Kerry Underwood

FIXED COSTS, COSTS OF BUDGETING AND CASE SETTLING

with 2 comments


I am currently on my Personal Injury Reforms lecture tour, to check available dates and book a place on a course please click here.

 

A case enters the portal and then exits and is likely to be allocated to the multi-track due to complexity and the number of experts and consequently budgets are drawn.

 

However the matters settles before allocation and therefore has not actually been allocated to the multi-track, and therefore the provisions of Qadar v Esure [2016] EWCA Civ 1109, now enshrined in rule 8.1 of the Civil Procedure (Amendment) Rules 2017, do not apply.

 

That case and that rule states that fixed costs apply to any ex-portal claim unless and until it is allocated to the multi-track.

 

On the face of it there is no entitlement to any additional costs for preparing the budget.

 

Obviously one of the benefits of a fixed costs case is that the parties do not need to prepare a budget, but in these circumstances the parties will be in the position of incurring the costs of preparing a budget, but recovering only fixed costs.

 

The successful party may argue that the escape clause should apply, but it may well be that the additional costs incurred would not lead to the claimant achieving more than 20% of the fixed costs figure, which is what needs to be done to get anything extra at all and to avoid being punished in costs.

 

It is of course extremely sensible in a complex matter to draw up a budget early on in the case as part of planning the case generally as well as being prepared for the first CMC before which the costs budgets will have to be served. It is all the more frustrating for the solicitor who carefully plans their case in advance to lose out on costs of preparing the budget.

 

The answer is an amendment to the Civil Procedure Rules to provide for the payment of a fixed fee for Costs Budgeting work in such a scenario, that is where the court would require budgets to be drawn and filed in an ex-portal claim which ends up not being allocated.

 

I am grateful to Mr Idris Dawjee of Parmar & Co Solicitors for bringing this to my attention.

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Written by kerryunderwood

May 12, 2017 at 9:01 am

Posted in Uncategorized

2 Responses

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  1. Why bother with the portal? Send a letter of claim and say we’re not sure of value. Also say that, if the case settles for under £25k and you admit in 30/40 days without con neg we’ll accept fixed portal costs. If case ends up being worth over £25k you’re not restricted by using the portal. Sure I’ve missed something. It the portal isn’t mandatory I think so why risk it in any case?

    David

    May 12, 2017 at 9:17 am

    • David

      Yes, you have missed something.

      Although the portal is not mandatory, the rules provide for severe punishment in costs if you choose to avoid using the portal, or unreasonably exit the portal.

      As well as restricting you to portal costs even in the event of a victory after a contested trial, the court can order the successful claimant to pay all of the defendant’s costs for having to defend Part 7 proceedings outside the portal.

      For example in Uppal v Daudia LTLPI 9 July 2012

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

      The claimant went on to win and recovered portal only costs, as against its costs claim of £20,000.00 and was also ordered to pay the defendant’s costs on the indemnity basis.

      In other cases of unreasonably exiting the portal, only portal costs have been awarded, even though very substantial costs were incurred by the claimant.

      For example see Jaykishan Patel v Fortis Insurance Limited LTL 11 January 2012 and Ilahi v Usman, Manchester County Court 29 November 2012.

      This is all dealt with in chapter 41 of my book – pages 845 onwards which is available from Amazon here, or from me here for £80.00 including P&P.

      Kerry

      kerryunderwood

      May 15, 2017 at 3:39 pm


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