Kerry Underwood

Archive for May 2016


with 6 comments

In Webb Resolutions Ltd v Countrywide Surveyors Ltd [2016] Ch Div (4 May 2016)


a High Court Deputy Master held that a defendant in a case where the claim was issued but then abandoned before service was entitled to costs of and incidental to the claim.


The dispute was about two matters:-


  • whether a costs liability was triggered by issue, rather than service;


  • if so whether costs should include pre-action costs as well as costs after the issue of the claim.


The court held that the issue of the Claim Form fundamentally changes the position concerning a liability for the other side’s costs as Section 51 of the Senior Courts Act 1981 and CPR 44 applied, whereas they did not apply if proceedings had not been issued.


There may be a dispute on assessment of costs as to exactly how much the defendant’s expenditure could be said to be “costs of and incidental to” the claim but in the court’s view all of the expenses that followed as the direct consequence of the Pre-Action Letter of Claim would be incidental to the claim eventually issued.


The court held that it would be wrong to ignore the considerable expense the defendant had had to incur in dealing with the claim, and to disregard the way in which the claimant had throughout been aware of how disproportionate the costs were to the size of the claim.


The claimant had mentioned this in correspondence. He also held that, just because the claimant would not have incurred a liability for costs had no claim had been issued, it did not follow that where a claim had been issued, the court should not make an order for costs.


Costs are always in the discretion of the court once proceedings have been issued and each case will depend upon its facts.


However this case does seem to be at odds with the decision in


Citation Plc v Ellis Whittam Ltd [2012] EWHC 764 (QB)


where a High Court Judge sitting in the Queen’s Bench Division ordered the claimant to pay the defendant’s costs only from the date of service of the claim form, saying:-


“As to the costs up to the service of the claim form, I make no order. If the Claimant had not commenced the proceedings (and I have held that it ought not to have commenced the proceedings) then the Defendant could not have sought an order for its costs for that period to be paid by the Claimant. The fact that the Claimant did commence proceedings in this case ought not to lead to the result that it becomes liable to pay to the Defendant costs which it would not have been liable to pay if it had not commenced proceeding.”


Many think that the Citation case was wrongly decided but these cases demonstrate that, surprisingly, there is a lack of clear case law on what costs a defendant can expect to recover when proceedings are issued but then almost immediately terminated.


Simon Gibbs, in his always excellent Legal Costs Blog, makes the point that a claimant would always expect to have pre-issue costs paid, whether proceedings had been issued or not, but a defendant is not in the same position where the claim is successfully defended pre-issue.

Written by kerryunderwood

May 20, 2016 at 10:54 am

Posted in Uncategorized


with 8 comments

In Massar v DAS Nederlandse Rechtsbijstand Verzekeringsmaatschappij NV (Case C-460/14) and Buyuktipi v Achmea Schadeverzekeringen NV and Stichting Achmea Rechtsbijstand (Case C-5/15) (7 April 2016)


the European Court of Justice on questions referred by the courts of the Netherlands provided guidance on the proper construction of “inquiry” in Article 4(1) of Council Directive 87/344/EEC on the co-ordination of laws, regulations and administrative provisions relating to legal expenses insurance.

The 11th recital of the directive states that:-

“…the interest of persons having legal expenses cover means that the insured person must be able to choose a lawyer or other person appropriately qualified according to national law in any inquiry or proceedings and whenever a conflict of interests arises”.

Article 2(1) reads:-

“This Directive shall apply to legal expenses insurance. Such consists in undertaking, against the payment of a premium, to bear the costs of legal proceedings and to provide other services directly linked to insurance cover, in particular with a view to:

–              securing compensation for the loss, damage or injury suffered by the insured person, by settlement out of court or through civil or criminal proceedings,

–              defending or representing the insured person in civil, criminal, administrative or other proceedings or in respect of any claim made against him.”

Article 4(1) provides:-

“1.          Any contract of legal expenses insurance shall expressly recognize that:

  • where recourse is had to a lawyer or other person appropriately qualified according to national law in order to defend, represent or serve the interests of the insured person in any inquiry or proceedings, that insured person shall be free to choose such lawyer or other person;
  • the insured person shall be free to choose a lawyer or, if he so prefers and to the extent that national law so permits, any other appropriately qualified person, to serve his interests whenever a conflict of interests arises.”

