Applications for pre-action disclosure (PAD) in cases that leave the personal injury portals are still subject to fixed costs, the Court of Appeal has ruled.
However, in his third ruling in less than three months on portal drop-out cases, Lord Justice Briggs suggested that the Civil Procedure Rule Committee might have to increase the level of fixed costs so as to incentivise defendant to comply with their disclosure obligations.
The court in Sharp v Leeds City Council  EWCA Civ 33, a paving stone trip claim, heard that PAD applications were commonplace in personal injury cases.
Here, the case left the portal and then the claimant had to make a PAD application. District Judge Heppell in Wakefield ordered costs of £1,250 under part 46.1.
On appeal, however, HHJ Saffman considered the PAD application to be an interim application within the meaning of part 45.29H, meaning the costs payable were reduced to fixed costs of £305.
Agreeing with HHJ Saffman that the fixed-costs regime applied in cases like this, Briggs LJ, giving the judgment of the court that also included Lord Justice Jackson, said: “While the difference of a little less than £1,000 may appear modest as the casus belli for successive vigorously contested appeals, the issue gives rise to important practical consequences in terms of the cost/benefit of making PAD applications in small personal injuries claims of this kind.”
The district judge’s approach would lead to unwelcome satellite litigation, Briggs LJ said, but equally he recognised that the low level of the fees would not encourage compliance by insurance-backed defendants.
Briggs LJ said: “It is plain that the fixed costs recovery will refund only a small part of the likely outlay to be incurred by those acting for the claimant in making a PAD application…
“There would be nothing to prevent recalcitrant defendants from simply failing in their disclosure obligations, waiting to see if the claimant was prepared to incur the uneconomic expense of a PAD application, and then simply complying with any order made by doing precisely that which, under the protocols, the defendant ought to have done in the first place.”
He said either that claimants should seek higher costs under the ‘exceptional circumstances’ rule in part 45.29J, or “for the future”, the rule committee might need to recognise “that the fixed costs regime needs to be kept under review, and defects in it remedied by adjustment of the fixed allowances where that can be shown to be justified”.
He explained: “It may well be that the frequency with which defendants fail to comply with their protocol disclosure obligations may make it difficult to pass the exceptional circumstances hurdle in part 45.29J, although I would not regard deliberate disregard of those obligations as unexceptional merely because it was frequently encountered.
“It may be that the very limited recovery of expenditure on a PAD application under the fixed costs regime means that such applications are not as effective as a means of sanctioning breach of protocol disclosure obligations as they should be.
“If that is made good by appropriate evidence, then it seems to me that some consideration by way of review to the establishment of a more generous, but still fixed, recovery of costs of such applications would be justified.”
In November, Briggs LJ ruled on which fixed costs apply to portal ‘drop out’ cases listed for a disposal hearing, and that cases which exit the protocols and then proceed on the multi-track are not subject to fixed recoverable costs.