PI Brief Update

Smith v The Royal Bank of Scotland [2021] EWCA Civ 977 - Harry Peto, Temple Garden Chambers

15/07/21. The Defendant sought permission to appeal in a second appeal in relation to a PPI case. The case had been allocated to the small claims track. Permission to appeal was granted, but subject to a condition that the Defendant pay the Claimant’s costs of the appeal. This condition was on the ground that the Claimant was an individual with a small claim who was defending a second appeal, whereas the Defendant was a large corporation. The Defendant applied to set aside that condition.

Defendant’s Successful Application

The Court can only vary the order if there is a compelling reason to do so: CPR 52.18(2). If a condition was imposed which the Court had no power to impose, that would be a compelling reason to set aside the condition. CPR 27.14(2) provides that the court may not award costs in a case allocated to the small claims track (with some exceptions not relevant here). In Akhtar v Boland [2014] EWCA Civ 943, it was held that the wording of CPR 27.14(2) is clear and extends to the costs of an appeal.

While it is common for parties with large resources to be granted permission to appeal on the condition that they pay the opposing party’s costs regardless of the appeal’s outcome, appeals from cases heard on the small claims track are an exception. There are situations in which the Court can impose conditions on a party’s continuing participation in a case which could not be the subject of a direct order, but those situations do not involve a Court overriding an express provision of the CPR.

Following Canada Square Operations Ltd v Potter [2021] EWCA Civ 339, it is not a proper use of the general power to attach conditions to sidestep a rule expressly prohibiting orders for costs. It was also too late for an application for re-allocation to be made, which could have been made in the County Court. Appeals do not proceed on the small claims track, fast track or multi-track, as these are County Court concepts.

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