Broadhurst & Anor v Tan and Anor [2016] EWCA Civ 94 - in the Court of Appeal from Sheffield Combined Court and Newcastle County Court.
The Appeal arose as a result of two conflicting judgments in the respective lower Courts, both cases involving low level RTA claims under Section IIIA of Part 45 CPR, where Part 36 Claimants were ultimately successful.
Both Judges had arrived at differing conclusions upon costs recoverable, and although in their respective cases before them that Rule 36.14(3) applied, HH Judge Robinson stated that there “was no difference between the profit costs assessed on the indemnity basis, and fixed costs as prescribed in Table 6 of Rule 45.29C”, whilst HH Judge Freedman made no such equation.
Thus the Appeal centred around which Rule took precedence with regard to the amount of costs recoverable. The conceptual difference between fixed costs and assessed costs had been acknowledged in Solomon v Cromwell Group [2012] WLR 1048 at para. 19, and was confirmed in the Judgment delivered by The Master of The Rolls in this Appeal. In the above case, it was also stated at para. 21 that Rule 45.29B contains the general rule, but 36.14A contains the specific rule applicable in such cases as this particular Appeal.
The 2013 Amendment Rules had introduced, as well as section IIIA, changes to Part 36 with the introduction of Part 36.14A. There were other modifications, but 36.14(3) had been left intact. This clearly states that at 36.14 para. 1(b) “where a judgment against a Defendant is at least as advantageous to the Claimant as the proposals contained in a Claimants Part 36 offer”, then at 36.14 para. 3(b), “the Claimant is entitled to costs on the indemnity basis from the date on which the relevant period expired”.
In his dissertation, The Master of The Rolls had already agreed the conceptual difference, and he expanded upon this stating that “Fixed costs are awarded whether or not they were incurred, and whether or not they represent reasonable or proportionate recompense for the effort expended. Assessed costs reflect the work actually done – the court examines whether the costs were incurred, and then asks whether they were incurred reasonably and proportionately”.
Thus Part 36.14(3) prevailed. The Appeal for Broadhurst was allowed, and for Smith dismissed.
Comment
Relief for claimants and legal representatives all round, but will it do anything to encourage pre-trial settlements, which is one of the objectives sought? The impending proposals regarding the extension of the Fixed Costs application may be viewed by the legal fraternity (and claimants possibly) with some trepidation, since if fixed costs are extended to cover higher value work, many currently lucrative cases may fall within the fixed costs limitations. One can imagine the cries of “Woe is Me”, in some areas of legal practice - perhaps this case will provide some succour.