Kerry Underwood


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

2 Responses

Subscribe to comments with RSS.

  1. Hi, can you please advise on the following. Can we repudiate hire/vehicle damage if it has not been included within the portal?


    November 2, 2017 at 1:36 pm

    • Nejla

      According to my records you have not attended any of the 91 courses that I have done since 2013 that deal with this topic, and nor have you purchased a copy of my book Personal Injury Small Claims, Portals and Fixed Costs and this is available from Amazon here or me here for £80.00 including P&P and runs to 1,300 pages in three volumes.

      If you have in fact been on one of my courses, the please let me know the date and location and I will deal with your query.

      Alternatively, once you confirm that you have ordered a copy of my book I will deal with your query.



      November 9, 2017 at 9:36 am

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: