RTA TRIAL FEE RECOVERABLE IF CASE SETTLES AT TRIAL

In Mendes -v- Hocthtief (UK) Construction Ltd [2016] EWHC 976 (QB) Mr Justice Coulson decided a point of some importance: is the RTA Protocol brief fee recoverable if a matter settles at trial.

“… there are sound policy reasons for concluding that the interests of justice would be better served if the advocate was not penalised financially for negotiating a settlement at the door of the court”.

KEY POINTS

  • The advocacy fee for a fast track trial conducted under the RTA Protocol is still recoverable when the case settled on the morning of the trial.

THE CASE

Both parties attended on the morning of a fast track trial which was subject to the RTA fixed costs regime.  On the morning of the trial the Recorder was asked for more time and the parties resolved the case on the basis of £20,000 damages plus costs.  The Recorder assessed costs but refused to award the fixed trial advocacy fee on the basis that the case had settled before the final contested hearing had commenced.

The claimant appealed.

2. THE RELEVANT RULES
  1. Rule 45.29A identifies the circumstances in which the Part IIIA rules apply. There is no doubt that they apply in this case because it is a claim which began under the RTA Protocol but which did not then continue under that Protocol because liability was denied. The proceedings which followed were issued under Part 7.
  2. Rule 45.29C provides as follows:
“(1) Subject to paragraph (2), the amount of fixed costs is set out in Table 6B.
(2) Where the claimant—

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

(b) instructs a legal representative who practises in that area, the fixed costs will include, in addition to the costs set out in Table 6B, an amount equal to 12.5% of the costs allowable under paragraph (1) and set out in Table 6B.

(3) Where appropriate, VAT may be recovered in addition to the amount of fixed recoverable costs and any reference in this Section to fixed costs is a reference to those costs net of VAT.
(4) In Table 6B—

(a) in Part B, ‘on or after’ means the period beginning on the date on which the court respectively—

(i) issues the claim;

(ii) allocates the claim under Part 26; or

(iii) lists the claim for trial; and

(b) unless stated otherwise, a reference to ‘damages’ means agreed damages; and

(c) a reference to ‘trial’ is a reference to the final contested hearing.”

