Ferri v Gill [2019] EWHC 952 (QB)

“Preliminary Point 2 This case was started under the protocol for low value personal injury claims in road traffic accidents. The Claimant initially instructed Messrs Leigh Day. At some point in 2015 he transferred instructions to Messrs Field Fisher. At that point, the Claimant appears to have abandoned any attempt to comply with the protocol. No notification of removal from the protocol, whether in compliance with section 5.1 or 7.76 of the protocol, or at all, appears to have been given. The matter was settled in the course of a telephone conversation between the parties on 13.02.17. At the point at which the claim settled, sections 7.44 of the protocol applied. Any offer automatically included and could not exclude fixed stage 1 and stage 2 costs and disbursements. There is no “exceptional circumstances” provision in CPR 45, section III. Costs are fixed by CPR 45.18. Recoverable disbursements are set out in CPR 45.19. The Claimant has no other entitlement to costs. … Preliminary Point 3 Had this been a case which ‘no longer continued’ under the Protocol, CPR 45 Section IIIA would apply. All of the requirements of CPR 45.29A would be met. CPR 45.29B sets out the only costs allowed. The only relevant ‘escape’ from CPR 45.29B is the exceptional circumstances provision in CPR 45.29J. It is understood that the Claimant contends that CPR 45.29J is engaged in this case, although neither the Part 8 Claim Form, nor the Bill of Costs provide any explanation or justification in that regard. There is then further argument in support of the Preliminary Point 3 in the Points of Dispute. ”

“SECTION IIIA CLAIMS WHICH NO LONGER CONTINUE UNDER THE RTA OR EL/PL PRE-ACTION PROTOCOLS – FIXED RECOVERABLE COSTS…… Scope and interpretation 45.29A (1) Subject to paragraph (3), this section applies— (a) to a claim started under— (i) the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (‘the RTA Protocol’); …… …………. where such a claim no longer continues under the relevant Protocol or the Stage 3 Procedure in Practice Direction 8B; Application of fixed costs and disbursements – RTA Protocol 45.29B Subject to rules 45.29F, 45.29G, 45.29H and 45.29J, and for as long as the case is not allocated to the multi-track, if, in a claim started under the RTA Protocol, the Claim Notification Form is submitted on or after 31st July 2013, the only costs allowed are— (a) the fixed costs in rule 45.29C; (b) disbursements in accordance with rule 45.29I. Amount of fixed costs – RTA Protocol 45.29C (1) Subject to paragraph (2), the amount of fixed costs is set out in Table 6B….. TABLE 6B Scope and interpretation Application of fixed costs and disbursements – RTA Protocol Amount of fixed costs – RTA Protocol TABLE 6B 31. TABLE 6B Fixed costs where a claim no longer continues under the RTA Protocol A. If Parties reach a settlement prior to the claimant issuing proceedings under Part 7 Agreed damages At least £1,000, but not more than £5,000 More than £5,000, but not more than £10,000 More than £10,000 Fixed costs The greater of— (a) £550; or (b) the total of— (i) £100; and (ii) 20% of the damages The total of— (a) £1,100; and (b) 15% of damages over £5,000 The total of— (a) £1,930; and (b) 10% of damages over £10,000 ……. Claims for an amount of costs exceeding fixed recoverable costs 45.29J (1) If it considers that there are exceptional circumstances making it appropriate to do so, the court will consider a claim for an amount of costs (excluding disbursements) which is greater than the fixed recoverable costs referred to in rules 45.29B to 45.29H. (2) If the court considers such a claim to be appropriate, it may— (a) summarily assess the costs; or (b) make an order for the costs to be subject to detailed assessment. (3) If the court does not consider the claim to be appropriate, it will make an order— (a) if the claim is made by the claimant, for the fixed recoverable costs; or (b) if the claim is made by the defendant, for a sum which has regard to, but which does not exceed the fixed recoverable costs, and any permitted disbursements only. Failure to achieve costs greater than fixed recoverable costs 45.29K (1) This rule applies where— (a) costs are assessed in accordance with rule 45.29J(2); and (b) the court assesses the costs (excluding any VAT) as being an amount which is in a sum less than 20% greater than the amount of the fixed recoverable costs. (2) The court will make an order for the party who made the claim to be paid the lesser of— (a) the fixed recoverable costs; and (b) the assessed costs. Costs of the costs-only proceedings or the detailed assessment 45.29L (1) Where— (a) the court makes an order for costs in accordance with rule 45.29J(3); or (b) rule 45.29K applies, the court may— (i) decide not to award the party making the claim the costs of the costs only proceedings or detailed assessment; and (ii) make orders in relation to costs that may include an order that the party making the claim pay the costs of the party defending those proceedings or that assessment.”

