What are Fixed Application Costs?

Fixed Costs in litigation are specific amounts prescribed by CPR 45 that are recoverable by one party from another in certain circumstances, in particular cases involving personal injury in Road Traffic Accidents, Employer’s Liability and Occupier’s Liability, and are usually less than £25,000 in damages value. Taken in its literal sense, it means that the costs are fixed for the conduct period. Variations can apply, one of which is the fixed application costs associated with the making of any interim applications in such matters: 

CPR 45.29H states:

“ Where the Court makes an order for costs of an interim application to be paid by one party in a case to which this Section applies, the order shall be for a sum equivalent to one half of the applicable Type A and Type B costs in Table 6 or 6A.” 

CPR 45.18(2) defines Type A fixed costs as legal representative costs, and Type B as the advocate’s costs.  Both sums are fixed at £250 + VAT each, totalling £500 + VAT.  Half of these amounts are recoverable on a successful interim application, being fixed at £250 + VAT in addition to the usual fixed costs awarded for the remainder of the case.

When Do Fixed Costs Apply?

Fixed costs apply in personal injury cases in respect of RTA, Employer’s Liability or Public Liability claims.

There are three cost regimes:

CPR Part 45 II which pre-dates the 2013 LASPO reforms and applies to pre-issue RTA cases only which concluded pre-issue.  Fixed application costs do not apply to such cases.

CPR Part 45 III applies to cases that settle under the Pre-Action Protocols for Low-Value PI claims. This is available to RTA, Employer’s Liability or Public Liability.  Fixed application costs could only apply here in respect of Pre Action Disclosure (PAD) applications, given these relate to Post LASPO, pre-issue claims.

CPR Part 45 IIIA applies to claims which no longer continue under the Pre-Action Protocols, and cover the full litigation process.  As such, interim applications and fixed application costs issues are most likely to arise under this aspect of the case.

How Do Part 36 Offers Affect Fixed Costs?

In the case of Broadhurst v Tan [2016] EWCA Civ 94, the Court of Appeal held that Part 36 overrides the rules governing fixed costs where a Claimant obtains judgment at least as advantageous as its own offer. The Claimant, therefore, was entitled to their fixed costs up until the date of expiry of the Part 36 Offer and indemnity costs thereafter.

However, in the case of Hislop v Perde [2018] EWCA Civ 1726, the Court of Appeal confirmed that the fixed costs regime would continue to apply where a Part 36 Offer had been accepted before Trial unless there are exceptional circumstances. It was also clarified that a late Part 36 Offer would not amount to exceptional circumstances for the purposes of CPR 45.29J. It was held to depend on the facts of the case. Furthermore, the Court went on to differentiate between the case of Broadhurst and the case of Hislop, by stating a Claimant that beats his own Part 36 Offer at Trial would be entitled to indemnity costs rather than fixed costs as CPR 36 expressly reserved the cost consequences as set out in CPR 36.17.  The same cannot be said for any Rule specifically stating that the same would apply for late acceptance of a Part 36 Offer.

Fixed Application Costs: Sharp v Leeds City Council [2017] EWCA Civ 33

The case of Sharp concerned a low-value Personal Injury claim where the Claimant allegedly tripped and fell on a defective footpath. It was alleged that the Claimant suffered an injury to her wrist. A Claims Notification Form (CNF) was submitted by the Claimant within the Portal. However, the claim then exited the Portal as the Defendant failed to disclose the required information following the Claimant’s requests and a Pre-Action Disclosure (PAD) application was then made by the Claimant. The question was then whether CPR 45.29(H) applied to this and whether a PAD application was, in fact, an interim application.

In the first instance, it was held that standard costs applied, and they were assessed on the standard basis sat £1,250.

An appeal was then heard at the County Court, which held CPR 45.29(H) did apply, and the Claimant was only entitled to fixed costs calculated at £305. It was also held applications should be classed as interim from the commencement of the CNF until final settlement.

The Court of Appeal dismissed a further appeal from the receiving party on the issue and reaffirmed that fixed costs would apply for PAD in accordance with CPR 45.29(H). The Court clarified the objective and intent of the fixed costs regime, which is that from the moment of entering the Portal, fixed costs would apply. A PAD is, in fact, an interim application as it follows the CNF and comes before the Part 7 proceedings and final judgment.

Fixed Application Costs: Jean Crawshaw v Alfred Dunhill Limited [2017] EWCA 

The case concerned a low-value PI claim where the Claimant tripped over unmarked cabling whilst attending a golf tournament and sustained an injury. The Claimant requested disclosure of the contract between the Defendant and a third party as well as further documentation. When this was not disclosed, the Claimant issued a PAD application which was resolved without the need for a hearing. The Court made an order for fixed costs. However, the question was whether the Claimant was entitled to recover ‘advocates costs’ in circumstances where no advocate was required. The Court held that the Claimant had no entitlement to advocates costs because none had been required. The costs of legal representatives and advocate’s costs have been separated under CPR 45 and thus only half of the Type A costs were permitted as fixed application costs.

Summary 

• Fixed application costs will apply to PAD applications once claims have fallen out of the Portal.
• An advocacy fee cannot be claimed where no advocacy was provided, which would reduce fixed application costs from £250 + VAT, to £125 + VAT.
• Common law dictates that ‘interim applications’ constitute work done up to final judgment.  Applications made in respect of costs disputes should therefore fall outside the scope of the definition of an interim application.

How Can ARC Costs Assist? 

ARC Costs are a team of specialist Costs Draftsmen and Costs Lawyers who have vast experience in dealing with both paying party and receiving party costs disputes. We are happy to assist and advise on any fixed costs matter. We deal with costs recovery and can assist in advising you in relation to your costs entitlement. We can also assist with costs enforcement to ensure your costs are paid and recovered once agreed or assessed. If you require any further information or would like our assistance, please contact us on 01204 397302, via email on info@arccosts.co.uk, or via our live chat function below.

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