fixed costs regime, even though they permit different or enlarged recovery in certain precisely defined circumstances.
- That this is what Section IIIA of Part 45 is clearly designed to achieve is powerfully reinforced by its context, namely those other provisions in Part 45 (already described) which ensure that a case which starts under the EL/PL Protocol and continues within it to settlement or Stage 3 determination is also subject to the fixed costs regime throughout, as I have described. Furthermore, the fixed costs regime plainly applies to cases which no longer continue under the EL/PL Protocol but which never reach the stage when court proceedings are issued. This is what is provided by Part 45.29E and Part A of Table 6C in particular. The same applies to RTA Protocol cases: see Part 45.29C, and Part A of Table 6B.
- I agree with Mr Hutton that a PAD application is, in certain respects, both self-contained and separate from the claim (whether or not for personal injury) to which it relates. But in the personal injury context, or at least that part of it to which the EL/PL Protocol and the Personal Injuries Protocol both apply, the connections between the PAD application and the claim for personal injury damages to which it relates are particularly close, as is reflected in Mr Hutton’s sensible concessions. The PAD application both responds to a defendant’s default in compliance with its disclosure obligations under the Personal Injury Protocol and operates in furtherance of the damages claim by assisting the claimant in its preparation. It also operates as a means whereby the procedural advantages intended to be conferred on claimants by the Personal Injury Protocol are made good by the court. Above all, the provision of pre-action disclosure powerfully contributes to early settlement, before the issue of proceedings, which is a stated aim of the Protocol.
- For those reasons it seems to me entirely apposite for a PAD application to fall within the description of interim applications in Part 45.29H, as being “an interim application … in a case to which this Section applies”. The “case” in which the application is made is, in my view, the claim for damages for personal injury, during and in the pursuit of which the PAD application is made. It is plainly an application for an interim remedy within the meaning of Part 25, and it is in my view “interim” in the fullest sense, because it follows the institution of the “claim” by the uploading of a CNF on the Portal, even though no proceedings under Part 7 have yet been issued, and precedes the resolution of the claim by settlement or final judgment.
Whilst this is clearly a victory for defendants, it should be noted that the matter does not necessarily end there. Briggs LJ acknowledged that the fixed costs available were unlikely to cover the work done on a PAD application and went on to say that where there was significant injustice in granting only fixed costs, i.e. where a deliberate or recalcitrant defendant fails in its disclosure obligation and waits to see if a claimant is prepared to make an uneconomic PAD application, this can be rectified by the application of the explicit exception to fixed costs as set out in CPR 45.29J. Defendants ought therefore not to rest on their laurels at this ruling and must continue abide by their disclosure obligations.