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Qader v Esure – Ex-Protocol Claims Attract Fixed Costs Even on the Multi-Track

Introduction

On 15 October 2015, HHJ Grant sitting in the County Court at Birmingham handed down judgment in Qader & Others v Esure Services Limited [2015] EWHC B18 (TCC) on an appeal concerning the scope of the fixed costs regime that applies to cases commenced under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (“the RTA Protocol”). The case has potentially far reaching ramifications and will likely also apply to cases leaving the Employers’ Liability and Public Liability Protocol.

The facts of the case

The accident occurred in October 2013. The three Claimants allege that the Defendant’s driver drove into collision with the rear of their vehicle on a slip road. The Claimants issued their claims with a claim value stated to be “in excess of £5,000 but not in excess of £15,000”. By reason of this valuation the claim was started under the RTA Protocol.

In the Defence it was alleged that the Claimants had deliberately induced the accident by braking suddenly on the slip road which was said to be entirely free from traffic. The claims being pursued by the Claimants were therefore alleged to be fraudulent. In their reply, the Claimants stated that a vehicle in front of them had caused them to brake.

On 30 January 2015, the claim was allocated to the multi-track and a CCMC was listed for 3 June 2015. In the notice of hearing for the CCMC there was a note requiring the parties to file costs budgets, which both parties did.

At first instance

At first instance DJ Salmon held that fixed costs under r.45.29A would apply to the case and refused permission to appeal. His reasons for refusing permission to appeal were that:

(a) The rule is clear on its face that the determining factor is not track but value in respect of the operation of the fixed costs regime.

(b) There is in CPR 45.29J a provision allowing the court to depart from the fixed costs regime whereby the court "if it considers that are exceptional circumstances making it appropriate to do so, the court will consider a claim for an amount of costs ... which is greater than the fixed recoverable costs ..." a fraud case lasting two days may well be such a case.

(c) CPR 3.12 (c) clearly contemplates costs on the multi track being subject to fixed costs.

On appeal

The Claimants argued that DJ Salmon had fallen into error by failing to interpret r.45.29A in a purposive manner and specifically to do so in the light of the Jackson reforms. The rule provides that claims which are started under the RTA Protocol but no longer continue under it shall be subject to Part 45IIIA of the CPR.

HHJ Grant rejected this argument holding that the text of r.45.29A is clear and that there is no need for the court to interpret the rule.  He went on to hold that if he was wrong in his judgment, the interpretation contended for by the Claimant – that Part 45IIIA will apply to such cases unless they were allocated to the multi-track – was to go beyond “the medium of interpretation … such a conclusion can only be reached by what would amount to a re-casting of the rule.”

In reaching this conclusion HHJ Grant noted that paragraph 4 of the RTA Protocol states that it applies to claims for damages for no more than the upper limit of the protocol (£25,000) where the “small claims track would not be the normal track for that claim”, as opposed to claims for damages for which the normal track would be the fast track. He also referred to the fact that r.3.12 states that costs management applies to multi-track cases except (at (c)) “where the proceedings are the subject of fixed costs” and that it was therefore not outside the contemplation of the rules that fixed costs might apply to multi-track cases.

The Claimants also argued that the District Judge had failed to interpret the rule in accordance with the overriding objective and that applying the rule in the way interpreted constituted a contravention of the Claimants’ right to a fair trial. HHJ Grant also rejected both of these submissions.

What does this mean for the future?

Firstly it is important to note that even where part 45IIIA applies it is open to the parties to seek costs exceeding fixed costs pursuant to r.45.29J. In order to do so it will be necessary for the parties to argue that there are exceptional circumstances which would make the award of costs beyond fixed recoverable costs appropriate. Should a party successfully persuade the court of such exceptional circumstances the court can summarily assess the costs (though not any disbursements) or order them to be subject to detailed assessment. As DJ Salmon noted in his refusal to grant permission to appeal it may well be that allegations of fraud take a case into the territory of exceptional circumstances.

Beyond this, the principal expressed in Qader makes it even more important than was previously the case for claimants to assess the value of their claim properly at an early stage. If a claimant values their case below £25,000 such that it begins under the RTA Protocol but at a later stage seeks to increase their valuation of the claim such that it is allocated to the multi-track, they are very likely to be faced with an argument that fixed costs will apply. Whilst in some cases – for instance where the medical evidence necessitating the increase in valuation only became apparent at a late stage – it may be possible to utilise r.45.29J, the requirement of demonstrating exceptional circumstances will inevitably be a high bar to clear.