“… 4. I do not have a great difficulty in forming a view that the value of a case per se is not determinative. Clearly, Qader indicates that value is not the mere basis for taking something out of the portal or indeed for treating a case as exceptional. Value might be a factor but it is not going to be determinative per se. 5. Nor do I think that costs per se are determinative. In my judgment, to say a case is exceptional because the costs are high would be to tend to jump the gun in terms of the 20% criterion under 45.29K and L, which is a protection there for a Defendant. But, nonetheless, costs are, again, a circumstance to be taken into account. 6. There is a protection for Defendants written into the Rules, and to decide otherwise would encourage a very unfortunate practice of issuing, incurring an issue fee, getting an allocation to track, just so as to escape the provisions of this Rule. If that were to happen, court time would be taken, costs would be incurred unnecessarily. That would not be consistent with the overriding objective or the policy of trying to keep costs within reasonable bounds and would tend to force parties into that approach as a mere way of coming out of the Portal. 7. So, to say that a case has to be exceptional would, I think, be wrong. I think it is right to say that one must look at this in the context of the sort of cases that are in the Portal and that the correct test would be that there must be some circumstance, or circumstances, which may include value, may include costs but may also include all the circumstances of the case which take it out of the general run of the type of such a case by reason of those circumstances. I do not go as far as saying that that, although circumstances must necessarily be costs drivers, although they will typically (be) costs drivers because otherwise parties would not be arguing over wanting to escape the costs provisions. 8. So, to the extent that I am influenced, which is to say to a limited degree, by Costin v Merron because it is not an admissible authority at all, it is a leave to appeal decision, I am adopting the first part of Lord Justice Leveson’s wording in his decision of paragraph 6 of that case, which is that there must be exceptionality in the sense that the case is taken out of the general run of this type of case by reason of some circumstance. I do not go as far as saying that circumstance necessarily must be in relation to costs, though in practice it often will be. 9. Now, in this case, what do we have? Is this a case which is in normal circumstances taken out of the general run of Portal cases? There are a number of things which suggest that it is not, and a number of things which suggest that it is, and I have to make a decision between the two on the facts of the case. 10. Percentage wise, it is quite considerably outside the range of the value of the sort of cases, that is something to take into account. The costs are somewhat higher than Portal costs, and again, that is something to take into account. They are not strikingly exceptional in themselves or, indeed, really very far outside the general run of these sorts of cases. But, on the facts of the case, I do find circumstances that are out of the general run. 11. We have a situation where a case was initially thought to be suitable for the Portal. It was discovered that the impact of these injuries was greater than had been thought. A different firm of solicitors was then instructed. There was then a somewhat unusually protracted period of pre-action discussion for a case of this sort due to the need for ascertaining a prognosis and the degree of treatment during that period which led to interim payments being made on two occasions. We have a situation where we have a self-employed builder, not unusual, a cyclist, a lot of people cycle, not unusual, but here we have a particularly keen (albeit not professional) amateur cyclist who is also a part time builder. This is somewhat outside the usual run of these sorts of cases. 12. In the round, I think this does satisfy the low bar, and I am setting this as a low bar and not a high bar, the low bar of being simply “outside the general run” of these cases per Leveson LJ, having regard to the facts that there are protections in the Rules for cases where, on scrutiny, it turns out that costs have exceeded the fixed costs by more than 20%. It is a low bar because the Portal is intended to deal with, in my judgment, simple cases which would typically be fast track cases and, for the factual circumstances that I have set out, it is on balance outside the general run of such cases. 13. So, I will make, in principle, a decision under Rule J to allow summary assessment, or to allow costs subject to some form of assessment.”

