FIXED COSTS: APPLY TO DEFENDANTS AS WELL: SAUCE FOR THE GOOSE AND THE GANDER

I am grateful to John McQuater for sending me a copy of consent order made in the Court of Appeal.   The Court allowed an appeal, by consent, that the defendant to certain applications was only allowed fixed costs in an interlocutory application. Woodward-1 (This may be important because there was a first appeal in this case. The judgment in the first appeal may be referred to or relied on without appreciating that the claimant’s appeal as to costs was allowed by consent).

THE RULE

CPR 45.29H.

(1) 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.

(1A) Where the order for costs is made in a claim to which the Pre-Action Protocol for Resolution of Package Travel Claims applies, the order shall be for a sum equivalent to one half of the applicable Type A and Type B costs in Table 6A.

(2) Where the party in whose favour the order for costs is made—

(a) lives, works or carries on business in an area set out in Practice Direction 45; and

(b) instructs a legal representative who practises in that area,
the costs will include, in addition to the costs allowable under paragraph (1), an amount equal to 12.5% of those costs.

(3) If an order for costs is made pursuant to this rule, the party in whose favour the order is made is entitled to disbursements in accordance with rule 45.29I.

(4) Where appropriate, VAT may be recovered in addition to the amount of any costs allowable under this rule.

JOHN’S EXPLANATION OF THE BACKGROUND TO THE CASE

“Part 45.29H  applies, in cases subject to fixed costs under section IIIA Part 45, fixed costs for interim applications. What does not always seem to be appreciated is that this rule applies to the Defendant as well as the Claimant.  In this case the Claimant made an application, heard by the District Judge, seeking judgment on the basis of an agreement and consequential costs orders. The application was unsuccessful, as the judge concluded the parties had not reached agreement, and, accordingly, costs were awarded against the Claimant.  Although the case was subject to section IIIA Part 45 the judge assessed the Defendant’s costs at £2,443. The Claimant appealed both on the substantive issue and the costs issue.  The appeal was dismissed.  The Claimant pursued a second appeal, being granted permission by the Court of Appeal to proceed with a second appeal on ground 3 namely:

Failing to give any, or any adequate, reasons for effectively dismissing that part of the Claimant’s first appeal against assessment of costs in favour of the Defendant at £2,443 when that hearing was plainly an “interim application” for the purposes of Part 44.29H and costs should have been restricted to fixed costs accordingly.

Having secured permission to appeal the parties were able to agree terms that this ground of appeal be allowed, those terms being reflected in the attached order of Mrs Justice Carr dated 2 November 2018.

The significance of the decision is that it is not unusual for claimants to find that the defendant, on an interim application in a fixed costs case, will provide a schedule seeking assessed costs when that would not be appropriate unless the defendant succeeds in persuading the court that there are “exceptional circumstances” requiring costs to be assessed under Part 45.29J.”