CPR 45 Fixed Costs – Advocacy fee payable despite settlement

CPR 45 Fixed Costs – Advocacy fee payable despite settlement at the 11th hour

Fixed Costs were intended, Jackson LJ said, to provide certainty in the amounts to be awarded between the parties in matters to which they apply, typically low value personal injury claims. Notwithstanding this, there have been considerable challenges brought by paying parties in relation to all aspects of those costs, to include inter alia the points at which each stage of those fixed costs are triggered and allowable disbursements, to name but a few.

It is, therefore, considerably unsurprising that at some point the High Court would be required to provide a judgement on one of these points, in order to provide some much-needed clarity to this area in which the desired level of certainty appears to have been conspicuous by its absence.

In the matter of Mendes v Hochtief (UK) Construction Ltd [2016] EWHC 976 (QB) the claim was started under the RTA protocol, was allocated to the fast track and proceeded to trial. However, on the day of the trial, both counsel sought time from the recorder on two occasions in order to establish whether or not it would be possible to compromise the matter, believing that there was a realistic opportunity for settlement. That additional time was allowed by the recorder and resulted in counsels’ attendance with a consent order for approval, compromising the matter on behalf of the claimant in the sum of £20,000 plus costs . The recorder then attended to the assessment of those costs and awarded two elements of the fixed costs in accordance with Schedule IIIA CPR 45, being £2655.00 plus 20% of the damages, but refused to award the fixed trial advocacy fee of a further £1705.00 on the basis that the claim had concluded before the commencement of the “final contested hearing” (as per CPR 45.29C (4)(c)).

The claimant appealed in the matter came before Coulson J, whereupon it was found on behalf of the claimant, rejecting the defendants arguments to the contrary, that the settlement occurred on the date of the trial and that this was germane to the consideration of whether or not section B or section C of table 6B applied.

Coulson J further rejected the defendants arguments that there was a lacuna in the rules, finding that they were intended to be a

“…comprehensive guide to what was recoverable and when…”

and that the further argument on behalf of the defendant that section C was only intended to cover trial advocacy, which had not occurred in this instance due to the settlement

“… seeks to make an artificial distinction between preparation of advocacy and attendance at trial on the one hand and actual performance of advocacy on the other. And what if the trial goes ahead and the judge does not call on counsel or the solicitor-advocate for the claimant because the other side’s case is so poor? He or she would not perform any advocacy in such circumstances so, if the defendant is right, he or she would not be entitled to be paid. That would be an absurd result.”

rejecting completely argument from the defendant also that counsel negotiating settlement at the doors of the court was, in some way, seeking to take advantage of the rules, finding

“The fact that the trial advocacy fee is recoverable by the barrister or solicitor-advocate for their preparation for, and attendance at trial, which would not otherwise be recoverable, hardly amounts to some sort of windfall.”

It is also of interest to practitioners to note that Coulson J also determined that there were

“sound policy reasons for concluding that the interests of justice would be better served if the advocate was not penalised financially for negotiating a settlement at the door of the court. Nor do I think that my interpretation leads to uncertainty; indeed, in my view, confusion is much more likely to arise on the alternative construction, with arguments – which might have arisen here – about precisely when the trial could be said to have commenced”.

Thus it appears that, if there had been any doubt in what was otherwise intended to be an area of certainty, such doubt has now been very firmly extinguished with this entirely clear and robust judgement.