In the first case, the insured asked his insurer (DAS) to cover his lawyer’s costs relating to a procedure in which his employer sought authorization from a public body to make him redundant. DAS refused, arguing that the procedure was not an “inquiry” or “proceedings”.

The ECJ concluded that “inquiry” includes a procedure at the end of which a public body authorizes an employer to dismiss an employee.

“Inquiry” must be read in opposition to “proceedings”.

Attempting to limit the scope of “inquiry” to legal proceedings before a court would deprive the term of its meaning.

When interpreting EU law, it is necessary to consider its context and objectives. The general scope and “obligatory nature” of the insured’s right to choose his lawyer militate against a restrictive interpretation.

The ECJ also said that the Directive did not distinguish between the preparatory stage and the decision-making stage of the inquiry and the definition of “inquiry” covers both stages.

The ECJ referred to its previous decision in Sneller (C) – 442/12,EU:C:2013:717 and confirmed its decision there, that is that the exercise by the insured person of the right to choose his or her representative does not rule out the insurer restricting the costs to be paid to that representative.

Adopting the same reasoning, in the second judgment, the ECJ held that “inquiry” covered the “objection stage” before a body responsible for authorizing medical care requests, which allows unsuccessful applicants to seek a review.

It was “indisputable that the insured person has need of legal protection during a procedure that constitutes the indispensable preliminary stage for the bringing of an action before the administrative court”.

Although the decisions relate to the procedure in the Netherlands, nevertheless it is clear that the European Court of Justice has ruled that it is obligatory for a client to have the right to choose a lawyer and that the ECJ will protect the interest of the insured.

Given the facts of these cases it is now impossible for Before-the-Event insurers to argue successfully that in the United Kingdom the right to choose a lawyer only arises once proceedings are issued.

In portal cases very clearly the right arises as soon as a Claim Notification Form is lodged on the portal and that right covers all work done in “the preparatory stage” and that must include attending the client and taking instructions.

Thus in portal cases at least any person living in England and Wales with BTE insurance has an absolute and unqualified right to choose a solicitor under that BTE policy.

No ifs, no buts.


Please see my related blog:


Written by kerryunderwood

May 17, 2016 at 9:56 am

Posted in Uncategorized


with 2 comments

In Phillips v Willis [2016] EWCA Civ 401


the Court of Appeal said that the starting point should be that any matter that has started in the portal should stay within it and not be transferred to the Small Claims Track, or any other track, unless absolutely necessary and the decision here to transfer the matter to the Small Claims Track was wrong in law and irrational.


“Once a case is within the RTA protocol, it does not automatically exit when the personal injury claim is settled. On the contrary, the RTA process is carefully designed to whittle down the disputes between the parties as the case passes through the various stages. It is to be expected that the sum in issue between the parties will be much smaller when the case reaches Stage 3 than it was back in Stage 1. The mere fact that the personal injury claim has been resolved is not specified as being a reason to exit from the RTA process.”


Here the claimant was injured in a road traffic accident and liability was admitted and general damages for personal injury, together with other losses, were agreed and the only issue remaining in dispute related to car hire charges.


The matter proceeded to Stage 3 of the portal by virtue of the claimant issuing a claim under Part 8 of the Civil Procedure Rules.


However when the parties attended the hearing the District Judge transferred the matter to the Small Claims Track and made directions and this was on the basis that the only issue remaining was car hire charges and that the matter should proceed under Part 7.


The claimant appealed to the Circuit Judge who upheld the decision of the District Judge.


However the Court of Appeal overturned the District Judge’s decision. The Court of Appeal was critical of the District Judge saying that he had caused the parties to incur substantial extra costs as a result of the order which he made of his own motion in circumstances where both parties were happy to have the matter dealt with within Stage 3 of the portal.
The Court of Appeal said:-


“29. The costs which the district judge caused the parties to incur were totally disproportionate to the sum at stake. First, the parties would have to pay a further court fee of £335.00 as a result of the district judge’s order. Secondly, the parties would incur the costs of complying with the district judge’s elaborate directions.”


