ARC Costs recently assisted in a fixed costs claim in which fixed costs were offered by the Defendant in the sum of £16,034.80. ARC Costs were instructed by the Claimant Solicitors to argue that fixed costs should not apply due to exceptional circumstances.

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.

Rules under CPR 45.29J

CPR 45.29J sets out the rules regarding claims for costs that exceed fixed recoverable costs and states the following:

“(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.”

A test for exceptional circumstances was discussed in the Court of Appeal case of Hislop v Perde 2018 EWCA Civ 1726 and the Judge stated;

“It goes without saying that a test requiring “exceptional circumstances” is already a high one. It is not a proper interpretation of the rules to suggest that there should be further obstacles placed in the way of a party who wishes to rely on that provision.’” 

Case study: Escaping fixed costs in exceptional circumstances

ARC Costs were instructed to assist in the recovery and negotiation of legal costs for a successful Claimant in personal injury claim arising from a road traffic accident. ARC Costs argued that the case should escape fixed costs due to a number of complexities associated with the claim. Some of the complexities included the following:

• The Claimant suffered from challenging and severe psychological health conditions including Post Traumatic Stress Disorder as well as other forms of anxiety and depression. The Claimant’s condition gradually deteriorated over the period of the claim which made the matter challenging both from the point of view of pursuing the claim and obtaining instructions and also the Claimant’s ability to cope generally with day to day life and also the claim itself. It was also found by the Claimant’s instructed experts that the Claimant was restricted in the open labour market as a consequence of his injuries suffered.
• The Defendant’s Solicitors instructed their own orthopaedic and psychological experts to examine the Claimant but the Defendant did not choose to disclose their evidence at all. This complicated matters further as the Claimant was unable to consider the issues of liability and causation fully in relation to the expert evidence as the Defendant reserved their position on providing the medical evidence to the Claimant.
• Upon the first attempt at the Claimant’s consultation with the Defendant’s orthopaedic expert, the Claimant had to travel from Eastbourne to Bristol for a physical examination. Upon arrival, the Claimant discovered the Consultant was not available due to administration errors on the Defendant’s part. This caused an enormous exacerbation of the Claimant’s already vulnerable stress and anxiety symptoms which had to be carefully managed by the Claimant’s Solicitors throughout the remainder of the claim.

Within their points of dispute, the Defendant argued that fixed costs should apply in line CPR 45.29. they used the argument that the case commenced in the MOJ portal, and as Part 7 proceedings were not issued, the matter was not allocated.

In relation to the complexities of the case, the Defendant submitted that they were due to the Claimant’s history of substance abuse and previous issues with depression and anxiety. They concluded that the Claimant’s solicitor’s reasoning did not justify exceptional circumstances, and as the matter was not allocated, fixed costs should apply as per Part 45.29. They submitted an offer in the sum of £16.034.80.

In the Points of Reply, ARC Costs referred to the points regarding exceptional circumstances in CPR 45.29J and to case law, including Crompton v Meadowcroft [2021] EW Misc 20 and William John Lloyd v 2 Sisters Poultry Ltd (Costs) [2019] EW Misc 18. In both cases, it was held that the case circumstances should be considered closely in any particular case where exceptional circumstances are being argued; the Court found that the prospect of disability or medical complications held to meet the criteria of “exceptional circumstances”; and thus, the work required in the claim was significantly greater than what may have been expected.

Furthermore, ARC Costs referred to the case of Qadar V Esure Services Limited & Others, in which the Court found 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 that were involved.

The parties could not come to an agreement after service of the Points of Reply and the matter was to proceed a provisional assessment. Before the matter went to an assessment, ARC Costs made a Part 36 Offer to the Defendant in the sum of £40,000.00.

When the matter came back from assessment by the Court, the Bill was assessed in the sum of £40,477.84 and thus it was clear that ARC Costs had been successful in the argument for exceptional circumstances. ARC Costs also recovered a further uplift in costs as the Claimant had beaten their own Part 36 Offer of £40,000.00. Therefore, ARC Costs were able to recover a total of £49,527.68 for the client, this figure included the detailed assessment costs in full and was inclusive of interest. ARC Costs were able to obtain a figure that was more than three times the amount offered by the Defendant.

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.

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, including fast track and multi track cases. We assist in preparing the Bill of Costs,  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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