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Claimant limited to pre-allocation fixed costs despite a final hearing being listed

04 November 2019

Uddin v Mahmood
Newcastle County Court


The claimant commenced his claim following an RTA via the MOJ Portal, bringing claims for personal injury, physiotherapy treatment and financial losses, including a claim for credit hire of £11,110.80.

After the defendant admitted liability the claimant submitted the Stage 2 settlement pack. In the response to the Stage 2 Settlement Pack the defendant made offers for general damages and physiotherapy. No offer was made in respect of the credit hire.

The claim did not settle within the 35 day consideration period provided for in the pre-action protocol so the claimant submitted the Court Proceedings Pack. The defendant withdrew his previous offers, entitling the claimant to start Part 7 proceedings.

A defence was filed admitting liability but disputing quantum. The claimant made a Part 36 offer, the general damages element of which was accepted, leaving only the special damages in dispute. The defendant then made a partial admission in respect of the hire charges, admitting a lower rate and number of days. With liability admitted, the personal injury element of the claim agreed, and a partial admission in relation to the hire charges, the remaining losses in dispute amounted to less than £10,000 (i.e. were within the small claims track limit).

Despite this, the claim was allocated the claim to the fast track by the court of its own motion. The defendant applied for the case to be reallocated to the small claims track, but in the meantime it appears that the court itself had already decided to reallocate the claim to the small claims track. The claimant did not object. A small claims hearing was listed, but the claim settled shortly before that hearing. 

The costs position

The parties could not agree costs for the period post allocation so the claimant issued an application for a determination that he was entitled to fixed costs pursuant to CPR r.45.29 A - L for the period after the claim fell out of the protocol.

The claimant sought the stage of costs for the post-listing/pre-trial phase and, as in many similar cases, relied on Singh v Ajaz (Bristol County Court, 27th September 2016). Further the claimant relied on Qader v Esure Services Ltd (2016) CA (see DWF update) in that this was an ex-protocol claim, and since it had not been allocated to the multi-track, fixed costs must apply.

The defendant contended that the claimant was limited to pre-allocation portal costs as there are specific costs rules that apply to any case allocated to the SCT with no exception for ex-protocol claims. 

The claimant succeeded at first instance and the defendant appealed, maintaining the above argument and further distinguishing Singh, as the judge in that case did not appear to have been taken to CPR r.27.14(2)(h) and he made no reference to it in his judgment.

Before the point could be argued the claimant consented to the appeal being allowed in the terms contended for by the defendant, with the claimant being limited to pre-allocation costs and no costs post allocation.

What this means for insurers

Claims for credit hire which commence life in the Portal are a minefield – for what was meant to be a simplified system! Whilst the aim of keeping the case in the portal for a compensator is to minimise claims spend, the desired outcome may not always be achieved as often a "rough justice" approach is applied at Stage 3.

This case shows that there can be merit in allowing a claim such as this to drop out of the portal: the effective use of the CPR and the protocol enables compensators to ensure that claims can be dealt with in a cost effective way, with heads of claim being concluded at the appropriate point and areas of dispute minimised. It also provides an opportunity to require the claimant to produce information and attend for cross examination. This ensures that the issues to be determined by the court are limited, and in accordance with the Overriding Objective are proportionate, with reduced expense and taking up the appropriate court resource.

In summary, a portal dropout may actually result in a lower overall claims spend. But compensators need to take a holistic approach and know what they are trying to achieve, and because of Phillips v Willis (2016) CA (see DWF update) that is a decision which needs to be taken at Stage 2.

The appeal conclusively demonstrates a) the error in Singh, as the judge was not taken to CPR r.27.14(2)(h) that would limit the claimant's costs and b) Qader is not applicable because there are specific rules in place dealing with small claims track costs.

Where an ex-protocol claim is allocated to the small claims track, compensators should offer pre-allocation fixed recoverable and argue for no order entitlement to costs post allocation. 

Although not strictly capable of being cited as an authority, the fact that the court allowed the appeal (see PD 52A paragraph 6.4) can arguably be used to show that Singh was overturned on appeal.

Contact details

The substantive action was conducted by Gavin Perry, Partner, who can be contacted on 0151 907 3493 or gavin.perry@dwf.law

The costs proceedings and appeal were conducted by Simon Fisher, Senior Manager/Costs Lawyer who can be contacted on 0151 907 3133 or simon.fisher@dwf.law

The defendant's acting counsel in the appeal was Roger Mallalieu of 4 New Square Chambers, London.