The Court of Appeal has been asked to rule on the contentious issue of which fixed costs apply in portal ‘drop-out’ cases when they settle before trial, which has led to several conflicting first instance decisions.
HHJ Wood QC, sitting in Liverpool, last month made a leapfrog order to send the case of Bird v Acorn Group directly to the Court of Appeal.
The central issue arises from the practice of some county courts to list ‘drop-out’ cases for a disposal hearing in the first directions order, arguably skipping a stage in the fixed costs tables in CPR 45.29, and the case subsequently settles before that disposal hearing.
The question then is which stage has been reached – and particularly whether the stages are sequential, meaning you have to go through one to reach the higher fee in the next stage – and whether a disposal hearing is a trial.
HHJ Wood said: “It is apparent that there are a number of conflicting decisions from judges at first instance in relation to the application of the fixed-costs regime, and in particular whether the columns set out in the tables are to be considered individually or sequentially in stages, and whether a disposal amounts to a final hearing.
“It is understood that whilst the costs involved on this occasion are relatively small, this situation is likely to arise in many hundreds of cases and will affect other interested parties, including insurers and litigation funders, who may wish to participate in the appeal process.”
In Bird, a public liability claim, the claimant argued for the third column – meaning £3,790 plus 27.5% of the damages – while the defendant contended that the first column still applied, meaning £2,450 plus 17.5% of the damages.
District Judge Campbell ruled in favour of the claimant, saying that once the matter was listed for disposal, “the case, in my view, moved into column 3”.
She said: “There is absolutely nothing in the rules that tells the court or the parties that they must move sequentially through the columns….
“Indeed, there are a large number of cases which settle just before the disposal hearing or on the morning of it and I can take judicial notice of that fact as a judge who regularly deals with disposal lists. It cannot be right that those cases attract the same amount of costs as a case that settles after issue but before any allocation by the court.”
Matthew Hoe, partner at Taylor Rose Law, acted for the defendant on the costs issue and made the leapfrog application.
He said: “It will hopefully bring the issue to a decision conclusion sooner than would otherwise be the case and unclog the county court of the many similar cases arising. It seems to be an instance of a relatively common procedural occurrence that was not considered when the rules were drawn up from the tables in the Jackson report and the decision that was made by the Lord Chancellor to go ahead with the fixed-costs regime.”
The Court of Appeal has given a listing window between October 2015 and February 2016. Merseyside firm Michael W Halsall is acting for the claimant.