ACCEPTANCE OF PART 36 DOES NOT DISPLACE FIXED COSTS – NOR WERE THERE “EXCEPTIONAL CIRCUMSTANCES”: CLAIMANT COMES TO GRIEF

I am grateful to Simon Fisher, Costs Lawyer,  of DWF for sending me a copy of the judgment of District Judge Carter (as he then was) in the case of Bosley -v- Whitecroft, (County Court at Nottingham, 8th November 2023) a copy of which is available here  Bosley.  The judge found that the acceptance by the claimant of a Part 36 offer of £135,000 prior to allocation, in a case subject to fixed costs, did not lead to the displacement of those fixed costs. Further if  the discretion to disapply fixed costs under CPR 45.29J had been available to the claimant (and the judge held it was not) this would not be an appropriate case to exercise that discretion.

 

“That may well be a harsh decision in light of the value of this litigation but it is in accordance with the principles espoused by Briggs LJ (as he then was) in Sharp v Leeds City Council [2017] EWCA Civ 33 and noted by Coulson LJ in Hislop at  paragraph [51]: it provides certainty, ensures costs are proportionate and is part of the ‘swings and roundabouts’ of fixed costs litigation.”

THE CASE

The claimant brought an action for damages for personal injury. He sent a CNF and then issued proceedings claiming damages of up to £100,000.  The defendant filed a defence and the court issued a notice of proposed allocation to the multitrack.  The parties then prepared for a CCMC.

THE DEFENDANT’S PART 36 OFFER

The defendant made an offer of £135,000. After various agreements to extend time this was accepted, within the relevant period on the 26th July 2022.  On the 28th July 2022 the matter was allocated to the multitrack and listed for a CCMC.  The CCMC did not take place because of the settlement.

THE ISSUES BEFORE THE JUDGE

 

The agreed issues for me to determine are:

a. Whether, when a Part 36 offer is accepted within the ‘relevant period’
under CPR 36.20, the fixed costs which are recoverable by reference
to CPR 45.29C (and Table 6B) are subject to CPR 45.29J (Issue 1);
and
b. Whether on the facts of this case, an order under CPR 45.29J is
appropriate (Issue 2).

ISSUE ONE: DID FIXED COSTS APPLY

The judge considered the rules and previous decisions on the case in detail.

Judgment on Issue 1
18.I accept that McGreevy is not a binding authority. However, in my judgment
Costs Judge Leonard expressed the correct analysis in paragraph [51]. I concur
with his reasoning. The drafting of CPR 36.20 is clear: the only costs that are
recoverable are those in accordance with Table 6. Furthermore, CPR 45.29J is
not the only rule that is excluded, CPR 45.29F and 45.29I are also excluded.
Likewise, from the other viewpoint, in CPR 45.29B, other rules, including CPR
45.29J (and 45.29F and 45.29I (and others)) are expressly included. If those
drafting the rules had intended that CPR 45.29J should be available under CPR
36.20, they would have expressly done so.
19.I cannot see why the court should depart from that clearly expressed words in
CPR 36.20; such a result is not absurd or irrational. It is clear and capable of
being understood by those lawyers engaged in this type of litigation.

20.Indeed, in this case, the claimant’s solicitors must have understood that position
as they sought, by correspondence, the agreement of the defendant to ‘contract
out’ of the fixed costs regime. They therefore must have known if they accepted
the Part 36 Offer prior to the court allocating the matter to the multi-track, fixed
costs would apply.
21.In my judgement Coulson LJ in paragraph [54] of Hislop was referring to the
position in exceptional cases of delay, which is not the case before me.
Furthermore, his Lordship, in paragraph [55], expressed caution about extent of
CPR 45.29J, which indicates that he had not reached a settled view as to its
wider application, outside the confides of his decision in Hislop. Likewise, his
rejection, on the basis of the drafting of the rules, on the interplay with CPR
45.29J and CPR 36.20(2) being redundant. My interpretation, as set out above,
is consistent with Coulson LJ’s observation, as CPR 36.20 is relevant and not
redundant as it identifies the fixed costs that are recoverable in accordance with
the Table. I can therefore derive no further assistance from his Lordship’s
observations.
22.It follows that in my judgment, on the facts of this case, the claimant is unable to
rely on CPR 45.29J and the only costs the claimant can recover are those as set
out in either Table 6B, Table 6C or Table 6D in Section IIIA of Part 45 for the
stage applicable at the date on which notice of acceptance was served on the
defendant.
23. That may well be a harsh decision in light of the value of this litigation but it is in
accordance with the principles espoused by Briggs LJ (as he then was) in Sharp
v Leeds City Council [2017] EWCA Civ 33 and noted by Coulson LJ in Hislop at
paragraph [51]: it provides certainty, ensures costs are proportionate and is part
of the ‘swings and roundabouts’ of fixed costs litigation.
24.In light of my judgment above I do not need to determine Issue 2, but I will do so
given that I heard argument on it.

DID THE FACTS OF THIS CASE GIVE RISE TO EXCEPTIONAL CIRCUMSTANCES?

The judge had found that CPR 45.29J could not be relied upon. However he found that, even it if could be, it was not an appropriate case to exercise his discretion to order that fixed costs did not apply.

 

Judgment on Issue 2
29.It is clearly established now following Hislop and as applied in Ferri, at paragraph
[44], that the test for ‘exceptional circumstances’ is a ‘high bar’. The cases upon
which I should compare this matter to are those cases which have exited the
Protocol process.
30.Considering the factors raised by Mr Birch in his skeleton, none of them alone or
cumulatively lead me to conclude that this case was exceptional. Considering
each in turn:
a. Allocation: the matter had not yet been allocated to the multi-track.
The fact that it was later so allocated in itself cannot be an exceptional
matter in light of the basket of cases that I must compare this matter to,
applying Ferri.

b. Permanent disability: this might be a feature of complexity to this
matter but cases where the claimant suffers a permanent disability
whether defined as such under the Equality Act 2010 or not, cannot be
exceptional.
c. Ogden Tables: whilst the use of Ogden Tables may not be routine,
again, in my assessment it is not exceptional when considering the
‘basket of cases’.

d. Number of expert witnesses: three expert disciplines had been
engaged so far in this matter and further experts were envisaged in the
Directions Questionnaires (DQ). Again, in the context of matters
against which this case has to be compared, the use of multiple
experts and several disciplines does not make this case exceptional.
e. Complexity: references is made to a detail Schedule of Loss of 17
pages as well as the potential for a three day trial as set out in the
DQs. Again, a three day trial in a personal injury matter as well as a
detailed Schedule of Loss, does not set this case apart from its
comparators: it is not exceptional.

f. Value: This matter settled for £135,000. In Hammond v SIG (2019)
(unreported) (SSCO; Master Leonard) it was noted by reference to
another matter, Jackson v Barfoot Farms (an unreported decision from
District Judge Jackson sitting in the County Court at Canterbury) that
Jackson settled for £350,000 and had been “very complicated”, and the
Master stated he agreed with the District Judge’s assessment that such
a case was exceptional. That does not assist me at all in considering
whether this case is exceptional, particularly in light of the disparity in
settlement value to this matter. The value of the settlement alone
cannot in my judgment be an indication of its exceptionality. The value
of this case is simply not exceptional.

31.For those reasons, in my judgment, this matter does not meet the ‘high bar’ test
of exceptionality. Even if CPR 45.29J had been a rule that the claimant could
have relied upon, I would not have found that any further costs beyond those
allowed by CPR 36.20 would have been recoverable.