FIXED COSTS DO NOT APPLY WHEN THEY ARE INCONSISTENT WITH THE TERMS OF CONSENT ORDER: JUDGMENT ON APPEAL IN THE COUNTY COURT

NB THIS DECISION WAS OVERTURNED BY THE COURT OF APPEAL IN

Ho v Adelekun [2019] EWCA Civ 1988, see the discussion here. 

I am grateful to Sam Hayman and Tom Jenkinson  from Bolt Burdon Kemp  for sending me a copy of the judgment of  His Honour Judge Wulkwik in  Miss Seyi Adelekun -v- Mrs Siu Lai Ho. (Central London County Court 18/10/2018). A copy of the judgment is available here Adelekun v Lai Ho 18 10 18 APPROVED JGMT v1. The Circuit Judge held that fixed costs did not apply to a case where a consent order had stated that costs were to be assessed.

Tom has also written on this case, his article can be found here. 

THE CASE

The claimant brought an action for personal injury damages.  The defendant made an offer to settle in the sum of £30,000. The offer stated:

“If the offer is accepted within 21 days, our client will pay your client‟s legal costs in accordance with Part 36 Rule 13 of the Civil Procedure Rules, such costs to be subject to detailed assessment if not agreed.”

ACCEPTANCE OF A PART 36 OFFER

The day after the offer was made the defendant agreed to the matter being moved from the fast track to the multi track. Re-allocation never took place.

The offer was then accepted by the claimant.

THE TOMLIN ORDER

The parties then drew up a Tomlin Order, this included the provision:

“The defendant do pay the reasonable costs of the claimant on the standard basis to be the subject of detailed assessment if not agreed…”

THE DECISION OF THE DISTRICT JUDGE

The District Judge held that the action was subject to the fixed costs regime, the claimant appealed.

THE CLAIMANT’S SUCCESSFUL APPEAL

The judgment contains a detailed review of the authorities relating to Part 36.   However the decision was primarily made about

 THE CONSENT ORDER WAS INCOMPATIBLE WITH FIXED COSTS

The claimant was successful on the grounds that the consent order was incompatible with the award of fixed costs.

“As I have found, the parties agreed in the consent order which they signed on 21 April and which was embodied in the order dated 24 April 2017 that the defendant was to pay the reasonable costs of the claimant “on the standard basis” (again my emphasis) to be the subject of detailed assessment if not agreed. That cannot be construed as an agreement to pay costs on the usual basis of fixed costs. By the time the consent order was signed on 21 April 2017 and embodied in the order dated 24 April 2017, the defendant had agreed to the matter being reallocated to the multitrack. The costs order that was agreed by the parties in paragraph 3 of the consent order was entirely consistent with the parties‟ agreement that the claim should be reallocated to the multi-track.”

THE DISTRICT JUDGE SHOULD NOT HAVE CHANGED THE WORDING OF THE CONSENT ORDER

The Circuit Judge was critical of the District Judge’s re-writing of the consent order.

37. It would have been sensible if the claimant‟s solicitors had included as a term of the consent order that the claim be reallocated to the multi-track, but I can see no reason in principle why the Court should not give effect to the parties‟ agreement that the defendant is to pay the reasonable costs of the claimant on the standard basis.

38. In the circumstances, I can see no basis for the Deputy District Judge varying paragraph 3 of the consent order of 24 April 2017 containing the parties‟ agreement that the claimant‟s reasonable costs should be paid by the defendant on the standard basis. It was not suggested that the consent order was vitiated by fraud, mistake, misrepresentation or incapacity. The claimant‟s first ground of appeal succeeds.

39. The additional ground relied on by the defendant in the respondent‟s notice for seeking to uphold paragraph 1 of the order dated 7 February 2018, namely that an order for reasonable costs on the standard basis to be the subject of detailed assessment if not agreed does not oust a fixed recoverable cost provided by the CPR, fails on the particular facts of this case”