ARC Costs recently assisted in a fixed costs dispute, and successfully obtained payment of a Court fee that was in dispute.

Are Court Hearing Fees Recoverable under Fixed Costs?

Court fees are one of the most common types of disbursements that can be incurred in any type of case or money claim. Fees payable to the HM Courts and Tribunals Service vary depending on the type of case, and details can be found on the Government’s website.

In fixed costs cases, Court fees are recoverable under CPR 45.29I alongside fees for expert witnesses, Counsel and any other disbursements that have been reasonably incurred as a result of the dispute.  The recovery of Court fees is an often contentious issue in inter-partes costs disputes, particularly in the event that questions are raised as to Court fee remissions, and whether the Receiving Party was entitled to a full or partial refund on the Court fee.

The subject dispute however, involved a rather unusual set of circumstances concerning whether an agreement for costs included payment of the Court hearing fee, and also raised novel questions as to whether a failure by the Court to take payment on time, constituted a striking out of the claim and necessitated an application for relief from sanctions.

Court Hearing Fee Dispute: Facts of the Case

In a recent case dealt with by the ARC Costs team, a dispute arose in relation to the Defendant paying a Court hearing fee. The case was settled via a Part 36 offer and acceptance, and the total fixed costs incurred in the case amounted to £8,824. These costs were made up of fixed costs +VAT in the sum of £5,480, agreed Court fees in the sum of £455, an agreed medical report in the sum of £1,248 and a disputed Court hearing fee in the sum of £545.

The issue at hand was the Paying Party’s refusal to pay the Court hearing fee in the sum of £545 as it had been missed from an original Costs Schedule (for which payment had subsequently been raised by the Paying Party), and later amended.

The Claimant had ordered to pay the Court hearing fee via a Court Order months prior to settlement of the case. The Claimant’s representatives had requested that the Court deducted the hearing fee from their legal representative’s PBA Account when the Claimant filed their pre-trial checklist. On the date that the case settled by way of a Part 36 Offer, the Court hearing fee had not been deducted from the Claimant’s PBA Account. Due to this, details of the fee were omitted from the Schedule of Fixed Costs.

On the same day however, following the generation of the Schedule of Fixed Costs, the Court deducted the hearing fee from the PBA Account in the sum of £545. Following this, the Paying Party paid the Claimant’s damages and costs in the sum of £8,279, which was the full amount minus the hearing fee in dispute.

When the issue was identified six days later, the Receiving Party notified the Paying Party that the hearing fee had been missed from the Costs Schedule.

The Paying Party refused to pay the outstanding Court hearing fee. The Receiving Party argued that it was a genuine mistake that details of the Court fee were omitted from the Costs Schedule, and the Paying Party would have been aware that the Court fee was payable due to the Court Order which had been received several months prior.  Nevertheless, the Receiving Party maintained their position and refused to engage in further settlement discussions.

Instruction of ARC Costs to Recover the Court Hearing Fee

At this point, the Receiving Party instructed ARC Costs in order to recover the Court hearing fee from the Paying Party. ARC Costs proceeded to prepare and lodge an application to the Court for a fixed costs assessment under CPR 36.20, in respect of the outstanding hearing fee. The Court subsequently ordered that the Paying Party file and serve submissions, and that the Receiving Party to file and serve submissions in response, and to proceed to an assessment hearing thereafter.

ARC Costs submitted a number of arguments to the Paying Party in their submissions, including the fact that CPR 45 overrules any purported offer and acceptance as under CPR45.29I (2)(d), and that Court fees are recoverable disbursements as part of fixed costs. ARC Costs also highlighted that, under Lamont v Burton [2007] EWCA Civ 429, the Court does not have discretion to override the recoverability of fixed amounts irrespective of the circumstances (albeit Lamont did relate to the issue of fixed success fees at the time).

Both parties’ submissions had been filed when a Hearing Notice was received from the Court and a date was set. It was at this juncture, the Defendant proposed an offer where both parties walked away from proceedings with each side bearing their own costs, also known as ‘drop hands’ offer. This was rejected by the Claimant’s representatives.

At this juncture, initial preparations were being made for the application hearing when the Paying Party indicated they were intending to raise additional submissions.  In a somewhat novel argument, reference was made to the terms of the directions order, which stipulated that the Court fee had to be made by a certain date, in default of which the claim would automatically be struck out.  The Paying Party argued that, as the Court had failed to deduce the Court fee by the fixed date recorded in the directions order (despite the Receiving Party having requested payment be deducted a significant amount of time earlier via the PBA Account), that the claim had automatically been struck out and an application for relief was required.  Reference was also made to the contents of the Court Order which stipulated that in order to make payment of a Court fee, the Court should be contacted by telephone to make payment by card.

ARC Costs on behalf of the Receiving Party responded to these additional submissions, stating that the payment of the Court fee had effectively been made when the email request had been sent to the Court for payment to be taken (similar to if a cheque had been failed to be cashed by the Court in a timely fashion), and that the suggestion that the Court fee had to be paid via telephone was an unreasonable interpretation of the Order.  This would have rendered all other methods of payment of the Court fee, from the view of the Paying Party, as invalid and it was not accepted that this was the correct interpretation of the directions order, particularly in the absence of any ‘must’ requirement to telephone the Court.

The matter looked set to proceed to a contested application hearing, and preparations began to be undertaken for the same. 

Ahead of the hearing, ARC Costs wrote to the Defendant maintaining the Claimant’s stance and advising the opponent of the Claimant’s costs to date but proposing a reasonable offer in respect of costs to facilitate settlement along with payment of the outstanding hearing fee.

The Defendant ultimately conceded their position a matter of days before the application hearing was due to take place, accepted the Receiving Party’s costs offer along with confirmation that the hearing fee would be paid, and thereafter the parties informed the Court that the hearing could be vacated.

How can ARC Costs Assist?

The team at ARC Costs have the experience and expertise to assist on any legal costs dispute. We regularly advise on disbursements incurred in fixed costs disputes, and provide advice regarding the steps which can be taken to ensure the best chance of recoverability of the fees which you have incurred in your case.

We can then assist in preparing a detailed Bill of Costs on your behalf if necessary, or conducting fixed costs assessment proceedings under CPR 36.20, as well as negotiating with the other side on the level of costs to be recovered.  As independent experts, out services extend to either Paying or Receiving parties, and we often deal with disputes to Bills via settling Points of Dispute or Replies, as well as providing costs advocacy services if needed.

Should you require any assistance or free initial advice, please feel free to call us on 01204 397302, or email one of our costs experts direct on info@arccosts.co.uk.

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