This site uses cookies.

FREE CHAPTER from 'A Practical Guide to Costs in Personal Injury Claims - 2nd Edition' by Matthew Hoe

10/11/20. It’s two decades since the CPR came in. Costs are now fixed; many of the problems with costs are fixed; but costs law is anything but simple. There is so much you need to know. This book is the place to start. It’s an everyday guide to the everyday issues, with each point covered in a bitesize format. Don’t know how the rules apply in the circumstances of your claim? Find it here. Can’t remember the name of that key case? Find it here. Need a quick guide on the law in a specific area? Find it here.

The book is rich in expert insight into the way that costs claims work. It is a more accessible and streamlined practitioner’s handbook than other costs textbooks on the market, and also seeks to set itself apart by trying to give useful guidance on those difficult remaining topics on which the law does not yet give certainty.

The first half of the book deals with the fixed costs regime in detail. The later chapters deal with costs procedure and detailed assessment, all laden with practical tips for all parties so as to get to the right or the best result as soon as possible.

The book is aimed particularly at those working in personal injury claims, but also offers invaluable insight to the way fixed costs work for the wider civil litigation community. We all know an expansion of fixed costs will come, and those who are ready will be most likely to thrive.

CHAPTER TWO – COMPLEX ISSUES IN FIXED COSTS

This chapter considers in more detail some issues that were too expansive for the Chapter One’s summary of the fixed costs regime. These issues do not fit under the heading of one costs scheme, as they may span the whole regime.

Can there be an assessment of fixed costs?

The CPR appear to say that fixed costs should not be subject to detailed assessment. That leaves a puzzle: if the court is asked to decide the amount of fixed costs, what process should be followed?

The problem may not be immediately obvious. Part 47 describes the procedure of detailed assessment, and a bill of costs, points of dispute, replies and judicial decision appears an adequate means to resolve disputes. Detailed assessment of fixed costs disputes has proved entirely satisfactory to parties on both sides and the courts for many years, so any contrary intention in the CPR has been slow to catch on. Some of the reported fixed costs cases originally came before the court by detailed assessment.

The CPR do steer away from that however. CPR 44.6 is the main rule here:

(1) Where the court orders a party to pay costs to another party (other than fixed costs) it may either –

(a) make a summary assessment of the costs; or

(b) order detailed assessment of the costs by a costs officer,

unless any rule, practice direction or other enactment provides otherwise.

(2) A party may recover the fixed costs specified in Part 45 in accordance with that Part.

Its practice direction at PD44 expands:

8.1 …where the court does not order fixed costs (or no fixed costs are provided for) the amount of costs payable will be assessed by the court…

8.2 An order for costs will be treated as an order for the amount of costs to be decided by a detailed assessment unless the order otherwise provides.

Note that it appears to be fixed costs and assessment that are mutually exclusive, not fixed costs and the standard basis or indemnity basis. Lord Dyson MR said in Broadhurst v Tan [2016] 1 WLR 1928 at [30]:

The starting point is that fixed costs and assessed costs are conceptually different. Fixed costs are awarded whether or not they were incurred, and whether or not they represent reasonable or proportionate compensation for the effort actually expended. On the other hand, assessed costs reflect the work actually done. The court examines whether the costs were incurred, and then asks whether they were incurred reasonably and (on the standard basis) proportionately. This conceptual difference was accepted in the Solomon case [2012WLR 1048, para 19.

Moore-Bick LJ said in Solomon v Cromwell at [19]:

Although I accept that that regime does involve an assessment of some kind (particularly in relation to disbursements and cases where the court is satisfied that exceptional circumstances exist), I do not think that one can properly regard it as representing an assessment on the standard basis in those cases to which it applies.

Contracting out of fixed costs for an assessment

Broadhurst gave rise to arguments that any order for assessment displaces fixed costs. Claimants contended the parties had ‘contracted out’. Those arguments were dispelled by the Court of Appeal in Ho v Adelekun [2019] Costs LR 1963, where the court held that the costs agreement must be construed in all the circumstances and in that case the consent order did not displace fixed costs.

