Test to escape fixed costs in ex-portal cases is “high bar”

Stewart: Swings and roundabouts

The ‘exceptional circumstances’ test by which claimants whose cases exit the RTA portal can claim more than fixed recoverable costs is a high, rather than a low, bar, the High Court has held.

It said such cases must be judged against others that have left the portal, rather than all portal cases.

Mr Justice Stewart was ruling in Ferri v McGill [2019] EWHC 952 (QB), an appeal against a decision of Master McCloud, sitting as a deputy costs judge.

The claimant’s claim, handled by Leigh Day, was initially run through the portal, and liability was admitted. But when the defendant made a settlement offer of £1,500, the claimant instructed new solicitors, City firm Fieldfisher.

Fieldfisher said it did not consider the case to be a portal claim on the basis of the injury suffered by the claimant, and after an operation, some two years after the accident, the claim settled without issue of proceedings for £42,000. The claimant sought more than fixed recoverable costs.

Master McCloud ruled that the correct test was that that there must be some circumstance, which may include value or costs, but may also include all the circumstances of the case, which took the claim out of the general run of the type of such a case by reason of those circumstances.

She set the bar “low” because the portal was intended to deal with simple cases which would typically be fast-track cases, she said.

Mr Justice Stewart said the policy behind the fixed costs regime could be summarised as “swings and roundabouts”.

He continued: “Section IIIA expressly provides that ex-protocol cases are to remain subject to the fixed costs regime. Two of the reasons for exiting the protocol are that the claimant notifies the defendant that the claim has been re-valued at more than the protocol upper limit or that the claim is unsuitable for the protocol, e.g because there are complex issues of fact or law.

“In other words, the rules mandate fixed recoverable costs in such cases, subject only to subsequent judicial allocation of the claim to the multi-track or rule 45.29J(1). ‘Exceptional circumstances’ have therefore to be evaluated against those cases which are covered by part IIIA.”

The master was wrong to set a low bar for two reasons, he held. First was the decision in Hislop v Perde – which had not been made at the time of her decision – and the obiter dictum of Coulson LJ that “it goes without saying that a test requiring “exceptional circumstances” is already a high one”.

Second were the policy reasons reiterated in fixed-costs regime cases, which, while allowing for ‘exceptional circumstances’ to depart from the regime, “require a more strict, not a ‘low bar’, approach”.

Stewart J ruled that the master also used the wrong basket of cases against which to judge ‘exceptional circumstances’. It must be construed against the setting (i.e the basket) in which it appears, he said.

“I have no evidence to support the [claimant’s] argument that there is no qualitative difference between a basket comprising (1) cases which remain in the protocol, or (2) cases which remain in the protocol and which exit the protocol or (3) cases which exit the protocol. If anything, first impressions suggest the contrary to [this] argument.”

Stewart J added that how the regime may impact on a particular litigant or lawyer could not inform the construction of exceptionality.

He ruled that the master erred in law on both the central questions raised in the appeal and ordered that Master Gordon-Saker, who acted as an assessor to him, reconsider whether exceptional circumstances existed.

Benjamin Williams QC (instructed by Fieldfisher) for the claimant/respondent, Roger Mallalieu (instructed by Horwich Farrelly) for the defendant/appellant.

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