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Christopher McClure examines the recent decision of Mr Justice Stewart in Ferri v Gill [2019] EWHC 952 (QB) which starkly illustrates the importance of correctly quantifying damages in personal injury claims.
The EL/PL and new RTA Protocols apply to claims for damages in respect of personal injury which do not exceed £25,000. Once a claim begins life in a Protocol, a claimant is either –
In any event, the decision to submit a claim via a Protocol is a decision which is likely to have significant costs consequences and is therefore not one to be taken lightly.
Here we are concerned with the third of these points: escaping the fixed recoverable costs regime.
There are essentially three avenues open to a claimant by which he may exonerate himself from fixed recoverable costs –
CPR 45.29J provides that –
(1) If it considers that there are exceptional circumstances making it appropriate to do so, the court will consider a claim for an amount of costs (excluding disbursements) which is greater than the fixed recoverable costs referred to in rules 45.29B to 45.29H.
(2) If the court considers such a claim to be appropriate, it may—
(a) summarily assess the costs; or
(b) make an order for the costs to be subject to detailed assessment.
(3) If the court does not consider the claim to be appropriate, it will make an order—
(a) if the claim is made by the claimant, for the fixed recoverable costs; or
(b) if the claim is made by the defendant, for a sum which has regard to, but which does not exceed the fixed recoverable costs,
and any permitted disbursements only.
The key term for our present purpose is ‘exceptional circumstances’.
The current (but now largely defunct) CPR r. 45, Section II fixed costs regime used the term ‘exceptional circumstances’ at r. 45.13(1) but the absence of any binding authority on what that actually meant means that there is virtually nothing of use to transpose when seeking to interpret the test for the purposes of r. 45.29J.
With far more now at stake under the Section IIIA regime than there ever was under the Section II regime, claims for costs exceeding fixed recoverable costs are now starting to reach the higher courts.
One such case was recently decided by the High Court and, whilst decided on its own facts, the decision still makes for useful reading insofar as how the courts interpret ‘exceptional circumstances’ for the purposes of CPR r. 45.29J.
The claim was brought on behalf of a cyclist who was injured when struck by a car door opened by the defendant. The claimant, who was a self-employed builder and decorator, suffered injuries to his arm, abdomen, back, next and left shoulder.
Solicitors for the claimant submitted a Claim Notification Form under the RTA Protocol and liability was conceded by the defendant without any allegation of contributory negligence.
The claimant’s medical report opined that the claimant would make a full recovery from all symptoms within a maximum period of four months and the defendant made an offer to settle in the sum of £1,500.
The claimant then transferred instructions to new solicitors who, in turn, wrote to the defendant stating that they did not consider the case to be a fast track Portal claim and the claim exited the Protocol accordingly. A report from an orthopaedic surgeon was obtained and the claimant eventually underwent corrective surgery.
To quote from the judgment –
‘In short, the claimant suffered a significant shoulder injury with two years symptoms, resolved only after a substantial operation. There was also a loss of earnings claim which required some putting together, as the claimant is self-employed, lost some time totally off work and otherwise had to work reduced hours.’
The claim settled pre-issue for £42,000 and, having begun life in the RTA Protocol, prima facie attracted CPR r. 45, Section IIIA fixed recoverable costs, which totalled £,5771.25 plus VAT.
Unsatisfied, the claimant issued costs-only Part 8 proceedings with a view to seeking costs in excess of fixed recoverable costs by reference to CPR 45.29J.
The matter came before Master McCloud in the first instance who found in the claimant’s favour. In so doing, she held that the test of exceptionality was ‘a low bar, not a high bar, and I am setting this as a low bar of simply outside the general run of cases.’ Crucially, the Master also held that in order to define exceptional ‘one must look at this in the context of the sort of cases that are in the Portal.’
The defendant appealed essentially on the basis of two questions –
Turning to the first question, Stewart J held that the Master had clearly – and incorrectly – applied a ‘low bar’ to exceptionality and that she had construed her test of ‘outside the general run of cases through that prism.’
The Court of Appeal in Hislop v Perde [2018] EWCA Civ 1726 (unavailable to Master McCloud at the time) had stated that ‘it goes without saying that that a test requiring “exceptional circumstances” is already a high one’.
It was further held that Master McCloud had used the wrong basket of cases against which to gauge the test of exceptionality: ‘the basket must comprise only those cases covered by the Section IIIA fixed costs regime; therefore cases which have exited the Protocol (a) [form] part of the basket against which exceptionality must be construed; and (b) do not qualify as engaging exceptionality merely because they are of that type.’
In summary, exceptionality should not be a low bar and it must only be measured against the types of cases that are covered by Section IIIA.
Regrettably, the usefulness of this decision ends there. Being an appeal on a preliminary point the matter was remitted to the SCCO for assessment which is where the Master with conduct will apply the test as interpreted in Gill.
But what Gill does demonstrate is the importance of ensuring that otherwise suitable claims which carry a value in excess of £25,000 are not submitted via the relevant Protocol. Whilst such cases are likely to exit the Protocol for value, that exit leads to a second fixed costs regime which, bar very few exceptions, places the heavy burden of ‘exceptional circumstances’ upon the claimant if hourly rate costs are to be awarded.
Careful investments will often produce a good return and solicitors would do well to bear this principle in mind when valuing personal injury claims at the outset. Certain claims may require an initial investment to obtain, for example, medical evidence at a very early stage with a view to accurately assessing the value of the claim and thus avoid the risk of being limited to fixed costs in a case which would otherwise have attracted costs at hourly rates.
Gill ought not to have been submitted via the RTA Protocol; having settled at £42,000 it fell well outside the Protocol’s limit. But this fact did little to persuade the Court that, despite the claim being clearly unsuitable for the Protocol, it should not be subject to the consequences of having been placed on the Protocol.
Ultimately, solicitors must understand that whilst value is fundamental in determining whether to use the relevant Protocol, it is clearly not a determinative factor when applying the test of ‘exceptional circumstances’ for the purposes of CPR r. 45.29J.
Please contact Christopher McClure to discuss any query relating to this article. Christopher is based at our Manchester office and can be contacted on 0161 835 4087.
LLB (Hons), PG Dip (BVC)
Tuesday 21st May 2019