CPR 45.29J Case Study: Claiming Exceptional Costs in a Fixed Costs Matter

 

 

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What is Covered by CPR 45.29J?

It has been established that, in the majority of cases that are submitted to the MOJ claims portal, fixed costs should apply under CPR 45 irrespective of whether their ultimate value is in excess of the Portal limit of £25,000. However, in cases that start off on the claims portal, but are then allocated to the multi track, they escape fixed costs.  However, what happens to cases that were initially submitted on the Portal, but a Solicitor later comes to realise is in excess of £25,000 but is never allocated to the Multi Track?  The default answer is that fixed costs still apply, albeit for non-Portal work however, in specific circumstances CPR 45.29J covers claims for costs exceeding fixed recoverable costs.

Please note that this article relates to the CPR as they stood prior to the fixed costs reforms on 1 October 2023 as can be found here. These Rules continue to apply to all cases issued prior to 1 October 2023, or in PI cases, where the cause of action arose pre-1 October 2023.  As such references to the CPR may be different to those that currently exist in the present CPR.

We continue to assist in post-1 October 2023 fixed costs disputes, and therefore please do not hesitate to get in touch regarding the same.

Under tCPR 45.29J of the Civil Procedure Rules;

“(1) If it considers that there are exceptional circumstances making it appropriate to do so, the court will consider a claim for an amount of costs (excluding disbursements) which is greater than the fixed recoverable costs referred to in rules 45.29B to 45.29H.

(2) If the court considers such a claim to be appropriate, it may—

(a) summarily assess the costs; or

(b) make an order for the costs to be subject to detailed assessment.

(3) If the court does not consider the claim to be appropriate, it will make an order—

(a) if the claim is made by the claimant, for the fixed recoverable costs; or

(b) if the claim is made by the defendant, for a sum which has regard to, but which does not exceed the fixed recoverable costs,

and any permitted disbursements only.”

 

Case Study: How ARC Costs Claimed Exceptional Hourly Rates in a Fixed Costs Matter

ARC Costs recently assisted in an employer’s liability personal injury claim and were successful in claiming hourly rates costs in excess of fixed costs rates due to exceptional circumstances of the case.

The claim was initially submitted to the Portal and the Defendant accepted liability for the accident. As the investigations proceeded, it became obvious that the injuries were more severe and more complex than were initially thought.

The Claimant required the opinion of multiple experts, was given a prognosis of two years for his symptoms, and was required to find an alternative career to prevent his symptoms from worsening. The case was ultimately settled pre-issue however, and the Claimant accepted a Part 36 offer in the sum of £125,000, concluding matters save as to costs.

ARC Costs were instructed by the Claimant solicitors to draft a bill of costs for the case and negotiate a settlement.  At this juncture, only fixed costs were being offered despite this clearly being a Multi Track type matter which, whilst substantive on the damages recovered, were significantly less than the recorded Work in Progress (WIP) and would also not allow for recovery for Counsel fees of in excess of £4,000 + VAT.

The ARC Costs team drafted and served an informal Bill of Costs to which the Defendant maintained their position as to fixed costs, and therefore Part 8 proceedings were issued to obtain an order to proceed to detailed assessment on the issue of whether fixed costs applied or not.  Formal service of the Bill of Costs ensued with service of a Notice of Commencement in response to which, Points of Dispute were served submitting this was not an exceptional matter. 

Points of Reply were prepared stating that CPR 45.29J applied for exceptional costs case due to the fact that six medical reports were required, the Claimant’s symptoms were long lasting and the Claimant was also required to make a change in career, resulting in future loss of earnings.

The Receiving Party upon the Court of Appeal decision in Qader v Esure Services Limited [2016] EWCA Civ 1109. This case was in relation to a matter that started it’s life in the portal, but was ultimately allocated to the Multi Track. The Claimant argued that fixed costs should not apply as the claim had left the Portal due to value and complexity related reasons.

The Judge in Qader case stated that the issue of allocation does not simply go to a question of the valuation of the claim, but to the issues and circumstances of the claim. Examples cited within this decision included a case which is particularly complex, where there is likely to be a trial of more than one day, or if further expert evidence is required may amount to exceptional circumstances. It was held that fixed costs did not apply in this case due to the rules stated under CPR 45.29J.

Further reliance was also placed on the recent District Judge decisions of Lloyd v 2 Sisters Poultry Ltd (Costs) [2019] EW Misc 18 (29 January 2019) (Her Honour Judge Howells) and Crompton v Meadowcroft which demonstrated recent successes in claiming exceptional costs under CPR 45.29J, aswell as Hislop v Perde and Kaur [2018] EWCA Civ 1726 which addressed the application of the test of exceptional costs.

The matter was due to be lodged for a detailed assessment hearing when the Paying Party accepted our arguments and agreed to a settlement of the bill of costs in the sum of £38,000 plus assessment costs in the sum of £1,500 plus VAT. In total, the Claimant recovered £39,800 in costs which was an additional circa. £10,000 above what would have been recoverable under fixed costs.

 

How can ARC Costs Assist?

 

ARC Costs are a team of specialist Costs Draftsmen and Costs Lawyers who can assist you in your costs matters. We can provide specialist legal advice on all issues relating to costs, including escaping fixed recoverable costs in exceptional circumstances under CPR 45.29J and the merits of your case.

In general, if a claim has been submitted to the Portal but has ultimately been found to be in excess of £25,000 value (and therefore the Multi Track limit), this factor alone is not sufficient to escape fixed costs.  If however, other factors come into play, such as complex expert evidence, multiple experts reporting on the matter or a significant loss of earnings claim becoming apparent (such as a Smith v Manchester award, or requiring the use of Ogden calculations), then your case is more likely to be deemed exceptional for costs purposes.

At ARC Costs we hold decades of experience amongst the team in assisting Receiving Parties in recovering their costs, or acting for Paying Parties in disputing any unreasonable costs they may be liable to pay.

We will assist you in all matters relating to costs, from preparing the Bill of Costs, preparing Points of Dispute or replying to the same (Points of Reply) and assisting/representing you at Detailed Assessment. We are also adept at negotiating with your opponents throughout the case to reach an amicable resolution, with 95% of cases concluding without the need for Court input on assessment.

We can also assist parties with any costs matters before your case has concluded, such as the preparation of Precedent H or Statements of Costs for Trial.

Should you wish to discuss your query with us, please do not hesitate to contact us. You may email us on info@arccosts.co.uk or call us on 01204 397302. Alternatively, you may fill out the contact form at the top of the page, and a specialist costs expert will contact you to discuss your case.

 

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