The Court of Appeal then set out those extensive directions and pointed out that the remaining sum in dispute was just £462.00.


The Court of Appeal went on to say:-


“30. I dread to think what doing all that would have cost, but that was not the end of the matter. Both parties would need to instruct representatives to attend the further hearing. They would also have to write off the costs of the 9 April hearing [the Stage 3 Portal Hearing]. At the end of all that, the winning party would recover virtually no costs, because the case was now proceeding on the small claims track.


  1. In my view, the district judge’s decision taken on 9 April 2014 that further evidence was necessary to resolve the outstanding dispute between the parties was irrational. The district judge was not entitled to reach that conclusion.”


The Court of Appeal recognized that the issue in the appeal is how courts should deal with low value road traffic accident claims where the personal injury element has been resolved and only a modest dispute about car hire charges remains.


Although this case involved the pre-31 July 2013 portal, the principle applies to the current portals.


The Court of Appeal gives a helpful summary of the Stage 1 and Stage 2 portal procedure and says that if the matter is not settled by the end of Stage 2, the “case then proceeds to Stage 3, which is litigation.”


The Court of Appeal then went on to say:-


“9. At this point, Practice Direction 8B takes centre stage. PD 8B requires the claimant to issue proceedings in the County Court under CPR Part 8. The practice direction substantially modifies the Part 8 procedure so as to make it suitable for low value RTA claims where only quantum is in dispute. This modified procedure is designed to minimise the expenditure of further costs and in the process to deliver fairly rough justice. This is justified because the sums in issue are usually small, and it is not appropriate to hold a full blown trial. The evidence which the parties can rely upon at Stage 3 is limited to that which is contained in the court proceedings pack. A court assesses the items of damages which remain in dispute, either on paper or at a single “Stage 3 hearing”.”


The Court of Appeal stated that the provision which was of key importance to the present case is paragraph 7 of Practice Direction 8B, relating to the Stage 3 process, which reads:-


“7.1. The parties may not rely upon evidence unless —


(1) it has been served in accordance with paragraph 6.4;


(2) it has been filed in accordance with paragraph 8.2 and 11.3; or


(3) (where the court considers that it cannot properly determine the claim without it), the court orders otherwise and gives directions.


7.2. Where the court considers that —


(1) further evidence must be provided by any party; and


(2) the claim is not suitable to continue under the Stage 3 procedure,


the court will order that the claim will continue under Part 7, allocate the claim to a track and give directions.


7.3. Where paragraph 7.2 applies the court will not allow stage 3 fixed costs.”


The Court of Appeal dismissed as irrelevant the fact that the personal injury element of the claim had been settled and that that personal injury element was the gateway to the portal.


The court held that the District Judge had no power under paragraph 7.2 of Practice Direction 8B to direct that the case should proceed under Part 7, rather than Part 8.


As to when that paragraph could ever apply the Court of Appeal suggested that there might be cases involving complex issue of law or fact which are not suitable for resolution at a Stage 3 hearing.


The Court of Appeal also considered CPR 8.1(3) which provides:-


“The court may at any stage order the claim to continue as if the claimant had not used the Part 8 procedure and, if it does so, the court may give any directions it considers appropriate.”


The Court of Appeal accepted that the language of that rule is wider than that in paragraph 7.2 of the Practice Direction but said that “CPR 8.1(3) cannot be used to subvert the protocol process”.


The Court of Appeal said that in any event the District Judge here was relying upon paragraph 7.2 of the Practice Direction, and not CPR 8.1(3) but if they were wrong in that view then it would have been an impermissible exercise of the power under CPR 8.1(3) to transfer this particular case out of Part 8 and into Part 7 of the CPR.


I am grateful to Steven Turner, Counsel for the Respondent, for background information in relation to this matter.


