The claimant, aged seven at the time of the road traffic accident, sustained personal injury. A claim was submitted following the RTA Pre-Action Protocol but the claim exited the portal due to a liability dispute.
Settlement was later agreed in the sum of £2,000 and the claimant obtained an advice from counsel on the merits of the proposed settlement as required under PD21 para 5.2. Counsel advised acceptance of the offer. The claimant commenced Part 8 Proceedings to obtain court approval. In addition to approving the settlement the court made an order for the defendant to pay the claimant's costs to be assessed if not agreed.
The costs dispute
The claimant, represented by True Personal Injury Solicitors, served a Bill of Costs containing counsel's fee of £150 for the advice on settlement. The defendant objected to counsel's fee saying that it was outside the fixed costs regime provided by CPR 45 Section IIIA. The matter proceeded to a provisional assessment hearing where the District Judge allowed counsel's fee. Unhappy with that result the defendant sought an oral review of the decision, but the judge maintained his view that counsel's fee was payable in addition to the fixed recoverable costs. This was because the relevant rules required an advice to be obtained for the purposes of a settlement involving a child and the judge found, looking at CPR r.45.29I(2)(h), that "the fact the claimant is a child is a particular feature of the dispute which entitles and indeed requires the court to look to the exception to decide whether or not it is recoverable."
The defendant appealed arguing in effect that such fees are implicitly provided for within the fixed recoverable costs allowed under section IIIA Table 6B. The Circuit Judge upheld the District Judge's decision that the counsel's fee was recoverable as it constituted a particular feature of the dispute. The defendant appealed to the Court of Appeal.
Court of Appeal findings
The issues on appeal were:
Issue 1: Was counsel's advice "due to a particular feature of the dispute"?
Issue 2: If the advice was due to a particular feature of the dispute, was the cost thereof a disbursement reasonably incurred which the court should allow, in addition to the fixed recoverable costs?
Coulson LJ, giving the lead judgment found that counsel's advice in the present case was not a particular feature of the dispute, but rather "caused by a characteristic of the claimant himself and does not fall within the exception" so is not recoverable from the defendant.
In the event the court was wrong on this issue they went on to address the second issue and found that counsel's work must be deemed to be within the fixed costs provided for in Table 6B and is not to be allowed as an additional disbursement
What does this mean for insurers?
In claims within the scope of Section IIIA of CPR r. 45 counsel's fees for advising on settlement will not be recoverable. Any other fees of counsel, such as preparing Particulars of Claim, should also not be recoverable. It is important to bear in mind though that counsel's fees may be justified in complex cases (see paragraph 36 of the judgment) and there is also provision in CPRr.45.29I(2)(c) for the cost of an advice provided for within the relevant Protocol. Paragraph 7.10 of the PAP expressly provides for specialist legal advice.
It is also worth noting that the recoverability of counsel's fees for advising on settlement is an issue which only arises in relation to Section IIIA as counsel's fees are expressly provided for under Section III CPR r.45.23B
In the absence of any authority specifically addressing counsel's fees in relation to the question of "particular feature of the dispute", the Court of Appeal referred to two authorities concerning the fees of translators. Coulson LJ endorsed the findings of HHJ Wood QC in Olesiej v Maple Industries (Liverpool County court) 4 January 2012 where translation fees were disallowed. Coulson LJ went on to say:
"The fact that, in a particular case, a claimant is a child, or someone who cannot speak English, or who requires an intermediary, is nothing whatever to do with the dispute itself. Age, linguistic ability and mental wellbeing are all characteristics of the claimant regardless of the dispute. They are not generated by or linked in any way to the dispute itself and cannot therefore be said to be a particular feature of that dispute."
All too often, large translation fees are presented from firms connected to a claimant's solicitor. Although the Court of Appeal did not specifically deal with the recoverability of translation fees, it can now be argued that translation fees should not be recoverable under all the provisions in CPR r.45 which allow for additional disbursements arising "due to a particular feature of the dispute."
This is a welcome decision to combat the issue of layering of disbursements that has been used to maximise solicitors' profit via disbursements.
When considering claims for disbursements insurers should take a step back and ask themselves if the disbursement was incurred due to a particular feature of the dispute, such as how the accident happened, the nature, scope and extent of the injuries and their consequences, or if it was incurred due to a characteristic of the claimant (age, linguistic ability and mental wellbeing).
If it is has been incurred due to a characteristic of the claimant, then the disbursement should not be recoverable in claims within the scope of Section IIIA of CPR r.45.