Court of Appeal finds way to apply fixed costs to EL case wrongly run outside portal

Coulson: Part 44 applied

A claimant who wrongly began and settled their claim for noise-induced hearing loss outside of the EL/PL protocol should be limited to fixed costs under the provisions that penalise poor conduct in costs, the Court of Appeal has ruled.

This was the last resort after finding that neither the protocol nor rule 45.24 provided a mechanism which automatically applied the fixed-costs regime in such circumstances.

In Williams v The Secretary of State for Business, Energy & Industrial Strategy [2018] EWCA Civ 852, the claimant did not start his claim in the portal because it was initially against two defendants.

The response of one of them, British Tissues, led the claimant to drop that claim and continue solely against the other.

After the claimant accepted the defendant’s part 36 offer of £2,500, the defendant’s solicitors argued that the exception to the EL/PL protocol where there were multiple defendants was not triggered and so it should only be liable for the fixed costs that would have been payable under the protocol.

The claimant’s costs were put at just under £5,000, compared to £1,970 under the protocol (both figures included disbursements).

At first instance, Deputy District Judge Morris ruled that, had the claimant given his solicitors all the information he should have done, they would have realised the British Tissues claim was very weak.

He said: “Any issues in connection with the breakdown in instructions is between the claimant and his solicitors and this defendant should not be responsible for the additional costs arising. On that basis I take the view that the protocol should have applied to this case.”

DDJ Morris went on to find that CPR 45.24(2)(c) – where a case is not brought in the protocol when it should have been – applied and that fixed costs should be ordered.

On appeal, His Honour Judge Gosmark QC reached the opposite conclusion on rule 45.24 because the issue of part 7 proceedings and judgment being given were preconditions of it applying.

“I disagree with the DDJ. I cannot read CPR part 45.24 as applying when express conditions are not met. It is even more difficult to do so when interpreting the terms of a contract.

“The claim was not brought within the protocol and there are no fixed costs. The claimant is entitled to costs to be assessed on the standard basis.”

However, Judge Godsmark said that, although there had to be a provisional assessment, the district judge might well conclude that fixed costs were the appropriate sum.

Before the Court of Appeal, there was no appeal against the finding that, had the claimant behaved reasonably when providing his instructions, the claim would have been made against the defendant only under the protocol.

Lord Justice Coulson, the deputy head of civil justice, agreed with HHJ Godsmark that rule 45.24 did not apply, but went where the circuit judge had hinted but not expressly gone by saying the unreasonable failure to follow the protocol triggered the conduct provisions in part 44.

He said: “In my view, it is at this point that paragraphs 2.1, 3.1 and the warning at 7.59 of the EL/PL protocol, become relevant.

“Taken together, those paragraphs comprise a clear indication that, if a claim should have been started under the protocol but was not, and it was unreasonable that the claim was not so started, then by the operation of the part 44 conduct provisions, the claimant should be limited to the fixed costs that would have been recoverable under the EL/PL protocol.”

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