Further guidance, interim payments and admissions


In Mulholland v Hughes and Conjoined Appeals, No. AP20/15, Newcastle-upon-Tyne County Court, 18 September 2015


the court held that a defendant cannot raise an issue at a stage 3 hearing that had not been set out in the Response Pack at stage 2.


The court also held that it can order a claimant to repay money if, at the stage 3 hearing, it is found that the damages due are less than the sums already paid.


Here the judge was hearing four appeals in relation to the interpretation of the Pre-Action Protocol for Low Value Injury Claims in Road Traffic Accidents.


In three of the cases the defendant had not raised at stage 2 a point in relation to the need for a hire vehicle, but raised the point at the stage 3 hearing.


The judge rejected an argument that offers made by a defendant at stage 2 should be regarded as admissions but said that it was not open to a defendant to raise something at a stage 3 hearing that had not been raised at stage 2.


The court said that the Settlement Pack and Response are not pleadings but they do require the parties to set out their case and it is incumbent on a defendant to set out clearly the precise nature of the defence, that is what is agreed and what is disputed and why it is disputed.


The court referred to paragraph 7.41 of the Protocol:-


“The defendant must also explain in the counter-offer why a particular head of damage has been reduced. The explanation will assist the claimant when negotiating a settlement and will allow both parties to focus on those areas of the claim that remain in dispute.”


“It follows that it is the intention of the Protocol that if a defendant wishes to raise an issue such as the need for hire, that is to be done at the time of the making of the counter-offer. To allow a defendant to raise the issue of need at Stage 3 runs entirely contrary to the notion that at the end of Stage 2 the parties should have clarity as to what remains in dispute.”


The court also held that requiring the claimant to prove need for car hire in every case was inconsistent with paragraph 7.11 which provides that in most cases witness statements will not be required and this indicates that witness statements will only be needed where hire, or for example the need for care, is formally raised by the defendant at stage 2.


“Irrespective of the above, I regard it as inequitable and unfair for a defendant, for the first time, to raise the issue of need at the Stage 3 hearing. It seems to me that it is tantamount to trial ‘by ambush’. It hardly needs to be said that to litigate in that way runs entirely contrary to the spirit of the Protocol, the expected behaviour of the parties and the intended collaborative approach.”


“Finally, in relation to this ground of appeal, even if it were permissible for a defendant to raise the question of need at a Part 8 hearing, given the absence of any forewarning, in my judgment, the proper course would have been to adjourn to enable the claimant to file evidence to demonstrate need: this is permitted by paragraph 7.1(3) and paragraph 7.2 of the practice direction. As I have made clear, however, in my opinion, the defendant should be estopped from raising need at this very late stage.”


Repayment of sums paid


The court held that there was nothing to prevent the court from ordering repayment of monies already paid under the protocol.


In the fourth appeal, what was in issue was the amount of general damages for pain, suffering and loss of amenity and the judge had awarded a sum less than that offered by the defendant at stage 2 and ordered repayment of the difference and that decision was upheld in this appeal.


“It cannot be just or equitable that a claimant is entitled to retain a sum in excess of that which is awarded by the court at the end of a hearing. That would be, in my view, manifestly unfair to the defendant. I do not think that such was the intention of the Protocol. If the claimant chooses to go to a Stage 3 hearing, he must accept the risk that a court will award less than the non-settlement payment and that he will have to refund the difference.”


“In the final analysis, a Protocol offer is, in essence, what is now generally referred to as a ‘Part 36 offer’. It is, after all, governed by CPR Part 36. Its purpose is the same, principally to obtain protection in costs. There is a difference in that under the usual provisions of Part 36, no money is in fact paid to the claimant but it seems to me that the same principles should apply.”


“Arguably, the closest analogy is a ‘Payment into Court’ pursuant to RSC Ord. 22 and CCR Ord. 11 which were largely superseded by Part 36. (Although there is still provision for payments into Court by virtue of CPR Part 37.) Under the old regime, if a Claimant (Plaintiff) did not recover more than the sum paid into Court, the Defendant was entitled to have the balance returned to him.”


“Accordingly, my view is that the non-settlement payment should be treated as an interim payment and, therefore, governed by CPR Part 25.”


