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Qader v Esure [2016] EWCA Civ 1109: Limiting the scope of fixed recoverable costs

Our very own Jasmine Murphy, as Junior Counsel to Robert Weir QC, drafted submissions on behalf of PIBA intervening in this important case, resulting in a Court of Appeal finding that fixed recoverable costs do not apply to the multi track. Briggs LJ noted that the Court was considerably assisted by PIBA’s concise and well-focussed submissions and expressed appreciation to both intervening associations (PIBA and APIL).

The Facts

The case is a conjoined appeal in respect of two claims, Qader v Esure Services Limited and Khan v McGee both of which had begun life in the RTA Protocol for Low Value Personal Injury Claims (‘the Portal’). In the usual way these claims had exited the Portal following denials of liability, however due to allegations of fraud in each case the claims were allocated to the multi track and questions then arose as to what costs the parties were entitled to.

The First Instance Decisions

In Qader both the District Judge and Circuit Judge on appeal held that fixed recoverable costs applied, regardless of any allocation to the multi track, pursuant to CPR 45.29A and notwithstanding an acknowledgement by the District Judge that the Rule Committee might not have intended that consequence. In Khan it was held that it would not be appropriate to apply fixed costs to the case, and that the Court was able to apply the CPR 45.29J discretion at the CCMC stage and direct that the case should proceed on ordinary multi track assessed costs thereafter. Both decisions were appealed.

The Court of Appeal Decision

In a unanimous judgment that fixed recoverable costs do not apply to the multi track. Briggs LJ, giving the lead judgment, made the following key findings:

  • The language of CPR 45.29 did not expressly limit fixed recoverable costs to the fast track or expressly exclude the multi track, to the contrary it appeared to unambiguously apply the fixed recoverable costs regime to all claims which started within the Portal but later exited the same.
  • No ordinary process of construction or interpretation of the wording of the relevant rules could lead to the result that the fixed costs regime ought to be dis-applied for multi track cases.It would not be irrational to find that the fixed costs regime did apply to multi-track cases, though Claimants and their solicitors faced the unattractive prospect of pursuing their claims and resisting serious allegations of dishonesty upon the basis of a fixed costs regime which was plainly designed to be suitable only for fast track cases.
  • The rules here must be seen as containing a drafting error by reference to the history of the fixed recoverable costs regime, and in particular the fact that there had been a consultation process preceding its implementation (within which a MOJ response had included the statement that it had "always been the Government’s intention that these proposals apply only to cases in the fast track”): it had not been demonstrated that there had been an intention to include those cases later allocated to the multi track in the fixed recoverable costs regime and so there had been an apparent failure by the Rule Committee to implement the continuing intention of the Government.
  • The Court was able to correct obvious drafting errors within the rules, per Inco Europe Limited v First Choice Distribution [2000] 1 WLR 586. This was the case even where that required the addition of words, as opposed to giving the words actually used a different meaning.
  •  It should normally be possible to understand the rules just by reading them in their context but that this was a rare case where something had gone wrong and where the Court’s interpretative powers must be used, as far as possible, to bring the language into accord with what it is confident was the underlying intention.
  • The drafting error would therefore be rectified by the insertion of words in to CPR 45.29B, as shown below:

    Application of fixed costs and disbursements – RTA Protocol 45.29B
    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—
    (a) the fixed costs in rule 45.29C;
    (b) disbursements in accordance with rule 45.29I.

The Consequences of the Decision 

There can undoubtedly be anticipation of more hotly contested allocation arguments, especially where cases are on the margin of multi track allocation. We might expect to see Claimant solicitors seeking to add value and / or complexity to matters so as to tip the balance and Defendants may be more wary of alleging fraud / more likely to fall back on adverse inferences arguments, lest they end of up on the multi track and so outside of the fixed recoverable costs regime.

Briggs LJ acknowledged the risk of parties seeking to take advantage of allocation from a costs perspective but found that this could be addressed by Judges at the case management stage, who may penalise those who sought to “abuse the opportunity to which the allocation stage in such a claim gives rise.”

There are still plenty of avenues for argument about the applicability and operation of the fixed recoverable costs regime and tensions remain within the rules. In particular the anomaly of the £25,000 ceiling in Part A to Table 6B at CPR 45.29C remains, something which the Court of Appeal acknowledged here but did not determine, inviting the Rules Committee to consider the issue instead.