Cases which leave PI protocols for multi-track “still attract fixed costs”

RTA: fraud allegation

RTA: fraud allegation

The fixed recoverable costs regime applies to low-value personal injury claims that start under the RTA and EL/PL protocols but then exit and proceed on the multi-track, a circuit judge has ruled in a decision which is said to have implications for the conduct of higher-value cases as well.

HHJ David Grant said the provisions of the CPR effectively realised Lord Justice Jackson’s ambition to introduce fixed costs into the lower reaches of the multi-track.

The case, Qader & Ors v Esure Services Ltd [2015] EWHC B18 (TCC), concerned a claim by three claimants for damages put at between £5,000 and £15,000, but the defendant insurer alleged that the driver had deliberately induced the accident by braking sharply.

A deputy district judge directed that the case be allocated to the multi-track, and listed it for a case and costs management conference, and also set a date by which budgets had to be filed.

The matter then came before District Judge Salmon, who ordered that CPR 45.29A fixed costs would apply to the claimant’s costs, and not costs management. Refusing permission to appeal, he said the rule was clear on its face that the determining factor was not track but value in respect of the operation of the fixed costs regime.

He also noted that CPR 45.29J allowed the court to depart from the fixed costs regime if there were exceptional circumstances, while CPR 3.12(c) “clearly contemplates costs on the multi-track being subject to fixed costs”.

HHJ Grant gave the claimants permission to appeal but then rejected their case.

He said: “I reject Mr Skeate’s key submission [for the claimants] that ‘there is no room whatever for doubt that the fixed recoverable costs scheme was implemented only in relation to the fast-track’.

“To the contrary: the effect of inserting section IIIA into part 45 was to implement a fixed recoverable costs scheme in low-value personal injury claims arising out of a road traffic accident, which start under the RTA protocol but no longer continue under that protocol or the stage 3 procedure, but instead now proceed on the multi-track…

“Insofar as it is necessary to do so, I also note that Jackson LJ expressly contemplated ‘the possibility of introducing a scheme of fixed costs… into the lower reaches of the multi-track’. For the reasons stated above, it would appear that by amendment to the CPR, such a scheme of fixed recoverable costs has indeed been introduced into ‘the lower reaches of the multi-track’, certainly as regards cases which began via either the RTA protocol or the EL/PL protocol.”

Despite the allegation of fraud, HHJ Grant ruled that it was still a low-value claim. He observed that it was “discernibly of a different nature from the types of allegation often made in cases of commercial fraud in proceedings in the Chancery Division, the Commercial Court, or the TCC”.

He explained: “The central factual issue in the present case is simply whether the first claimant applied the brakes in such a manner that he induced a relatively minor road traffic accident to occur.

“While the claimants’ overall probity will no doubt be explored at trial, perhaps involving consideration of their conduct before the accident, at the accident, and indeed after the accident, and it may be necessary to consider some documents (such as relevant medical records), the overall nature of the case to my mind still answers the description of a low-value personal injury claim arising out of a road traffic accident, albeit proceeding on the multi-track.

“It does not therefore appear that the nature of the underlying proceedings is such that the implementation of fixed recoverable costs for such a claim would – of itself – cause affront to the overriding objective.”

Horwich Farrelly acted for the defendant and partner Paul Brandish said: “The application of the decision is wider than low value cases in which fraud has been alleged. There is a current tactic deployed by many claimant solicitors to submit claims through the portal even though the claim is likely to be in excess of £25,000.

“The behaviour seen by many insurers is that the claimant solicitors use the portal to obtain an early admission of liability then stonewall insurers’ attempts to progress the case whilst medical evidence is obtained without reference to the insurer. In these cases the first insurers often know of the full value of the claim is service of the medical evidence with proceedings. The judgment in Qader means that claimants adopting this tactic are now subject to FRC.

“Claims that are valued significantly in excess of £25,000 are likely to escape from FRC under 45.29J. There will, however, be an interesting counter argument as to conduct to be deployed against claimant solicitors who can be shown to consistently use this tactic. Further, if a claim is pleaded in excess of £25,000 but settles under that amount, then claimant solicitors could well find themselves bound by FRC.”

    Readers Comments

  • Simon Porter says:

    Essentially, this judgment opens the door to all Defendant insurers to put forward any argument they wish, placing any Claimant that they choose to the higher burden of proving that they are not a fraudulent claimant and yet, at the same time, there is no costs risk to the Defendant insurer whatsoever. The costs they will pay are the same as any allocated claim with a hearing date; it column C. A travesty of justice and an ‘open season’ for the insurers.

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