1 May 2014Print This Post

Judge’s despair as costs hit £16,000 in dispute over £15

car crash

Case involved a low value RTA

A district judge has been driven to despair as solicitors cranked up over £16,000 in costs in a dispute over an outstanding amount of only £15.

District Judge Peake told Birkenhead County Court: “One can almost read the Daily Mail or the Daily Express headlines: ‘Solicitors generate £16,000 worth of costs over a £15 dispute’. I despair at times.”

The claim in Kilby v Brown involved a low-value RTA case, which the judge described as “a couple of months or so of soft tissue injuries”.

Operating under the portal, the defendant admitted liability, but at the end of stage 2 in the process, there was still “some distance” between the parties over the settlement figures. The claimant served the court proceedings pack, and banked the stage 2 payment, but after the time limit for payment had elapsed, dropped the claim from the portal and issued part 7 proceedings. It emerged that this was because the stage 2 payment had been £15 short.

Having awarded the claimant damages of £1,541, DJ Peake adjourned the issue of costs and the question of whether the claimant had acted reasonably was raised. He said that by this time, the case had generated “a great deal of work by the solicitors” and a trial bundle running to 157 pages.

“Almost as an aside”, the judge said that he carried out a “simple little exercise” on costs, which turned out to be “quite staggering” as he found that they totaled more than £16,000.

DJ Peake said the overriding objective required cases to be dealt with justly and at proportionate cost and so, in this case, he would expect solicitors to “have an eye to the fact this was a very low-value claim” and to ensure it was dealt with expeditiously.

He referred to the Roget’s Thesaurus entry for ‘reasonable’, which gave as alternatives the words “sensible, rational, logical, fair, fair-minded, just, equitable, intelligent, wise, level-headed, practical, realistic”.

DJ Peake went on: “All of those words there suggest that to have taken no action when having worked out that there was a payment shortfall of £15 when a sum of over £2,000, I believe £2,225 to be precise, had been received, sitting tight until the 15-day period had elapsed and then taking this case out of the portal scheme was utterly unreasonable.

“The rules are there to, as the preamble to the protocol sets out, be complied with.”

The judge went on: “I ask myself: Was it not the right decision by the claimant’s solicitors, who are professionals doing a professional’s job, to contact their opponent, electronically or otherwise, and say: ‘We have received the cheques. We cannot understand why the amount you have sent is £15 light’. I cannot for the life of me understand why that was not considered to be the reasonable approach.

“I might, pushing it a bit, have been a tad more sympathetic had they written saying, ‘You are £15 light. Would you please let us have the £15, failing which you might find yourself in breach of part 7.63’. No, they do not do that, they do nothing.”

Describing the claimant’s behaviour as “opportunistic”, DJ Peake said they had acted unreasonably and, applying part 45.24, restricted its costs “only to those that they would have recovered had this been a stage 3 hearing” under the portal.

Peterborough firm Taylor Rose Law acted for the defendant. Katy Jarratt-Poole, assistant solicitor at the firm, said the case showed the importance of costs awareness, early identification of conduct issues and “taking disputes to the claimant’s door”.

She added: “In any event, it is a warm and comforting thought that on reading this judgment there will be a few ‘opportunistic’ firms out there reacquainting themselves – or acquainting themselves afresh, as the case may be – with the overriding objective and perhaps choosing a little more wisely when exiting the low-value process in search of the grail of increased costs.”

 

By Nick Hilborne

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4 Responses to “Judge’s despair as costs hit £16,000 in dispute over £15”

  1. Given costs are now a mathematical exercise and whilst agreeing this level of increased costs cannot be supported, the remedy was always with the defendants who should have used a calculator and arrived at the correct amount-can never remember Defendants make an error of calculation in the Claimant’s favour!

  2. John Bower on May 1st, 2014 at 1:53 pm
  3. What did the Defendant Solicitors do ? Surely, they ought to have paid the £15.00 to see an end to the matter. why drag it out ?

    The exit routes out of the portal are clear and the judge in my view was slightly harsh.

  4. Idris Dawjee on May 1st, 2014 at 4:50 pm
  5. Small sums may be indicative of greater errors. In my youth I remember waiting outside the bank for a girlfriend, a cashier, while the entire staff searched the books and tills for a ha’penny!

  6. Geoffrey Hartwell on May 5th, 2014 at 9:02 pm
  7. I acted for the defendant. The defendant openly admitted they had made a simple mathematical error when calculating the payment due. Being £15 short does not justify running up £16K in costs to dispute that underpayment. C should have pointed out the underpayment if it had been acting reasonably.

    The first the defendant knew of the £15 underpayment was when C filed the Reply in the Part 7 proceedings. When C left the portal they simply said D had not paid, so D provided proof of the payment and encashment of that payment. Once at Reply stage in Birkenhead there is no AQ so the next step where liability is not disputed is a disposal hearing. Thus the defendant did nothing to drag it out.

  8. Sarah Robson on May 6th, 2014 at 9:18 pm

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