The court urged parties to be clearer in future. Newey LJ said at [37]: ‘For the future, a defendant wishing to make a Part 36 offer on the basis that the fixed costs regime will apply would, of course, be well-advised to refer in the offer to CPR 36.20, and not CPR 36.13, and to omit any reference to the costs being “assessed”.’ Males LJ added at [43]-[44]:

If parties wish to settle on terms that fixed costs will be payable if an offer is accepted, it is easy enough to say so and thereby to avoid any scope for argument… parties who wish to settle on terms that fixed costs will be payable would be well advised to avoid reference to assessment “on the standard basis” in any offer letter or consent order which may be drawn up following acceptance of an offer.

As an aside, an undesirable consequence if fixed costs do not apply automatically is the creation of scope for argument, and at worst for claimants to hold settlement to ransom for assessed costs by refusing to agree fixed costs terms even where there is no reason why fixed costs should not apply. Conduct issues may arise.

The correct procedure for resolving fixed costs disputes

The underlying presumption of the provisions and decisions is that fixed costs are fixed, and are not capable of dispute. Experience tells us otherwise. It is true that in most cases fixed costs will be agreed so there is only an occasional problem. But all sorts of quantification disputes can arise. For instance: disputes whether certain damages should be included for calculating fixed recoverable costs; which stage under the tables in Section IIIA apply; whether there has been an unreasonable exit from the RTA or EL/PL Protocols; whether there are exceptional circumstances under CPR 45.29J. So there needs to be a mechanism for resolution.

The mechanism appears to be an application rather than an assessment.

A right to assessment of fixed costs will not arise automatically under the rules. Take Part 36. There are no ‘deemed orders’ for fixed costs upon Part 36 acceptance: Mughal v Higgs & EUI (Senior Courts Costs Office, 6 October 2017, unreported) and Ivanov v Lubbe (His Honour Judge Lethem, County Court at Central London, 17 January 2020, unreported). Solomon confirmed at [16] there was no deemed order in predictable costs cases, because those claim settle before there are proceedings in which an order could be deemed to have been made. In Section IIIA cases, an entitlement under CPR 36.20 is not a source of a right to detailed assessment (those rights are listed in CPR 47.7): Nema v Kirkland [2019] EWHC B15 (Costs). Hence Part 36 gives no ready way to commence detailed assessment for the fixed costs entitlement.

Where there is a Part 36 acceptance some provisions point in the direction of an application to resolve disputes about the costs, but they are not entirely clear. CPR 36.14(4)(b) confirms the court’s jurisdiction. Where a Part 36 offer is accepted in a Section IIIA claim, CPR 36.20(11) provides: ‘Where the parties do not agree the liability for costs, the court must make an order as to costs.’ It depends how far that rule will stretch. It is a re-casting of CPR 36.13(4) for fixed costs, and that rule is concerned only with costs in principle – the ‘liability’ for costs – not their quantification. Assuming ‘liability’ here includes not only who pays but also how much, then parties should apply to the court to determine fixed costs.

Likewise for pre-issue settlements, the costs-only procedure provides at CPR 46.14(5):

In proceedings to which this rule applies the court may make an order for the payment of costs the amount of which is to be determined by assessment and/or, where appropriate, for the payment of fixed costs.

PD44 9.4 unhelpfully then refers to only one fixed costs scheme:

Unless the court orders otherwise or Section II of Part 45 applies the costs will be treated as being claimed on the standard basis.

The provision is probably as it is because it takes its lead from the pre-April 2013 wording of the costs-only procedure and the decision in Solomon v Cromwell [2012] 1 WLR 1048. Absent their specific namecheck, one would expect that Sections III and IIIA would lead to the court ‘ordering otherwise’.

The procedure that might be adopted is hinted by PD44 9.6:

A costs judge or a district judge has jurisdiction to hear and decide any issue which may arise in a claim issued under this rule irrespective of the amount of the costs claimed or of the value of the claim to which the agreement to pay costs relates.

Thus the court may convene a hearing to decide the fixed costs issue.

