The RTA protocol has processed over six million claims – but costs points are still going to appeal

Two decisions of the Court of Appeal in recent weeks have referred to approximately six million claims having been started in the low value RTA protocol since its introduction. That number is roughly equivalent to one in ten of the population of England & Wales. Both recent decisions – Aldred v Cham and Lai Ho v Adelekun – examine detailed points of the associated fixed costs regime and are said to affect significant numbers of cases.

The court was clearly alive to the wider factors driving these sorts of disputes, these being: “the understandable desire on the part of claimants to seek, through the rules setting out the exceptions, to recover from defendants more than the single sum stated in the tables by way of fixed costs, and the equally understandable wish of the defendants, wherever possible, to restrict the claimant’s recovery to those fixed costs alone.” [Coulson LJ in Aldred.]

This same tension is very likely to emerge again when or if any future administration looks to extend fixed costs across the fast track and in ‘intermediate claims’ valued up to £100,000. The Ministry of Justice (under former Lord Chancellor David Gauke) was minded to take forward that approach in its consultation paper issued in the spring.

Reverting to the cases, the question in Aldred was whether the cost of counsel’s advice on quantum in a child’s claim was a disbursement which should be allowed in addition to fixed recoverable costs? The relevant rule allows for the recovery of disbursements “reasonably incurred due to a particular feature of the dispute”. It might be thought that the claimant being a child would obviously be such a feature?

Coulson LJ thought otherwise: being a child (or a non-native speaker) was a feature of the claimant rather than of the dispute. In his view things such as the accident circumstances, the question of blame, the extent of any injuries or the need for an unusual type of expert evidence would properly be “features of the dispute”. He said that his interpretation was “consistent with the overall purpose of the fixed recoverable costs regime, and in particular its aim of ensuring that, save for express exceptions, the amount recoverable is limited to the sums set out in the tables by way of fixed recoverable costs.”

Lai Ho turned on another ostensibly technical point. Days before trial, the claim settled by way of acceptance of a part 36 offer which provided that the offeror (here, the insurer) would meet the claimant’s “legal costs in accordance with Part 36 Rule 13 of the Civil Procedure Rules such costs to be subject to detailed assessment if not agreed”. The question was whether that meant fixed recoverable costs or ‘conventional’ costs at large?

If the former, the amount payable by the insurer would be around £15,000. It would be around £42,000 if the latter. In essence the point is whether acceptance of this offer meant that the parties had or had not contracted out of fixed costs?

Giving the lead judgment, Newey LJ found that on proper interpretation the terms of the offer that was accepted did not remove the claim from the fixed costs regime. He noted that in 2011 the court had previously found, in Solomon v Cromwell, that while the fixed costs regime necessarily involved an assessment of sorts (especially regarding disbursements and exceptional circumstances, if any), that process could not properly be regarded as representing an assessment on the standard basis.

As a consequence, it could not be said to follow in the present case that “reference to ‘detailed assessment’ [in the wording of the part 36 offer] should be taken to imply an intention to displace the fixed costs regime where there are other indications that that was not intended.” He added – without much supporting analysis – that the prospect of the claimant’s solicitors regarding the offer as proposing conventional rather than fixed costs was “inherently improbable”.

Both cases therefore lean towards ensuring predictability in costs in moderate value claims and therefore appear to fall in favour of the second half of Coulson LJ’s wider analysis, ie “the equally understandable wish of the defendants, wherever possible, to restrict the claimant’s recovery to those fixed costs alone.” It is also noteworthy that both achieve this by taking a less-than-obvious approach to the language used: the finding in Aldred that the claimant being a child was not actually a feature of the dispute and the decision in Lai Ho that an express reference to detailed assessment actually meant nothing of the sort.

If this is a fair summary of the direction of travel illustrated by both these recent cases then it does look as if the court is showing, albeit elliptically, a broadly purposive approach to the question of fixed costs and one which is likely to be welcomed generally by paying parties.


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Alistair Kinley, Director of Policy & Government Affairs alistair.kinley@blmlaw.com

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