“The claimant should send the Stage 2 Settlement Pack to the defendant within 15 days of the claimant approving —


(1)          the final medical report and agreeing to rely on the prognosis in that  report; or


(2)          any non-medical expert report,


whichever is later.” (My italics)


I realise that that is in the context of a second or subsequent report from the same expert, for the reasons set out in paragraph 7.8, but the use of the word “final” in paragraph 7.33 strongly suggests that one cannot submit further medical evidence once the Stage 2 Settlement Pack has been sent to the defendant.


I am reinforced in that by paragraph 7.66 which provides:-


“Comments in the Court Proceedings Pack (Part A) Form must not raise anything that has not been raised in the Stage 2 Settlement Pack Form.”


One can see the logic of having a cut-off point. It could happen that the medical evidence was obtained after the case had been to court, or had been settled by acceptance of a Part 36 offer or whatever. In those circumstances one would not have been able to reopen the case.


What about a new report dealing with fresh symptoms or unexpected medical developments?
If the new report is relevant and admissible then it should be paid for by the defendant if the case is won. If it is not admissible then obviously the defendant does not have to pay for it.


I am presuming that any additional injury does not take the claim above the portal limit of £25,000.00. If it does there is no problem as that is a reason for exiting the portal.


However that still leaves open the question of whether any evidence not produced by the end of Stage 2 is ever admissible in subsequent Part 7 proceedings. To allow that would effectively allow a claimant to bypass the decision in Phillips v Willis by exiting the portal, issuing Part 7 proceedings and getting the new evidence in that way.


Paragraph 7.76 appears to give the claimant an unfettered right to exit the portal. The problem is that “where the court considers that the claimant acted unreasonably in giving such notice it will award no more than the fixed costs in rule 45.18.”


In Phillips v Willis the Court of Appeal said this at paragraph 11:-


“It is important to note that the RTA process has an inexorable character. If a case falls within the parameters of the RTA process, the parties must take the designated steps or accept the consequences. The rules specify what those consequences are. The rules also specify when a case must remain in the RTA process, when it must drop out of the process, and when it may drop out of the process.”


Exiting the portal to try and get such fresh evidence in is likely to result in the court finding that the claimant has acted unreasonably. In those circumstances the court is likely to order the claimant to pay all of the defendant’s costs for dealing with the matter out of the portal, even though the claimant wins the case.


In Uppal v Daudia LTLPI 9 July 2012


the Defendant successfully argued that the claimant had unreasonably removed the case from the portal.


This resulted in the successful claimant failing to recover over £20,000.00 in costs claimed and being ordered to pay the defendant’s costs on the indemnity basis.


Thus the defendant was awarded indemnity costs for having to defend unnecessarily Part 7 proceedings and the claimant was denied its claimed costs of over £20,000.00.


Practice Direction 8B, paragraph 7.1(3) allows the court to find that it cannot properly determine the claim without further evidence and in those circumstances, under paragraph 7.2, the court may find that the claim is not suitable to continue under the Stage 3 procedure and may order that the claim will continue under Part 7 and allocate the claim to a track and give directions.


However the comments of the Court of Appeal in Phillips v Willis should be noted and in that case they found that the District Judge had no power under paragraph 7.2 of Practice Direction 8B to direct that the case should proceed under Part 7.


At paragraph 36 of the judgment the Court of Appeal looked at the circumstances in which paragraph 7.2 might ever apply and referred to cases possibly involving complex issues of law or fact which are not suitable for resolution at a Stage 3 hearing.


CPR 8.1(3) provides:-


“(3) The court may at any stage order the claim to continue as if the claimant had not used the Part 8 procedure and, if it does so, the court may give any directions it considers appropriate.”


The Court of Appeal accepted that the language of that rule is wider than that in paragraph 7.2 and said that “CPR 8.1(3) cannot be used to subvert the protocol process.”


The cost of an admissible report is recoverable. There is no prohibition in obtaining a second medical report and one would not need to show that it was a disbursement reasonably incurred due to a particular feature of the dispute under CPR 45.29I (2) (h).


