Claimants pay the price for issuing instead of using RTA portal

Cut: costs heavily reduced

Claimant solicitors who sent the claims notification form (CNF) to the wrong insurer and then issued proceedings rather than resend it under the RTA protocol have been limited to the fees they would have received had they done so.

Master Simons in the Senior Court Costs Office said the Costs Officer at first instance had been wrong to decide that an order for detailed assessment on the standard basis prevented him from considering whether the costs should be restricted in that way.

Davies & others v Greenway involved claims by a driver and his two passengers after a rear-end shunt. Their solicitors, Lyons Davidson, accidentally sent the CNF to AXA in Ireland rather than England.

When AXA, which admitted liability, discovered this, it invited them to resubmit the CNFs. Instead, Lyons Davidson tried to correspond with AXA and, having received limited response, issued part 7 proceedings.

The claims subsequently settled for around £1,100 each, and the consent order provided that the costs would be paid on the standard basis to be assessed if not agreed. The claimants’ solicitors then sought detailed assessment on a £17,400 bill.

Costs Officer Pigott found that he did not have the power to overturn the consent order and was thus going to deal with the costs on a standard basis, rather than the fixed recoverable costs regime.

On appeal, the defendants argued that the order did not oust the court’s power under CPR 45.24 (failure to comply or electing not to continue with the RTA protocol) to limit the costs to protocol levels.

Master Simons disagreed, saying it seemed implicit from the wording of the rule that the power to restrict the costs has to be exercised when judgment is given. “If the defendant wished to seek an order under [rule 45.24], the time for doing so was after the terms of the settlement had been agreed and the parties were negotiating on the question of costs.

“He did not do so and consented to an order for there to be a detailed assessment on a standard basis. That is a contract which the costs judge does not have the power to vary. Furthermore, there is an order of the court which the costs judge is under an obligation to act upon.”

Even if this analysis was wrong, Master Simons said, the power in rule 45.24 is discretionary, not mandatory.

However, he continued that the detailed assessment allowed him to consider the reasonableness of the claimants’ conduct, fortified by the comments of Lord Justice Moore-Bick at the permission hearing of Smith v Wyatt [2011] EWCA Civ 941 that costs judges need not go through a bill on a line-by-line basis.

Stripped down, Lyons Davidson were seeking profit costs in excess of £9,000, a sum Master Simons said was disproportionate. Though criticism of the defendant’s conduct could be made, “I am satisfied that the failure on the part of the claimants to comply with the RTA protocol has led to disproportionate costs being unreasonably and unnecessarily incurred”.

Had they acted reasonably, they would not have been entitled to recover any more than RTA protocol costs, “and it seems to me that it creates an injustice if the claimants’ solicitors were to profit as a result of their unreasonable conduct”.

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