However, in practice, that rarely happens. Very rarely, if the fixed costs appear undisputed and are claimed (usually they are not claimed if they have been agreed and paid already), the court will make an order for the payment of fixed costs on the papers; but otherwise an order for detailed assessment will be made. That appears to suit most parties. The dispute then typically goes to provisional assessment, which might be preferred to short notice of a short Part 8 hearing, perhaps in a distant court.

The only way an assessment of fixed costs will arise is if the court orders it, either by consent or at a hearing in Part 7 proceedings, or on request in costs-only proceedings. Many courts and parties may not appreciate such an order is against the intention of the CPR, although Ho v Adelekun should raise awareness.

Where proceedings have already been started and a settlement is reached, the procedure would be a general application under Part 23. If an application is made in a Section IIIA case, it is not an interim application subject to fixed costs: Parsa v DS Smith plc [2019] Costs LR 331 at [35]-[38].

The difficulty is that the rules say nothing about the court’s approach to such an application. Presumably the applicant would seek an order for an amount of fixed costs and advance his argument as to why that was the correct amount, and the respondent would reply with an alternative sum and reasons. But it is all rather uncertain and less attractive to parties that the familiar detailed assessment procedure which is, after all, designed for the resolution of costs disputes. Parties might choose to apply for an order for assessment, perhaps by consent.

In a claim where the parties disagree on whether fixed costs apply at all, HHJ Simkiss held on appeal in Cox v Ronayne (County Court at Dartford, 18 July 2017, unreported) at [10] that an assessment or an application were both acceptable:

in my judgment, it is open to the party wishing to determine whether the fixed costs regime applies, or some other regime, either to leave it to the receiving party to issue an assessment and then contend that it is inappropriate, or to issue its own application to have the matter determined by the court.

A possible problem is the divergent approach required for disbursements. The receiving party may have accrued a right to detailed assessment of disbursements; so he might commence detailed assessment for disbursements if they are in dispute but may need also to make a separate application to resolve a dispute about fixed costs. Fixed costs disputes often get drawn into a detailed assessment that way, because it is easier to deal with everything in one place.

It is not clear whether an application or an assessment would be cheaper. Assessment would be by way of provisional assessment, where costs are capped at £1,500 plus VAT and court fees. A hearing should cost less, but these disputes have a way of escalating and generating greater costs.

The problem of the uncertain means of resolving fixed costs disputes was recognised by Sir Rupert Jackson in his Review of Civil Litigation Costs: Supplemental Report – Fixed Recoverable Costs in July 2017:

Assessment of costs.  In most cases, the assessment of recoverable costs should be a straightforward exercise, not requiring judicial input. In so far as there is any dispute, the court will assess costs. If the case goes to trial, the judge will summarily assess costs at the end of the hearing. In cases which do not go to trial, there should be a shortened form of detailed assessment, of the kind described in the last sentence of Practice Direction 47, paragraph 5.7, with a provisional assessment fee cap of – say – £500.

[p. 89, paragraph 5.22]

His recommendations have been subject of consultation but not yet brought into law.

Resolving disbursements disputes

Some disbursements are fixed in amount under Section III and Section IIIA and others are not. Where non-fixed disbursements are not agreed, they may need to be assessed. PD44 provides:

8.3 Where a party is entitled to costs some of which are fixed costs and some of which are not, the court will assess those costs which are not fixed. For example, the court will assess the disbursements payable in accordance with rules 45.12 or 45.19. The decision whether such assessment should be summary or detailed will be made in accordance with paragraphs 9.1 to 9.10 of this Practice Direction.

As not all disbursements are fixed, it is obvious there are some circumstances in which an assessment of disbursements will be required. PD44 8.3 codifies what Simon J said in Nizami v Butt [2006] 1 WLR 3307 at [25]: ‘I have rejected the argument that there is an anomaly in that CPR 45.10 requires a different approach. The reason why the costs under CPR 45.10 call for a different approach is that there are no fixed figures for disbursements.’ PD47 5.7 prepares for such assessments by directing:

If the only dispute between the parties concerns disbursements, the bill of costs shall be limited to items (1) and (2) above, a list of the disbursements in issue and brief written submissions in respect of those disbursements.

