A claimant who took a credit hire case from the small claims court all the way to the Court of Appeal must pay her own costs because the defendant insurer’s behaviour was not “unreasonable”, appeal judges have ruled.
The only ways Louise Conlon to claim her costs would be for the court to rule under CPR 27.14 that the defendant, Royal Sun Alliance (RSA), had behaved unreasonably, or for the case to be reallocated to the multi-track.
Lord Justice Kitchin said he could see “nothing unreasonable” about the RSA’s behaviour. “The claim was properly allocated to the small claims track and RSA defended it as it was entitled to do,” he said.
“The deputy district judge had a wide discretion as to how he dealt with the hearing and, in accordance with the rules, conducted it in a relatively informal way, no doubt in an attempt to arrive at a just decision but at proportionate cost.”
Giving the leading judgment in Conlon v Royal Sun Alliance  EWCA Civ 92, Kitchin LJ said that, following Ms Conlon’s appeal, both sides were represented at Bradford County Court by junior counsel, where the judge “derived a good deal of assistance” from them.
Lord Justice Kitchin said it was only when Ms Conlon appealed again, and the parties were told that the case would be listed with Stevens v Equity Syndicate Management  EWCA Civ 93, which resulted in a major credit hire ruling, that it was clear that the small claim was being treated as a test case.
The judge went on: “Until that time it had treated the claim in just the same way that it would have treated any other low-value claim proceeding in the small claims track.”
Having considered its position, the insurer “decided that it had no wish to incur the associated costs of engaging further with the substantive issues arising on the appeal” and made two offers to Ms Conlon, both on the basis that it would pay the amount she claimed, but not her costs.
“I am satisfied that was a perfectly reasonable and responsible course for it to have taken and I do not believe it can be criticised for so doing,” Kitchin LJ said.
He also rejected the argument that the case should be re-allocated to the multi-track under CPR 26.10.
Kitchin LJ said it was “implicit” in CPR 46.13, that if that occurred, the court could backdate the re-allocation for costs purposes, as long as there were “good reasons”.
However, he said it was “far too late” to make a re-allocation order in this case, and the application for re-allocation was made four months after the filing of notice of appeal.
Lord Justice Kitchin dismissed the application for re-allocation and made no order in respect of the costs of the claim, including the latest appeal. Lord Justices Jackson and Floyd agreed.