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Court of Appeal clarifies when Fixed Recoverable Costs apply – Qader & Others v Esure Services L

Clarifying Fixed Recoverable Costs – Court of Appeal provides second judgement within a week

There has, of late, been much uncertainty within the profession as to how and when Fixed Recoverable Costs (“FRC”) apply and also more generally as to the ever growing cohort of cases to which they do and are, in the future, projected to cover. The approach adopted by Briggs LJ in the Court of Appeal at the end of last week in the matter of Terrance Bird v Acorn Group PLC appeared to indicate what could be described as a common sense approach to the resolution of such disputes.

Today we note that Briggs LJ has adopted a similar approach to interpreting the FRC and their application in given instances, an approach with which Gross & Tomlinson LLJ also unanimously concurred.

The latest ruling arose out of the presumption that CPR 45.29 appeared “…unambiguously to apply the fixed costs regime to all cases which start within the relevant protocols but no longer continue under them…” and that such presumption had been exacerbated and (wrongly) maintained as a result of the application of a scheme (FRC) which was created with the intention that it would apply to fast-track cases.

This latest appeal, in the matter of Qader & Others v Esure Services Ltd [2016] EWCA Civ 1109, in which the Personal Injury Bar Association and the Association of Personal Injury Lawyers had been permitted to intervene, was in fact two conjoined appeals arising out of claims for road traffic accidents which had been commenced under the RTA Protocol but had, as a result of their specific circumstances, exited the Protocol and been allocated to the multi-track following the issue of proceedings under CPR 7.

Both matters which were the subject of this conjoined appeal had, at first instance, been allocated to the multi-track, with the district judges upon allocation clearly being under the impression that such allocation automatically disapplied the CPR 45 fixed costs regime as the matters were listed for CCMC’s whereupon, in the matter of Qader the district judge (who had not been the same district judge as had allocated the matter and whilst expressing sympathy for the claimant) ruled that CPR 45.29A “…unmistakably provided for the fixed costs regime to apply, not withstanding allocation of the case to the multi-track, although he acknowledged that the Rule Committee might not have intended that consequence…” and in the matter of Khan (again a different district judge than the one who had allocated the matter) concluding that the matter “…was far removed from an ordinary modest value RTA case, and therefore unfit for the application of the fixed costs regime…[concluding further]…that he could properly exercise of discretion under rule [CPR 45.13] at the CCMC stage, and directed that the case should proceed on the ordinary multi-track basis of assessed costs from then on.”

Needless to say, the claimant in Qader and the defendant in Khan were deeply dissatisfied with the determination in their matters and appealed, seeking clarity on the issue which was not addressed within the rules, namely

“…whether the fixed costs regime continues to apply to a case which no longer continues under the RTA Protocol but is allocated to the multi-track after being issued…“.

Following argument from all sides in both appeals and input from the Interveners, Briggs LJ concluded in a detailed and thorough judgement that cases that exit the RTA and EL/PL protocols and then proceed on the multi-track were not subject to fixed recoverable costs.

In reaching that conclusion, Briggs LJ undertook a careful and thorough analysis of the genesis of the FRC, noting

“After more hesitation than my Lords [Gross and Tomlinson LJJ], I have come to the conclusion that section III A of part 45 should be read as if the fixed costs regime which it prescribes for cases which start within the RTA protocol but then no longer continue under it is automatically disapplied in any case allocated to the multi-track, without the requirement for the claimant to have recourse to Part 45.29J, by demonstrating exceptional circumstances.”

He continued that

“…no ordinary process of construction or interpretation of the wording of the relevant rules could lead to that result…”

but following

“…careful analysis of the historic origins of the scheme…[such analyses] demonstrate that it was not in fact the intention of those legislating for this regime in 2013 that it should ever apply to a case allocated to the multi-track”.

Highlighting a Ministry of Justice response to consultation in February 2013 which noted “It has always been the government’s intention that these proposals apply only to cases in the fast track and if a case falling out of the protocols is judicially determined to be suitable for multi-track, normal multi-track costs rules will apply.”, Briggs LJ however observed that “There is no evidence that the government altered its policy in relation to multi-track cases falling outside the fixed costs regime as set out [that response], nor that the rule committee consciously decided to adopt the opposite approach.”

He further opined that to conclude “… that it should so apply is a result which can only have arisen from a drafting mistake, which the court has power to put right by way of interpretation even if, as here, it requires the addition of words, rather than giving the words actually used a meaning different from their natural and ordinary meaning.

“It should normally be possible to understand procedure rules just by reading them in their context, but this is a rare case where something has gone wrong, and where the court’s interpretative powers must be used, as far as possible, to bring the language into accord with what it is confident was the underlying intention.”

and accordingly that such failure of clarity within the rules met the threshold test for the Court of Appeal to correct drafting errors within the rules.

In order to rectify the failure and give rise to the intention that allocation to the multi-track automatically disapplied FRC, Briggs LJ proposed the addition to CPR 45.29B, after the reference to 45.29J, the words: “… and for so long as the claim is not allocated to the multi-track…”. He did, however recognise that this was, perhaps, an imperfect solution and one not without risk

“I recognise the force of [counsel for Esure’s] submission that this process of interpretation by the addition of words risks giving rise to satellite litigation at the allocation stage by claimants seeking to disapply the fixed costs regime in relation to their claims.

“I consider that this is a risk best addressed by relying upon the good sense and vigour of case management judges in furthering the overriding objective, and in penalising those who seek to abuse the opportunity to which the allocation stage in such a claim gives rise.

“I recognise also that my proposed insertion of words to part 45.29B does nothing about the anomaly represented by the £25,000 apparent damages ceiling in part A of Table 6B. It is unnecessary in the context of these appeals to do so, both because neither of them reached settlement prior to the issuing of part 7 proceedings, and because the damages claimed are well below £25,000.

however continued that

“It is a continuing anomaly which, in my view, the rule committee should be invited to consider at the earliest available opportunity. It may also be minded to devise an amendment to section IIIA of part 45 which fully reflects the concerns which underlie this judgment, not merely in relation to the RTA protocol, but to the EL/PL protocol as well.”

Following this it must be hoped that the Rule Committee will take on board Briggs LJ’s proposed amendment, however and for the time being it is noteworthy that the Court of Appeal have, once more, provided clarity for the profession going forward.

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