Applications for pre-action disclosure (PAD) in cases that leave the personal injury portals are still caught by the fixed costs regime, the Court of Appeal has ruled.
Lord Justice Briggs (pictured) also suggested that the Civil Procedure Rule Committee might have to increase the level of fixed costs so as to incentivise defendant to comply with their disclosure obligations.
Sharp v Leeds City Council  EWCA Civ 33, a public liability claim, left the portal but, by the time the claimant’s PAD application came before District Judge Heppell in Wakefield, the council had given the necessary disclosure.
Nonetheless, the district judge awarded her the costs of the application, “no doubt because its issue had been necessary in order to obtain the disclosure which ought to have been given earlier pursuant to the personal injury protocol”, Briggs LJ said.
The district judge treated the costs as if they were governed by part 46.1 and summarily assessed the costs at £1,250.
On appeal, however, HHJ Saffman considered the PAD application to be an interim application within the meaning of part 45.29H, meaning the costs payable were reduced to £305.
Briggs LJ, giving the judgment of the court that also included Lord Justice Jackson, said: “While the difference of a little less than £1,000 may appear modest as the casus belli for successive vigorously contested appeals, the issue gives rise to important practical consequences in terms of the cost/benefit of making PAD applications in small personal injuries claims of this kind, so that it is entirely understandable that this question has been pursued by way of a second appeal in order to obtain an authoritative determination of the point.”
He concluded that the fixed costs regime “plainly applies” in cases like this. Among his reasons were that “the plain object and intent of the fixed costs regime in relation to claims of this kind is that, from the moment of entry into the portal pursuant to the EL/PL protocol (and, for that matter, the RTA protocol as well), recovery of the costs of pursuing or defending that claim at all subsequent stages is intended to be limited to the fixed rates of recoverable costs, subject only to a very small category of clearly stated exceptions”.
He continued: “To recognise implied exceptions in relation to such claim-related activity and expenditure would be destructive of the clear purpose of the fixed-costs regime, which is to pursue the elusive objective of proportionality in the conduct of the small or relatively modest types of claim to which that regime currently applies.”
He recognised the force of the argument put by the claimant’s counsel, Alex Hutton QC, that limiting costs recovery in this way would “largely deprive such applications of their value as a spur to proper compliance by insurance-backed defendants with their protocol disclosure obligations”.
Briggs LJ said: “It is plain that the fixed costs recovery will refund only a small part of the likely outlay to be incurred by those acting for the claimant in making a PAD application…
“There would be nothing to prevent recalcitrant defendants from simply failing in their disclosure obligations, waiting to see if the claimant was prepared to incur the uneconomic expense of a PAD application, and then simply complying with any order made by doing precisely that which, under the protocols, the defendant ought to have done in the first place.”
The answer to this was not to make an exception for PAD applications – which could lead to satellite litigation – but for claimants to seek higher costs under the ‘exceptional circumstances’ rule in part 45.29J.
For the future, Briggs LJ said, the rule committee might need to recognise “that the fixed costs regime needs to be kept under review, and defects in it remedied by adjustment of the fixed allowances where that can be shown to be justified”.
He continued: “It may well be that the frequency with which defendants fail to comply with their protocol disclosure obligations may make it difficult to pass the exceptional circumstances hurdle in part 45.29J, although I would not regard deliberate disregard of those obligations as unexceptional merely because it was frequently encountered.
“It may be that the very limited recovery of expenditure on a PAD application under the fixed costs regime means that such applications are not as effective as a means of sanctioning breach of protocol disclosure obligations as they should be.
“If that is made good by appropriate evidence, then it seems to me that some consideration by way of review to the establishment of a more generous, but still fixed, recovery of costs of such applications would be justified.”
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