Regional costs judge applies fixed costs to RTA claim that settled for £350k

Hines: Strategy issue for some claimant firms

A road traffic claim that settled pre-issue for £350,000 was subject to fixed recoverable costs (FRC) because it began in the portal, even though it was later removed because of its value, a regional costs judge has ruled.

The decision by District Judge Jackson in Canterbury has been described as “a consequence of the change in the rules” earlier this year in the wake of the Court of Appeal’s decision in Qader v Esure.

According to Stephen Hines, a barrister at Citygate Chambers who acted for the defendant, the FRC worked out to be £35,930 plus VAT – “not too bad on a swings and roundabouts basis, some would say”.

The claimant, who suffered a brain injury, did make a successful application for an hourly rate assessment under CPR 45.29J on the grounds of value and complexity given the amount of medical evidence.

However, because the claimant did not beat the FRC figure by more than 20% on assessment, Mr Hines said he was “snapped back” to the FRC. The difference between the hourly rate costs and the FRC costs was around £2,000 plus VAT.

At the same time, because of two decisions on disbursements, the claimant nevertheless beat the defendant’s costs offer and so recovered the costs of assessment.

Mr Hines, the recently elected president of the Forum of Insurance Lawyers, said: “This case is a symptom of the change in the rules in April 2017 which followed the Court of Appeal’s decision in Qader v Esure.

“The removal of the thitherto apparent upper limit of £25,000 in CPR 45 IIIA means that, ostensibly, so long as a claim starts in the protocol, drops out and isn’t allocated to the multi-track, the regime will apply to a claim of any value.

“This may affect the strategy of some claimant firms of routinely submitting matters to the portal in the hope of extracting a quick admission of liability. The question of whether the claim was always worth more than £25,000 wasn’t explored in this case but, for future cases where this issue comes up, it probably will be.”

Here the case was never issued, but in Qader, Lord Justice Briggs repeatedly referred to cases being “properly started” in the protocols that then have to transfer to the multi-track.

    Readers Comments

  • Icarus says:

    I think the header and first couple of paragraphs are a little misleading here. Was it not the case that the Regional Costs Judge found that the claim could escape the remit of fixed costs due to value/complexity, but was compelled to apply fixed costs because of the provisions of CPR 45.29J.

    So the only reason the Court couldn’t award reasonable costs assessed on the standard basis was because the assessed costs did not exceed the 20% threshold, not because it did not satisfy the “exceptional circumstances” escape. In my mind this is very different to the Court deciding on its merits to apply fixed costs.

    I think practitioners need to undertake the arithmetic first and work out – “what would fixed costs get me and would I likely get on an actual assessment.” If the difference is less than 30% or so, it probably isn’t worth making the argument for reasonable costs anyway.

  • P says:

    Does anyone have the Judgment for this case or a similar one?

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