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THE JUDGMENT ON THIS ISSUE

  1. I start with section B of Table 6B. The first point to make is that the final column heading in section B contains an obvious typographical error. I am in no doubt that the relevant heading ought to read “on or after the date of listing but prior to the date of trial”. Each of the other two column headings in section B uses the expression “prior to the date of…” That is plainly what the third and final column was also intended to say. No other suggestion for a single missing word was made.
  2. Although Mr Lewis was not prepared to concede that point, this appeared to be because he wanted to re-write the headings of each of the three columns in section B to chime with the (very different) descriptions in Sir Rupert Jackson’s Final Report on Costs. There the phrases ‘post-issue, pre-allocation’, ‘post-allocation, pre-listing’, and ‘post-listing, pre-trial’ were used. The suggestion that, although the subsequent rules used different headings altogether, this was somehow an error and the court should revert to the phrases in Sir Rupert’s Report, seemed to me to be wholly illegitimate.
  3. In my view, Mr Bacon QC was right to say that a consideration of the fixed costs in this case could not have arisen under section B. This case did not settle prior to the date of trial. Even allowing for the definition of “trial” as a reference to “the final contested hearing” the point remains the same: this settlement did not occur prior to the date of the final contested hearing. That was always 11 December 2015. The case did not settle prior to 11 December. On that basis, as a matter of interpretation, the three stages in section B of Table 6B must each be taken to have been completed by the time the recorder came to deal with costs. That necessarily points the way to the costs being dealt with under the next section, section C.
  4. In their written submissions, the defendant’s solicitors take the point that the date on which the trial is listed to be heard may not be the date of the final contested hearing: the trial may, for example, be adjourned. But that potential complication does not arise on my interpretation, because the date of the final contested hearing is not the date the trial was listed to be heard, but the date the final contested hearing took place, or would have taken place, but for the settlement on that date. If a trial is adjourned or relisted, it will be the adjourned or relisted date that matters for these purposes. In any event, there is no dispute on the facts here that, but for the last-minute settlement, the date of the final contested hearing in this case was 11 December 2015.
  5. Whilst the court should always be cautious about supplying alternative wording in support of its own construction, it seems to me that, if the intention had been to use the last column in section B of Table 6B to cover all costs up to the commencement of the final contested hearing itself, and not just the date of that hearing, then that could easily have been stated, and in those simple terms. As we shall see, the old (superseded) rules about success fees say exactly that. But these rules do not say that. Thus the essence of the submissions from the defendants, both oral and written, to the effect that what matters is when the trial actually commenced, is based on a distinction which is not stated in the applicable rules.
  6. If I am right, and the costs do not fall to be assessed under section B, then there are two alternatives when a case settles on the date of trial but before the trial itself has commenced. One is that there is a lacuna in the CPR and the question of which, if any, elements of the fixed costs are recoverable if the case settles on the date of trial, but before the trial has commenced, has not been dealt with in the CPR at all. The other is that the costs fall to be assessed under section C.
  7. In my view, there is not a lacuna in the rules. As Mr Bacon QC said, if neither sections B nor C applied, nothing at all would be recoverable by way of fixed costs if the case settled on the date of trial but before the commencement of the contested hearing. That is plainly not what the rules intended. In my view, the rules were intended to be a comprehensive guide to what was recoverable and when. A purposive construction is required in order to achieve that intention.
  8. In any event, I consider that section C applies on the facts of this case. It was the date of the trial. Counsel twice asked the learned recorder for more time which he granted and in consequence the settlement occurred. I do not believe that it strains the language of the rule to conclude that this was a case where the claim was ‘disposed of at trial’, albeit by way of settlement rather than judgment.
  9. Similarly, I reject the defendant’s argument that this element of the fee is for trial ‘advocacy’ which did not occur, so cannot be recoverable. That seeks to make an artificial distinction between preparation of advocacy and attendance at trial, on the one hand, and actual performance of advocacy, on the other. And what if the trial goes ahead and the judge does not call on counsel or the solicitor advocate for the claimant because the other side’s case is so poor? He or she would not perform any advocacy in such circumstances so, if the defendant is right, he or she would not be entitled to be paid. That would be an absurd result.
  10. Policy arguments were put forward by both sides in support of their respective positions. Mr Bacon QC submitted that it would be counter-productive as a matter of policy if the rules were interpreted to mean that the advocate would lose out if the case settled on the day of the trial. He said this would have the effect of reducing the number of settlements. Mr Lewis, for his part, argued that his position – that a trial advocacy fee was not payable unless the trial itself commenced – had the virtue of certainty. His instructing solicitors went further and suggested that the claimant’s argument would lead to counsel ‘skimming off’ the trial advocacy fee when it was not properly recoverable.
  11. As to policy matters generally, I agree with Simon J (as he then was) in Nizami v Butt [2006] 1 WLR 3307 that the intention of a fixed recoverable cost regime:
“…was to provide an agreed scheme of recovery which was certain and easily calculated. This was done by providing fixed levels of remuneration which might over-reward in some cases and under-reward in others, but which were regarded as fair when taken as a whole.”
Having said that, I agree with Mr Bacon QC that there are sound policy reasons for concluding that the interests of justice would be better served if the advocate was not penalised financially for negotiating a settlement at the door of the court. Nor do I think that my interpretation leads to uncertainty; indeed, in my view, confusion is much more likely to arise on the alternative construction, with arguments – which might have arisen here – about precisely when the trial could be said to have commenced. Those sorts of arguments have caused considerable uncertainty under the rules I address in Section 6 below. They do not seem to me to represent any sort of advertisement for certainty.
  1. I reject absolutely the suggestion of ‘skimming off’. The fact that the trial advocacy fee is recoverable by the barrister or solicitor advocate for their preparation for, and attendance at trial, which would not otherwise be recoverable, hardly amounts to some sort of windfall.
  2. Accordingly, for these reasons, and untrammelled by authority, I conclude that the learned recorder was wrong in the conclusion he reached. In my view, the trial advocacy fee was recoverable in this case.

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