Even in a soft tissue injury claim paragraph 7.8B makes provision for a further medical report in certain circumstances.


Paragraph 7.2 of the portal states:-


“It is expected that most claimants will obtain a medical report from one expert, but additional medical reports may be obtained from other experts where the injuries require reports from more than one medical discipline.”
The limitation in paragraph 7.8 is in relation to a subsequent medical report from an expert who has already reported and does not deal with obtaining a medical report from a second or subsequent expert.


Paragraph 7.12 under the heading “Stay of Process” provides:-


“7.12.    Where the claimant needs to obtain a subsequent expert medical report or a non-medical report, the parties should agree to stay the process in this Protocol for a suitable period.  The claimant may then request an interim payment in accordance with paragraphs 7.13 to 7.16.”


Although that does not specify the stage of the proceedings reached where there can be a stay for this reason it does refer to interim payment and that is of course a pre-stage 2 issue and paragraph 7.12 appears amongst other pre-stage 2 matters.


If further medical evidence could be provided after the Stage 2 Settlement Pack has been sent, one would expect that to appear in paragraphs 7.32 onwards dealing with the Stage 2 Settlement Pack and subsequent events.




Written by kerryunderwood

May 16, 2016 at 1:04 pm

Posted in Uncategorized


with 2 comments

This blog has been updated to 21 June 2016.


In Mendes v Hochtief (UK) Construction Ltd [2016] EWHC 976 (QB)


the Queen’s Bench Division of the High Court held that the advocacy/brief fee in the Road Traffic Accident Fixed Costs Scheme is recoverable if the matter settles on the day of trial, and that “there are sound policy reasons for concluding that the interests of justice would be better served if the advocate was not penalized financially for negotiating a settlement at the door of the court.”


Here the parties attended at court for a fast track trial under the Road Traffic Accident Fixed Costs Scheme which provides for a fixed advocacy fee depending upon the amount awarded by the court.


On the morning of the trial the parties asked the judge for more time and settled the matter on the basis of £20,000.00 plus costs.


The judge assessed costs but refused to award the fixed advocacy fee as the case had been settled before the “final contested hearing” had started.


Under CPR 45.29(C) Table B a reference to “trial” is a reference to the final contested hearing.


The claimant appealed to the High Court.
The single issue was whether a trial advocacy fee is recoverable under the fixed costs scheme if a case settles on the day of trial but before the trial actually commences.


The High Court held that it was. Table B applies if a fixed costs matter is settled “on or after the date of listing but prior [to] the date of trial.”


A matter that settles on the date of trial obviously does not settle “prior” to the date of trial and thus is not covered by Table B.


Thus either the situation fell in Table C or was not covered at all. Table C refers to a “trial advocacy fee”.


The court held that the Civil Procedure Rules in relation to fixed costs “were intended to be a comprehensive guide to what was recoverable and when.”


The court cited with approval the decision of the High Court in


Nizami v Butt [2006] 1 WLR 3307 that the intention of a fixed recoverable costs regime:-


“…was to provide an agreed scheme of recovery which was certain and easily calculated. This was done by providing fixed levels of remuneration which might over-reward in some cases and under-reward in others, but which were regarded as fair when taken as a whole.”


If necessary, although the court doubted that it was, a purposive construction would be given to achieve that result.


The court also noted the difference in wording as compared with that relating to success fees which uses the term “concludes at trial”, the point being that the recoverable success fee jumps to 100% in those circumstances.


In three cases the courts had held that a trial had not started if settlement is reached beforehand, however close to the trial. Those cases are:-


Amin & Hussain v Mullings & Royal Sun Alliance [2011] 3 Costs LR 485


Sitapuria v Moorzadi Khan (Unreported), 10 December 2007, Liverpool County Court; and


James v Ireland [2015] 3 Costs LR 511


Those cases were on a different wording and reinforced the view of the High Court here, that is that a different conclusion on the different wording is not only possible but essential.




A correct and sensible decision. It should be noted that it is confined to settlements on the day of trial, as anything settled before will come within Table B as settled “prior to the date of trial”.


How many advocacy fees?


