FIXED COSTS OUSTED WHEN THE PARTIES AGREE COSTS ARE TO BE THE SUBJECT OF A DETAILED ASSESSMENT: COURT OF APPEAL DECISION TODAY

In the judgment today in Doyle -v- M&D Foundations & Building Services Limited [2022] EWCA CIV 927 the Court of Appeal found that it was possible for parties to contract out of the fixed costs provisions of the protocols.

THE CASE

The parties settled a case by consent order. That provided for costs to be the subject of a detailed assessment.

By a consent order dated 18 July 2018 (“the Order”) the appellant was ordered to pay the respondent damages of £5,000 in respect of an injury the respondent had suffered during the course of his employment by the appellant. The Order further provided that the appellant was to pay the respondent’s costs, “such costs to be the subject of detailed assessment if not agreed”.

THE RIVAL CONTENTIONS: DID FIXED COSTS APPLY?

 

The claimant lodged a bill of costs. The defendant argued that fixed costs applied.  The claimant succeeded on the argument before the District and Circuit Judge.  The defendant appealed.

 

THE DEFENDANT’S UNSUCCESSFUL APPEAL TO THE COURT OF APPEAL

The Court of Appeal rejected the Defendant’s appeal.

“In the present case the agreement reached was not the result of the acceptance of a Part 36 offer: the parties’ intentions are not to be understood in that highly restrictive context and there is no inherent ambiguity in the reference to detailed assessment, internal inconsistency within the terms of the Order or other “indication” that detailed assessment did not bear the meaning ascribed to it under the rules. Although Adelekun appears, on its face, to be a decision on similar facts to the present case, it was in reality a quite different situation, rooted in the parties’ use of the Part 36 offer and acceptance mechanism. No such fetter on the application of the natural and ordinary meaning of the agreed wording as to costs arises in the present case, where the parties reached a free-standing settlement agreement. That agreement included a simple and well-understood provision that the appellant would pay costs subject to detailed assessment, that is to say, on the standard basis.”