Previously it was thought that Part 36 provided for assessment of disbursements in Section IIIA cases. On Part 36 acceptance there would be a deemed order for detailed assessment on the standard basis under CPR 36.13(1) and (3) of the non-fixed disbursements. That would be true for Section II predictable costs cases. CPR 36.20(13) supposedly qualified that for Section IIIA cases by confirming the entitlement was only to disbursements listed in CPR 45.29I, as opposed to any and all disbursements.

However, as Hislop has confirmed that CPR 36.20 replaces CPR 36.13 in Section IIIA cases, that approach cannot be right. In Nema v Kirkland [2019] EWHC B15 (Costs), Master Leonard struck out a notice of commencement in a Section IIIA fixed costs case, finding that upon the Part 36 acceptance CPR 36.20 did not give the right to detailed assessment. He reached that conclusion with citing Hislop, but it could only fortify the decision. (He also concluded that the application which should be made under CPR 36.20(11) would be an interim application. Parsa v DS Smith plc, referred to above, was apparently not cited to him.)

HHJ Lethem advised parties to follow this procedure in Ivanov at [32]ff:

the application should seek two separate forms of relief. Paragraph one of the application should seek an order for costs in favour of the applicant. The second paragraph should ask for the costs to be assessed in accordance with the sum sought by the party. In order to avoid further difficulties, it would be prudent if the application exhibited a Form N260 (statement of costs), or at least the disbursements page where disbursements only are sought. Thus compliance with the indemnity principle would be confirmed by the signature on the form.

Once the court has decided to award the costs under paragraph 1 of such an application, paragraph 8.3 of PD44 is engaged and the court will have to decide whether to summarily assess the costs or order a detailed assessment. I would expect that, save in exceptional cases where there is some complexity or point of principle, there will be a summary assessment.

Under the costs-only procedure, as set out in the previous section, the court could make an order for fixed costs and an order for assessment of non-fixed disbursements. Or all matters could be considered at a hearing under PD46 9.6. Then, if needed, any disbursements could be summarily assessed or made subject to a detailed assessment under paragraph 9.9.

Differing definitions of ‘RTA’ in the fixed costs regime

The definition of a ‘road traffic accident’ differs between predictable costs under CPR 45 Section II and portal costs under the RTA Protocol. The differences are in bold:

CPR 45.9(4):

road traffic accident’ means an accident resulting in bodily injury to any person or damage to property caused by, or arising out of, the use of a motor vehicle on a road or other public place in England and Wales.

RTA Protocol, para 1.1(16):

road traffic accident’ means an accident resulting in bodily injury to any person caused by, or arising out of, the use of a motor vehicle on a road or other public place in England and Wales unless the injury was caused wholly or in part by a breach by the defendant of one or more of the relevant statutory provisions as defined by section 53 of the Health and Safety at Work etc Act 1974.

The definition in Part 45 is broader with the result that some claims that may be excluded from the RTA Protocol will fall under predictable costs.

For instance, claims where there is no bodily injury may fall within Part 45. That may include accidents where only property is damaged. However, as the upper limit for predictable costs is £10,000 (CPR 45.9(2)(c)) and the small claims threshold is £10,000, the small claims exclusion in CPR 45.9(2)(d) should separately prevent predictable costs applying to such claims.

The victim

For the purpose of the definitions, it need not be the claimant who suffers personal injury, and it need not be the claimant’s property that is damaged. As long as someone suffered bodily injury or someone’s property was damaged, the definition of ‘RTA’ for predictable costs or the Protocol will be fulfilled, as the case may be.

However, other criteria make it personal to the claimant. Paragraph 4.1(2) of the RTA Protocol requires the claim to include personal injury. If it does not, it may fall under predictable costs as long as the claim includes damages for damage to property, as the alternative to damages for personal injuries under CPR 45.9(2)(b).

