FIXED COSTS AND CLAIMANT’S PART 36 OFFERS

This case must be read with the Court of decision in Broadhurst -v- Tan [2016] EWCA Civ 94.  This effectively overrides this decision. Fixed costs do not apply when indemnity costs are ordered. 

There is a report, helpfully put online by Sara Robson barrister, of the judgment of His Honour Judge McKenna in Dixon -v- Bennett (Birmingham County Court 23rd December 2015).

 

KEY POINTS

  • The fixed costs recoverable under the Portal continue to apply even when costs are ordered on an indemnity basis.

PRACTICE POINTS

  • A claimant’s Part 36 offer has very limited effect in relation to costs.
  • The offer will, however,  still impact upon interest and the additional 10% in damages.

THE CASE

The claimant brought an action which was subject to the Pre-action Protocol for Law Value Personal Injury claims.  The claimant made a Part 36 offer of of £5,421.28 and was awarded damages in the higher sum of £5,821.84.

THE DISTRICT JUDGE’S DECISION ON COSTS

The District Judge held that the fact that the offer was beaten and indemnity costs had to be paid did not entitle the claimant to non fixed Part 7 costs.

THE DECISION OF THE CIRCUIT JUDGE ON APPEAL

The Circuit Judge upheld the finding of the District Judge. Only fixed costs were recoverable.
“15. The difficulty with the Claimant/Appellant’s submissions is that the wording of CPR 45.29A is clear. It states in terms that Section IIIA of Part 45 will apply where a claim is commenced under the Portal but no longer continues under the Portal. There is no ambiguity or lack of clarity in the meaning of the words used. The fixed costs regime is plainly engaged and in those circumstances there is, as it seems to me no need for the court to interpret the rule, purposively or otherwise. The court’s task is merely to apply the plain meaning of the words which is exactly what the learned District Judge did. The Claimant/Appellant’s submission based on the wording of CPR 36.29(4) (b) equally falls away. If I am wrong about that, then, as it seems to me, the interpretation contended for by the Claimant/Appellant goes beyond what is permissible interpretation into impermissible amendment.
16. Where a party is entitled to costs, such costs pursuant to 44.3 (1) can only be assessed on one of two bases, either standard or indemnity which affects whether or not proportionality applies and which party has the benefit of any doubt. There is no express limitation to the effect that the fixed costs regime only applies where costs were awarded on the standard basis still less any suggestion that the fixed costs regime should or could be departed from where indemnity costs were awarded. By way of example, an award of costs on the indemnity basis at the conclusion of a fast track trial would not entitle the successful party to seek trial fees higher than the fixed costs provided for in the Rules. Had that been the intention, I would have expected clear guidance to that effect. Furthermore, to my mind, the general rule is to be found in 36.17 and it must give way to the specific rule in 45.29B. The indemnity basis applies from the date when the effective offer expired by virtue of CPR 45 and quantification is by reference to the fixed costs regime.
Conclusion
17. In my judgment, the learned District Judge was correct to conclude that the Claimant/Appellant’s entitlement to costs was limited to the fixed costs set out in Table 6B of CPR 45.29C and that the entitlement to assessment of her costs on the indemnity basis after expiry of the relevant Part 36 offer did not entitle her to non fixed costs”

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2 comments

  1. Jack Waller · · Reply

    Worth noting that 36.17(3) places no such limit on the defendant’s right to costs where the claimant fails to beat an offer.

  2. Daniel Higgins · · Reply

    CPR 45.29F effectively caps the Defendant’s costs at what the equivalent Claimant fixed costs would have been. I have only had a brief read through the Judgment but it doesn’t appear to have been argued at any point that the award of indemnity costs would of itself constitute an exceptional circumstance to depart from the Fixed Costs Regime pursuant to CPR 45.29J. Given the lack of definition of what constitutes an exceptional circumstance it would certainly be open to the court, in my view, to go down that route to justify an award of costs in excess of fixed costs.

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