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Fixed costs - are you paying too much?

28 July 2020
Two recent cases have confirmed that the courts are likely to apply the fixed recoverable costs’ regime pretty strictly.

In Aldred v Cham (2019) the Court of Appeal considered whether the cost of counsel’s advice relating to the proposed settlement of an RTA claim, was a claim for a disbursement which should be allowed in addition to the fixed recoverable costs provided for under CPR 45.29C and Table 6B. The claimant’s argument was that it should be allowed because it was “reasonably incurred due to a particular feature of the dispute”.  The court decided that the fact that the claimant was a child was not a particular feature of the RTA dispute between the parties.  The fee for counsel’s advice could not, therefore, be recoverable under CPR 45.29I(2)(h).  The appellate court went on to say that such an approach was consistent with the overall purpose of the fixed costs regime which was to ensure that, "save for express exceptions, the amount recoverable was limited to the sums set out in the tables by way of fixed recoverable costs."

This decision has now been echoed in Coleman v Townsend in which, on 13 July 2020, a Costs’ Master disallowed the claimant’s counsel’s fees, notwithstanding that the case settled only on the afternoon before the day of the trial, when the claimant accepted the defendant’s Part 36 offer. The rationale for this decision was that the claim settled before it had moved from CPR Part 45 Section IIIA, Part B of Table 6B (proceedings are issued under Part 7, but the case settles before trial) to Part C of Table 6B (the claim is disposed of at trial). The fact that the court had ordered the filing of skeleton arguments and that understandably the claimant’s solicitor had delivered the brief to counsel were irrelevant. Put simply, when the claim settled, it had still to cross the boundary between Part B and Part C.

These decisions are clearly of benefit to defendants but they work both ways and highlight the importance of defendants attempting settlement at the earliest reasonable opportunity in any case to which a fixed costs regime applies. It must be borne in mind that there are three stages within the fixed costs matrices: Part A, where the case exits a Portal but there are no proceedings; and Parts B and C, referred to above. If a claim settles at the very end of one of these phases (particularly as was the case in Coleman) the claimant will recover no more than what is allowed under the relevant part of the table. Correspondingly, however, as soon as the claim moves from one part to the next, the claimant will recover all of the fees allowed, even if it is the case that little of the relevant work can have been carried out. In Coleman, this was referred to as the fixed costs regime involving swings and roundabouts.

The simple message to defendants is therefore to make a meaningful Part 36 offer as early as possible, so that the time for acceptance expires before the claim moves from one part of the applicable fixed costs tables to another, with an eye particularly on the move from Part B to Part C, under which counsel’s brief fee for the trial will be recoverable

For further information please contact Nicola Critchley.

Further Reading