“THERE IS NO PORTAL FOR LOW VALUE PRODUCT LIABILITY CLAIMS”: FIXED COSTS DID NOT APPLY
I am grateful to Paul Balen for sending me a case report of a product liability case he was involved in. The judge found that a product liability case is not required to be lodged in the portal. This had an important impact on costs. I have reproduced the report below, highlighting issues of particular relevance.
Product Liability case report
This claim arose from the Claimant biting into a foreign object found in a box of cereal causing damage to his teeth. He notified the supermarket from which the cereal was bought and his claim was passed to its solicitors who requested and were granted permission by the claimant for a medical examination. The expert confirmed in his report that the Claimant’s injuries were consistent with the index accident. The Claimant was then contacted by RSA who admitted liability. He requested clarification as why he was having to deal with so many parties and RSA confirmed that it acted for the producers of the cereal. They said they would settle his claim but would only do so if he signed acceptance of the findings of the dental report. As he was unhappy with some of the wording the Claimant declined to do so but said he was happy to consider an offer and negotiate a settlement. The insurers refused to make an offer. The Claimant asked if he should obtain legal advice and if he did so asked if the insurers would pay his legal fees which they said they would.
Although the lay claimant would not be expected to know this it can be assumed that RSA was accepting liability of its insured as a producer of a defective product under the Consumer Protection Act 1987 which incorporated the European Product Liability Directive 85/374/EEC. Following the insurer’s confirmation on fees the Claimant instructed us to act on his behalf. We contacted RSA in an attempt to open negotiations. The insurers insisted that a claim be filed in the portal and refused to extend limitation for negotiations on the grounds that they never did so. We made a Pt 36 offer which was ignored. We explained to the insurers that the Portal did not cover product i.e. non duty of care cases.
Protective Proceedings were issued with the Claimant’s pleaded claim valued at £10,531.30. The Defendant instructed DACB and served a Defence claiming the matter should have been filed in the portal. A Reply to the Defence on the point was served and a reduced Pt 36 offer made. That too was ignored. Having been allocated to the Fast Track the claim was listed for Trial on the 4 August 2020.
On 8 July 2020 in a final attempt to settle the Claimant made a Part 36 offer in the sum of £5000.00. Despite indicating that an offer would be made to the Claimant as early as March 2018, the Defendant’s only offer was made on 22 July 2020, i.e. 13 days before trial, being an offer of £3,500 plus fixed costs and disbursements pursuant to CPR 45.29E / 45.29I. When this was rejected by the Claimant, exactly 21 days after it was made and 7 days before trial, the Defendant eventually accepted the Pt 36 offer of £5000 on the 29 July 2020.
The Claimant sought costs on an hourly rate basis. The Defendant maintained its submission that it would only offer costs equivalent to fixed costs pursuant to CPR 45.29C, Table 6B (Part B) for a claim which settled post issue- post listing – pre Trial for Public liability matters.
We argued that:
The Claimant instructed solicitors on the defendant’s insurer’s suggestion given that quantum could not be agreed. The Claimant asked for, and received, confirmation that the Defendant would pay his legal costs if he did so (without qualification). When contacted by us we pointed to this agreement and reminded the insurers that liability had been admitted and therefore it was not appropriate to submit a claim via the Portal; that this was not a Portal case in any event and requested an extension to limitation and suggested joint instruction of an expert.
The insurers had confirmed that it was not its policy to agree extensions of limitation and nominated solicitors to accept service of proceedings. It is clear therefore that the Defendant expressly refused to extend limitation forcing the claimant to issue proceedings, and that no matter what offer had been made by the Claimant he needed to serve proceedings.
The Claimant’s CPR 36 offer of £5,000 made on 8 July 2020 which was finally accepted by the Defendant on 29 July 2020, followed previous CPR 36 offers which were ignored by the Defendant.
Upon the defendant’s acceptance of the Claimant’s CPR 36 offer, the costs consequences of CPR 36.13 applied, i.e. :-
(3) Except where the recoverable costs are fixed by these Rules, costs under paragraphs (1) and (2) are to be assessed on the standard basis if the amount of costs is not agreed.
Fixed recoverable costs do not apply as CPR 45.29C has no application given that the claim is neither an Employer’s Liability or Public Liability claim nor is it a Package Travel Claim or an RTA claim.
There is no Portal for low value Product Liability Claims. The only such Portal is for low value Employers Liability and Public Liability claims “arising out of a breach of statutory or common law duty of care”: see Protocol 1.1.(18).
A product liability claim does not involve a claim for a breach of duty whether statutory or otherwise. It arises from the supply of a defective product; requires proof that the product was not as safe as persons generally are entitled to expect taking into account its presentation, use and the time it was supplied and the reasonable expectation of persons generally as to its safety. This is nothing to do with a duty of care. Article 6 (1) Directive 85/374.
This European based consumer right is expressly in addition to the rights of compensation for contractual and non-contractual claims based on other grounds such as a duty of care, i.e. negligence, provided in individual European countries.
Should further “proof” on this point be required, we referred the costs judge to the 2019 response by APIL to the Government’s paper to extend fixed recoverable costs, i.e. page 16 :-
Product liability cases
We believe that product liability cases also have features which mean that they are unsuitable to be conducted within the intermediate bands. The majority of product liability cases are complex, regardless of value, mainly due to the amount of investigation required in terms of who the correct defendant is and because liability is always complex. While the number of expert witnesses required may mean that product liability cases will fall out of the track, we recommend that all product liability claims – including group actions, which product liability claims often become- should be listed as a clear exemption outside of the fixed costs regime.
The fact that APIL was arguing that Product Liability cases should not be included in any future extension obviously meant that such claims were not included in the existing / current portal and fixed costs regime.
In these circumstances we submitted that fixed costs did not apply.
In his ruling this summer (2022) the County Court Costs Judge accepted our argument as follows:
This was a product liability claim. As such it was not appropriate to enter the claim on the portal and CPR45.29c does not apply to the claim.