Psychological injuries

On the face of it, a psychological injury alone is not enough to fulfil the RTA definitions. These may be claims by secondary victims, for instance. However, CPR 45.9(2)(b) provides that the Section applies if the agreed damages include ‘damages for personal injuries’, and para 4.1(2) of the RTA Protocol provides that the Protocol applies where ‘the claim includes damages in respect of personal injury’. The rules of interpretation in CPR 2.3(1)(c) provide: ‘“personal injuries” includes any disease and any impairment of a person’s physical or mental condition’.

RTA claims against an employer

Where a vehicle is involved in the accident circumstances there is a reasonable chance it is an RTA. Many employees use vehicles at work. Thomas v Cardiff County Council (HHJ Vosper QC, Cardiff County Court, 31 January 2008, unreported) is an example of how a claim can be both an RTA and EL claim, but RTA overrides for costs purposes. A piece of hot metal burned through the floor of the works van and injured the claimant’s foot. He made a claim against his employer. His solicitors sought standard basis costs with an EL success fee. They came away with RTA predictable costs.

The RTA definition in the Protocol would exclude many such claims. A footnote in the Protocol lists the ‘relevant statutory provisions’:

  • Control of Substances Hazardous to Health Regulations 2002 (S.I. 2002/2677);

  • Lifting Operations and Lifting Equipment Regulations 1998 (S.I. 1998/2307);

  • Management of Health and Safety at Work Regulations 1999 (S.I. 1999/3242);

  • Manual Handling Operations Regulations 1992 (S.I. 1992/2793);

  • Personal Protective Equipment at Work Regulations 1992 (S.I. 1992/2966);

  • Provision and Use of Work Equipment Regulations 1998 (S.I. 1998/2306);

  • Work at Height Regulations 2005 (S.I. 2005/735);

  • Workplace (Health, Safety and Welfare) Regulations 1992 (S.I. 1992/3004);

  • The Construction (Design and Management) Regulations 2007 (S.I 2007/320).

That list gives the flavour of the exclusions. The mistake can be made at the costs stage to argue that the claim should have been started under the RTA Protocol, forgetting the definition of RTA differs from Part 45 and these exclusions must be borne in mind.

If the claim against the employer settles for less than £10,000 without any Part 7 proceedings, it is more likely that predictable costs will apply.

Use of a vehicle

Another aspect of the definition is that a road traffic accident must be caused by or arise out of the use of a motor vehicle on a road or public place in England & Wales. Knowing if those criteria are met is decisive, for instance, on whether the claim should have started under the RTA Protocol or is within scope of predictable costs. Key questions are:

  • what is meant by ‘caused by or arising out of’;

  • what constitutes ‘use on a road or public place’;

  • what additional possibilities arise from the interaction of the parts of the definition?

The paradigm case on ‘caused by or arising out of’ is Dunthorne v Bentley (Court of Appeal, 26 February 1996). The defendant’s vehicle ran out of petrol. It was parked on the side of the road and had been for some 10 minutes. The defendant was standing behind her vehicle with hazard lights on. Her friend pulled up across the road. The defendant negligently ran out into the road. She was struck and killed by the claimant’s car. The claimant suffered head injuries. The claimant made a claim against the defendant’s motor policy. While the facts are grim, the relevant legal point is that the claim succeeded. The accident arose out of the defendant’s use of her vehicle. (Of course, it was a road traffic accident anyway because the claimant’s car hit the defendant, so it is really a policy coverage case.) The principle is that ‘arising out of’ embraces more remote possibilities that ‘caused by’. There is a full discussion and many examples in AXN v Worboys [2012] EWHC 1730 (QB) at [20]-[58], another case with grim facts. It is not a costs case, but nevertheless helpful.

Many criminal law precedents such as AXN assist in this area. The courts have construed identically worded provisions, such as those in the Road Traffic Act 1988. The meaning of the words has been considered carefully in criminal cases because there is no offence if there is no RTA. Although the purpose is different, the analyses can be helpful in civil costs cases.

Embarking on and disembarking from vehicles is ordinarily covered by motor insurance and is captured by the scope of ‘RTA’. See the examples of Green v KIS Coaches (Plymouth County Court, 2008, unreported) and Schneider v Door2Door (Master Campbell, SCCO, 18 July 2011, unreported).