The Civil Procedure Rules in relation to the calculation of the fixed advocacy fee where the advocate is representing more than one claimant are silent in relation to the fixed costs scheme which follows on from the Road Traffic Accident Portal and the Employers’ Liability and Public Liability Portal.


There are, and have been for some time, fixed advocacy costs in all fast-track matters, although this is not widely known.


In relation to all fast-track trials except those flowing on from the portals the relevant rule is CPR 45.40 which provides:-


“(1)        Where the same advocate is acting for more than one party –


  • the court may make only one award in respect of fast track trial costs payable to that advocate; and


  • the parties for whom the advocate is acting are jointly entitled to any fast track trial costs awarded by the court.


(2)          Where –


  • the same advocate is acting for more than one claimant; and


  • each claimant has a separate claim against the defendant,


the value of the claim, for the purpose of quantifying the award in respect of fast track trial costs is to be ascertained in accordance with paragraph (3).


(3)          The value of the claim in the circumstances mentioned in paragraph (2) or (5) is –


  • where the only claim of each claimant is for the payment of money –


  • if the award of fast track trial costs is in favour of the claimants, the total amount of the judgment made in favour of all the claimants jointly represented; or


  • if the award is in favour of the defendant, the total amount claimed by the claimants,


and in either case, quantified in accordance with rule 45.38(3);”


Although the rule does not specifically say so it is clear that where there is more than one advocate each advocate gets the separate fixed advocacy  fee.


Thus it will be seen that under that scheme one adds up the total of the awards and that gives the figure upon which the advocacy fee is based.


Thus suppose that an advocate appears for four clients, each of whom recovers £4,000.00. That gives a total of £16,000.00 which is within the upper band and thus attracts an advocacy fee in ex-portal cases of £1,705.00.


If one of those claimants is a London claimant attracting a 12.5% uplift, is that applied to the whole sum or is only a quarter, that is 3.125%, applied to reflect the fact that only a quarter of the claimants is London based?


It becomes more complicated if the claimants recover different sums. Suppose the total awarded is £20,000.00, of which the London claimant gets £8,000.00 and the other three get £4,000.00 each. That total attracts an advocacy fee of £1,705.00.


Given that the London claimant has received 40% of the total damages is the enhancement then 5% of the total to reflect the fact that 5% is 40% of the enhancement of 12.5%?


At present this involves relatively small sums. That will change as Fixed Recoverable Costs spread to all areas of work and to all claims up to £250,000.00.


One would have thought that the courts would apply CPR 45.40 to ex-portal fixed costs cases where CPR 45.29(C) is silent.


However in Neary & Neary v Bedspace Resource Ltd, Chester County Court, Unreported, 4 December 2015, case number B07YJ633


a Circuit Judge allowed two sets of advocacy fees where one advocate was representing the two claimants.


There the judge also considered the issue of whether the solicitors got one or two sets of fees for all the work prior to advocacy and concluded that they got a set for each claimant.


That has generally been regarded as the rule and thus the real issue was whether there was one or two advocacy fees.


The judge had this to say:-


“2.          There is no dispute that the Claimants are entitled to their costs pursuant to the regime for fixed costs set out in section IIIA of CPR Part 45. These were claims started under the Pre-action Protocol for Low Value Personal Claims in Road Traffic Accidents, but which came out of the protocol, with Part 7 proceedings leading to the case being disposed of at trial. Accordingly, pursuant to CPR 45.29B, the Claimants are entitled to the fixed costs set out under paragraph C in Table 6B to CPR 45.29B (that is to say the total of £2,655 and 20% of the damages awarded and the relevant trial advocacy fee) and disbursements in accordance with CPR 45.291.


  1. The main issue that arises is whether, on account of their [sic] being two Claimants, each Claimant is entitled to recover the fees set out in Table 6B to CPR 45.29B (as the Claimants contend) or whether the claim is to be taken as a whole, allowing only the global award of costs (as the Defendant contends). The difference that this makes to the amount of costs is that, if the Claimants’ argument is correct, they are entitled to the fixed sum of £2,655 and the trial advocacy fee twice over, whereas if the Defendant is correct, they are entitled to the fixed sum and the advocacy fee only once jointly. The 20% uplift and the disbursements would amount to the same figure on either analysis, since the 20% would apply either to each individual award of damages or to the total award of damages; and the disbursements are in any event apportioned to each case.


