Background
This matter concerned the costs of a claim for vehicle damage, credit hire, storage and recovery. The Claimant did not bring a personal injury claim. Damages were compromised pre-issue on 04/04/2024 when the Claimant accepted the Defendant's Part 36 offer of £18,000.00.
The Claimant sought payment of their costs on the standard basis and informally served a bill of costs including profit costs in the sum of £5,668.20 + VAT. DWF argued that the new fixed costs provisions should instead apply, and the Claimant’s profit costs should be limited to £599.00 + VAT. The Claimant maintained their position and issued Part 8 proceedings, seeking an order for the Defendant to pay the Claimant’s costs on the standard basis.
Although DWF wrote to the Court to dispute this as the costs should be fixed, the Court made an order for costs on the standard basis. DWF promptly made an application to set aside the order and an order for the costs to be fixed. The matter proceeded to a hearing at Manchester County Court on 27/06/2025.
Hearing
The Defendant argued that that the costs are fixed under the post-October 2023 fixed recoverable costs extension. The transitional provisions covering the extension of the fixed costs regime in non-personal injury claims state:
‘(1) Subject to paragraphs (2) and (3) , in so far as any amendment made by these Rules applies to—
(a)allocation;
(b)assignment to a complexity band;
(c) directions in the fast track or the intermediate track; or
(d) costs,
those amendments only apply to a claim where proceedings are issued on or after 1st October 2023.’
The Defendant submitted that the transitional provisions do not specify that they only apply if Part 7 proceedings are issued on or after 01/10/2023. Part 8 proceedings can satisfy this requirement as well. In this case, Part 8 proceedings were issued on 23/08/2024.
The Claimant argued that Part 8 proceedings did not satisfy the requirement of the transitional provisions, and that as Part 7 proceedings were never issued, the costs must be payable on the standard basis, as they would have been prior to the fixed costs extension.
The Court found that the issue of Part 8 proceedings after 01/10/2023 did satisfy the trigger within the transitional provisions for fixed costs to apply, and set aside the order for standard costs. The Court ordered that the matter must proceed under the fixed costs determination procedure as set out in Part X of CPR 45 and ordered the Claimant to pay the Defendant’s application costs in the sum of £5,823.00.
Commentary
Following on from the decision in Bi v Tesco Underwriting [2024] and the recent decision on Sokar Bek v Ali Simsek [2025] this case further strengthens Defendant’s arguments when attempting to limit Claimants to fixed costs in non-personal injury claims which settle pre-issue.
Thank you to Dave McNally for contributing to the production of this article.