Use’ means ‘have the use of’: Elliot v Grey [1960] 1 QB 367. That was a criminal case in which the vehicle had broken down and been left in the road outside the owner’s house until it could be repaired, with the engine broken, the battery removed and no petrol in the tank. While it could not be driven, it could be moved, and therefore the owner had the use of the vehicle. Although CPR 45.9(4) defines ‘motor vehicle’ as ‘mechanically propelled vehicle intended for use on roads’, it does not exclude broken down vehicles which at the time of the accident may not be capable of mechanical propulsion.

Use’ encompasses any activity that is part of the ordinary use of the vehicle. That does not simply mean then as a mode of transport or driving the vehicle. It includes carriage of goods. Goods transport involves loading and unloading. It is a question of how remote the loading or unloading is from the accident. See AXN at [43].

Road’ is self-explanatory, and CPR 45.9(4) advises, with an abundance of caution, that it includes a bridge over which a road passes.

Public place’ requires more thought. It is not to do with ownership of the land. In a criminal context, whether a road was public was considered in DPP v Vivier [1991] 4 All ER 18. In coming to the conclusion that a road in a caravan park was public, simplifying somewhat, the approach should be whether people having access were screened for some personal characteristic so that they were a special distinct class of people. Only if they were not would the place be public. If entry screening is merely for payment and agreeing to modest terms while on the land, that did not create a special class. Some instances are obvious. A council car park is a public place (Clarke v Kato [1998] 1 WLR 1647, which held a car park was not a road, was concerned with a definition of ‘RTA’ that did not include ‘public place’). A loading bay of a fenced off depot is not a public place. Google’s ‘Street View’ can be invaluable in determining whether there were any special access requirements.

It is not the accident which must be on a road or in a public place, but instead the use of vehicle which causes the accident or out of which the accident arises that must be on a road or in a public place. Combining ‘caused by or arising out of’ and the ‘use’ in this way embraces an even wider range of circumstances. Thus if a vehicle flew off a road and hit someone in a field, that would have arisen out of the use of the vehicle on a road. It must be immediately or closely proximate in time to the use of the vehicle on the road or in the public place: see the majority view in Lister v Romford Ice and Cold Storage [1956] 2 QB 180. An example is Randall v Motor Insurers Bureau [1968] 1 WLR 1900. The vehicle was half on private land and half on the road when the claimant pedestrian was injured. It was held that the vehicle was being used on the road.

In short, if the accident involves a motor vehicle in any way a claimant should give careful thought to whether a claim should start under the RTA Protocol; and at the costs stage, the claimant should give careful thought as to whether to claim only predictable costs; and the defendant at that stage will consider whether the claimant should be limited to RTA Protocol costs because the claim should have started under that Protocol, or whether predictable costs apply.

Allocation

Several issues connected with allocation are covered in Chapter One, such as: the relationships between predictable costs, portal costs and Section IIIA costs and small claims; split liability and the small claims threshold; reallocation; and Section IIIA and the multi-track, including the effect of the important Qader judgment.

This section considers other ways in which allocation can have fixed costs consequences.

The effect of allocation can be overstated. Some claims are allocated by the court, some are treated as allocated by effect of the rules (CPR 8.9(c)), and some settle before allocation. Allocation, or non-allocation, or deemed allocation are not determinative of costs issues, because the court has discretion on assessment (or for the small claims track, to make an assessment). Allocation is often a red herring.

For examples, see:

  • Drew v Whitbread [2010] 1 WLR 1725 – allocation is not decisive;

  • O’Beirne v Hudson [2010] 1 WLR 1717 – non-allocation is not decisive;

  • Dockerill v Tullett [2012] 1 WLR 2092 – deemed allocation is not decisive.

For more on non-allocation see Chapter One, ‘Applicability of small claims fixed costs.’ For reallocation, see Chapter One, ‘Reallocation of small claims’ and ‘Section IIIA and the multi-track’.

Special rules for costs on allocation

The small claims track and the fast track have ‘special rules’ about costs. The small claims track has rules covering the whole of the costs. The fast track has fixed fast track trial costs (not to be confused with the similar trial advocacy fixed costs in Section IIIA).

