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The Court of Appeal recently considered the application of fixed costs to multi track cases in the recent (and controversial) case of Qader v Esure  EWCA Civ 1109.
The cases were low-value RTA claims which commenced in the portal. However in each case, as a result of an allegation that the accident had been fraudulently procured, the matter was allocated to the multitrack. It had been determined in the courts below that costs budgets were not required because the matters were subject to the fixed costs set out in CPR 45 Section IIIA, notwithstanding allocation to the multi-track.
The conclusion in the courts below was based on a fairly straightforward reading of CPR 45.29A, which states that:
(1) […T]his section applies where a claim is started under—
(a) the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents ('the RTA Protocol'); or
(b) the Pre-Action Protocol for Low Value Personal Injury (Employers' Liability and Public Liability) Claims ('the EL/PL Protocol'), but no longer continues under the relevant Protocol or the Stage 3 Procedure in Practice Direction 8B.
The only requirement for the application of fixed costs is therefore that a matter start under the Protocol and exit it; no reference is made to track (or for that matter value).
The Claimants would potentially have recourse to the escape provisions of CPR 45.29J; but this procedure applies only at the conclusion of the claim. They would therefore face the uncertain prospect of defending a complex multitrack claim and only recovering the relatively low fixed costs.
The Court of Appeal determined that, notwithstanding the text of CPR 45.29A, fixed costs do not apply on the multitrack. They did so by expressly reading CPR 45.29B as though it read (emphasising the words added by the Court of Appeal):
Subject to rules 45.29F, 45.29G, 45.29H and 45.29J, and for so long as the claim is not allocated to the multi-track, if, in a claim started under the RTA Protocol, the Claim Notification Form is submitted on or after 31st July 2013, the only costs allowed are—
It reached this conclusion despite finding that CPR 45.29A was unambiguous; that there was no conflict with any other provision in the rules; and that there was no inherent irrationality in applying the rule to multitrack cases. The conclusion was reached entirely on an analysis of the history of the creation of the fixed costs regime.
Whilst the case is limited to consideration of cases commencing under the RTA protocol, the conclusion will apply equally to the EL/PL protocol.
The result is controversial because of the manner in which the conclusion was reached. To read a phrase into secondary legislation which is not ambiguous, internally inconsistent or irrational seems to be pushing the boundaries of what can properly be considered judicial interpretation towards judicial legislation. Kerry Underwood describes the constitutional implications excellently here.
However, even setting aside the charge of judicial legislation, the case still leaves matters somewhat open ended. Consider the position where a matter is allocated to the multitrack and later reallocated to the fast track (perhaps because the fraud allegation is abandoned). Does the phrase “and for so long as the claim is not allocated to the multi-track” mean that fixed costs begin to apply again on reallocation? And if so, do costs incurred whilst the matter was on the multi-track get assessed on the standard basis or included within those fixed costs?
Consider the position where the Claimant revalues the claim at more than £25,000 so that the claim is allocated to the multi-track. The sum awarded is then considerably less than £25,000. Does the court have any power to limit the Claimant to fixed costs, and if so on what basis?
If a case was suitable for the multi-track but settles prior to allocation, will this always lead to an escape of fixed costs under CPR 45.29J? If not, why should cases be treated differently pre and post-allocation?
Will allocation decisions now be keenly contested, leading to increased costs expenditure on procedural matters?
This case might well lead to further satellite litigation and a raft of unfortunate consequences.
To find out more, contact email@example.com. Lee is based in our Ilkley (Leeds) office and can be contacted on 01943 601350.