CPR45 – Fixed Costs in Exceptional Circumstances
CPR45 Fixed Costs
Part 45 of the CPR sets out the rules for fixed recoverable costs in cases such as Personal Injury Claims. The amount of costs recoverable by the successful party are prescribed by statute and in personal injury cases, the fixed costs regime usually applies to cases which settle on the MOJ Claims Portal, with a value of less than £25,000 in damages.
When a claim settles outside the claims portal, with a value of more than £25,000 (following any allocation to the Multi Track), the costs are usually significantly higher as they are not capped, and an hourly rate will usually apply.
There are many cases in which there are disputes regarding the scope of CPR45 fixed costs. In many instances, Defendant Solicitors will argue that fixed costs are applicable as they will want to limit the amount of costs payable to the successful Claimant solicitors.
CPR45.29J provides an exceptional circumstances rule and states “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…”
The application of this rule has been discussed in the cases of Ferri v Gill and Qader v Esure.
Qader v Esure Services LTD  EWCA Civ 1109
The question of exceptional circumstances in CPR 45 fixed costs arose in the Road Traffic Accident case of Qader v Esure. The claim started off in the low value claims portal however, liability was denied, and the claim could no longer continue on the portal. The claim was the allocated to multi track due to fraud allegations.
Section iiia of CPR 45 deals with cases which start off in the portal but then exit the process. It states that only fixed costs can be recovered on cases which have started the life on the Claims Portal.
The Court of Appeal held that fixed costs did not apply in this matter and Briggs LJ stated the following:
“The language of CPR 45.29 did not expressly limit fixed recoverable costs to the fast track or expressly exclude the multi track, to the contrary it appeared to unambiguously apply the fixed recoverable costs regime to all claims which started within the Portal but later exited the same”
“The rules here must be seen as containing a drafting error by reference to the history of the fixed recoverable costs regime, and in particular the fact that there had been a consultation process preceding its implementation”
“The drafting error would therefore be rectified by the insertion of words in to CPR 45.29B, as shown below: Application of fixed costs and disbursements – RTA Protocol 45.29B Subject to rules 45.29F, 45.29G, 45.29H and 45.29j and for so long as the claim is not allocated to the multi track, if, in a claim started under the RTA Protocol, the Claim Notification Form is submitted on or after 31st July 2013, the only costs allowed are— (a) the fixed costs in rule 45.29C; (b) disbursements in accordance with rule 45.29I.”
The Court of Appeal’s decision in this case concludes that in cases which were placed on the MOJ Portal prior to allocation to Multi-Track, section iiia does not apply.
Ferri v Gill 2019 EWHC 952 QB
In Ferri v Gill, CPR45 costs were in question when the damages claimed on a case, which commenced as a portal case, were in excess of 25,000 as it settled for £42-000 pre-issue. The claimant’s symptoms continued after the prognosis period proposed by the medical expert and resolved following an operation and the Claimant had also instructed an alternative firm of Solicitors. The Claimant’s Solicitors applied for a costs assessment stating that CPR45 costs should not be applicable due to the exceptional circumstances of the case.
The Court of Appeal held that fixed costs should be applied in this case and provided guidance on the threshold for “exceptional Circumstances.”
Mr Justice Steward referred to the case of Hislop V Perde, (where it was concluded that “the Defendant’s late acceptance of the Claimant’s Part 36 offer should not always be regarded as “exceptional”.”)
““Exceptional circumstances” takes its colour from the setting in which it appears. Considering the context of the fixed recoverable costs regime and the importance or very few exceptions and certainty, this test requires a strict approach. As per the Court of Appeal in Hislop, “It goes without saying that a test requiring “exceptional circumstances” is already a high one”.
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The ARC Costs team are very experienced in dealing with fixed costs disputes. We are always happy to help with CPR45 fixed costs challenges. For more information on legal costs, please find out more about our speciality areas of expertise, and our services, such as bills of costs on our legal costs page.
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