CPR 46.11(2) says that the special rules apply to a case once it is allocated to the track, and they also cover the period before allocation as well as after.

There is a specific exception that may be invoked when a claim is allocated to the small claims track because of admissions. See the section below.

The special rules are not always unbreakable or closed rules. If a claim is allocated to the small claims track, small claims fixed commencement costs apply; but the court still has a residual discretion to allow costs for unreasonable behaviour: CPR 27.14(2)(g). In a claim allocated to the multi-track, the court cannot simply apply fixed fast track trial costs; but if the court considers the claim should have been allocated to the fast track, the court can take those trial costs into account when making its assessment: Drew v Whitbread [2010] 1 WLR 1725.

In any circumstance where a party contends more than or less than what would be normal on that track should be allowed, the argument is likely open and deserves consideration rather than summary dismissal. Common judicial errors are findings that the claim was allocated to the fast track or there is an order for costs on the standard basis, so therefore the court cannot allow small claims costs or portal costs. Those points are dealt with more fully elsewhere in this book.

Deemed allocation

Part 8 claims are treated as allocated to the multi-track under CPR 8.9(c). It is rule of convenience that allows the whole allocation stage to be avoided in Part 8 claims.

Dockerill v Tullett [2012] 1 WLR 2092 is the leading case. In Part 8 claims brought for the approval of settlements in children’s claims, the claimants said that the deemed allocation meant that small claims costs were irrelevant, even though the value of the claims put them within scope of the small claims track. The Court of Appeal held that the deemed allocation was not determinative. When assessing costs, the court is required to look at the underlying claim, and if it decides the normal track for that claim is the small claims track that will be highly material whether it was reasonable to have employed solicitors and thus whether costs should be allowed.

CPR 8.9(c) does not apply to Part 8 costs-only proceedings, per PD46 9.11. Costs-only proceedings are covered in Chapter Seven.

Allocation and partial admissions

There is a specific possible exception to the rule that on allocation to the small claims track, small claims fixed costs will apply to the period before allocation. That is where allocation follows a partial admission.

Allocation is based on the value of the claim at the date of allocation rather than the date of issue (that being the effect of CPR 26.8(2)). Sometimes, a claim may fall below the small claims threshold because of items admitted (and thus no longer being in dispute) after issue but before allocation. PD46 7.1(3) allows the court to assess costs for the admitted items down to the date of allocation, and the costs for the remaining items will be small claims fixed costs. It is an often-overlooked power.

It would surely be wrong to invoke the power to allow costs down to the date of allocation in respect of items which had been admitted prior to proceedings being started and wrongly included in the claim form.

An admission to pay part of a sum claimed, if made properly, stands as an admission rather than merely an offer, and can have the effect of reducing the claim’s value so that it is allocated to the small claims track: Akhtar v Boland [2015] 1 All ER 644.

Pre-issue, defendants might go so far as to make admissions for partial sums against heads of claim to reduce the disputed value below the small claims threshold, meaning that is more likely that any subsequent proceedings will be allocated to the small claims track and less likely the claimant will get an order for costs down to the date of allocation. Ramirez v EUI Limited (HHJ Blunsdon, Lambeth County Court, 30 August 2012, unreported) is an example of such an outcome.

MORE INFORMATION / PURCHASE THE BOOK ONLINE

Image ©iStockphoto.com/imagestock

All information on this site was believed to be correct by the relevant authors at the time of writing. All content is for information purposes only and is not intended as legal advice. No liability is accepted by either the publisher or the author(s) for any errors or omissions (whether negligent or not) that it may contain. 

The opinions expressed in the articles are the authors' own, not those of Law Brief Publishing Ltd, and are not necessarily commensurate with general legal or medico-legal expert consensus of opinion and/or literature. Any medical content is not exhaustive but at a level for the non-medical reader to understand. 

Professional advice should always be obtained before applying any information to particular circumstances.

Excerpts from judgments and statutes are Crown copyright. Any Crown Copyright material is reproduced with the permission of the Controller of OPSI and the Queen’s Printer for Scotland under the Open Government Licence.