  1. There is nothing in Part 45 which definitively guides the Court as to which of these two interpretations is right. The term “claim” is used interchangeably in the CPR to mean an individual cause of action (see for example CPR 7.3) or a case which may comprise one or more individual causes of action (see for example CPR 19.1), so in principle either interpretation could be said to be consistent with the rules.


  1. Both parties submitted before me that the other gained something of a windfall if their interpretation was correct. Unfortunately this is the nature of fixed costs regime – the amount of costs is inevitably a broad estimate of what is reasonable rather than a reflection of the actual time involved in preparing or presenting a case.


  1. It is not self-evident to me that the potential windfall to the Claimants’ lawyers through recovering the fixed fee and the advocacy fee twice over is any less than the windfall to the Defendant from only paying the fees once. The work involved in representing two Claimants will almost certainly be more than that involved in representing one. It is likely the additional work involved would be more than would be compensated by the recovery of 20% of the damages on two Claimants rather than one (especially as that fee is not intended to cover advocacy), but it is unlikely that the additional work, whether by way of preparation or advocacy, would be twice as burdensome as the work for one client alone. Hence either interpretation of the rules presents a potential windfall to one party.


  1. In my judgement, the correct answer to this issue can be discerned from the wording of Table 6B to CPR 45.29C. It states that it deals with the fixed costs that are recoverable “where a claim no longer continues under the RTA protocol.” Under the protocol there is no possibility of including the claim of more than one injured person in on claim. The protocol provides for a claim notification form which can only relate to a single person, and throughout the protocol the assumption is that only a single Claimant is involved. Table 6B cannot in my judgement properly be interpreted to mean the costs of the claim in any more broad sense than that contemplated by the protocol, that is to say the cause of action of an individual.


  1. Accordingly in my judgement, the Claimants are each entitled to recover the fixed fee and the advocacy fee.”


However it does appear that CPR 45.40 was not spotted by either advocate, and nor by the judge, and therefore this cannot be regarded as a definitive ruling.


However Cardiff County Court has adopted the same view as Chester County Court and I am grateful to Robert Vernon of 9 Park Place Chambers in Cardiff for drawing my attention to that.


Sunderland County Court has also adopted this line.


Newport County Court have also accepted the correctness of this approach.


The case in Newport County Court had an interesting twist in the tale in that the judge accepted that in principle both claimants were entitled to the full fixed costs, and also the full separate advocacy fee but was clearly unhappy about awarding that level of fixed costs – in excess of £3,000.00 – to a claimant who had recovered £200.00.


Consequently what the judge did was to reallocate the case to the small claims track after giving judgment and award fixed costs of £80.00!


Of course there is an argument that as the Civil Procedure Rules specifically have that rule in relation to non-ex-portal matters then the very fact that there is no such rule in relation to ex-portal matters allows the court to reach a conclusion on the basis that had the Civil Procedure Rules intended the advocate to be restricted to one advocacy fee in an ex-portal case then it would have been very simple to apply the existing CPR 45.40, but they had not done so.


However I suspect that that is due to the well-known incompetence of the Rules Committee rather than any deliberate policy decision.


CPR 45.40 itself, specifically dealing with advocacy fees, reinforces the point that the preparation fee is definitely per claimant.


It could hardly be otherwise – claims settle at different stages and thus one may be resolved pre-issue, another post-issue and pre-allocation etc.


Clarification by a court which has considered CPR 45.40 in detail would be welcome.


Please also see my other blogs:-  Fixed Costs where Listed for Trial at Allocation, Disposal Hearings: Which Fixed Costs are Payable?,  Advocacy Fees in Fixed Costs Cases & Fixed Costs, All the Portals and Fixed Recoverable Costs.


Written by kerryunderwood

May 12, 2016 at 2:13 pm

Posted in Uncategorized

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