“Subject to rules 45.29F, 45.29G, 45.29H and 45.29J, [and for as long as the case is not allocated to the multi-track], if, in a claim started under the RTA Protocol, the Claim Notification Form is submitted on or after 31st July 2013, the only costs allowed are— (a) the fixed costs in rule 45.29C; (b) disbursements in accordance with rule 45.29I.”

“3 The RTA Protocol was not designed for the resolution of large claims or complex disputes. …… 5 A detailed and comprehensive fixed costs regime has, at least since July 2013, been an essential foundation for the effectiveness of the RTA Protocol, being part of a mechanism which strikes a balance between the need to secure access to justice for the victims of road traffic accidents by providing an economic basis for the provision of legal services to deserving claimants, and the risks of disproportionate costs being incurred in relation to relatively modest claims, with adverse consequences in terms of the cost of motor insurance for the public…. Reference was made to Paragraph 3.1 of the Protocol, sub-titled “Aims” 6 Claims arising from road traffic accidents properly started within the RTA Protocol may leave it without resolution or determination within it for a number of reasons. The most common reason is where liability is not admitted at Stage 1. Other reasons include a revaluation of the claim so as to take it above the RTA Protocol upper limit: see paragraph 4.3; or a failure by the defendant’s insurers or representatives to respond to the claim notification form, also at Stage 1. In such cases the claimant may seek to negotiate an out of court settlement with the defendant or, in default, issue proceedings in the ordinary way under Part 7. 7 Those proceedings will, if liability remains in dispute, typically lead to allocation to the fast track and a trial taking not more than one day. Alternatively liability may be admitted late, or the proceedings may be unopposed, leading to a judgment on admissions or in default for damages to be assessed, at a disposal hearing ordered under paragraph 12 of the practice direction supplementing Part 26. Of course, the case may be settled at any stage during those various procedures. As will appear, the costs regime for cases which started within the RTA Protocol is designed to provide a fixed costs outcome, whether the case fights or settles, thereby removing the all too prevalent risk in the past of expensive satellite litigation about the assessment of costs. …… 38. …… 54. ….The intended purpose of the fixed costs regime in this context was that it should apply as widely as possible (and therefore to cases allocated to the fast track, and to cases sent for quantification of damages at disposal hearings), but not to cases where there had been a judicial determination that they should continue in the multi-track. The intended restriction on the ambit of the fixed costs regime is clear……Similarly the substance of the provision which the Rule Committee would have made, if it had taken steps to enact that restriction would have been to provide that, from the moment when a case was in fact allocated to the multi-track, the Section IIIA fixed costs regime should cease to apply to that case. 55. By contrast, I do not consider that the Rule Committee would have carried back to a pre-allocation stage a policy to disapply fixed costs, merely because a claim properly started in the Protocols had grown in value beyond £25,000, or had become the subject of a pleaded defence of fraud or dishonesty. As I have said, it by no means follows that every such case would be inappropriate for management and determination in the fast track. To require the parties to guess, or the court to decide,whether a case which settled prior to allocation (to whichtherefore part A or the first column of part B of Table 6B wouldapply) was or was not subject to fixed costs would introduce adamaging and unnecessary degree of uncertainty into a schemewhich depends upon its predictability for its contributiontowards the proportionate, speedy and effective disposal of civilproceedings.”(my underlining)….”

“31The starting point is that the plain object and intent of the fixed costs regime in relation to claims of this kind is that, from the moment of entry into the Portal pursuant to the EL/ PL Protocol (and, for that matter, the RTA Protocol as well) recovery of the costs of pursuing or defending that claim at all subsequent stages is intended to be limited to the fixed rates of recoverable costs, subject only to a very small category of clearly stated exceptions. ……… 41.…The fixed costs regime inevitably contains swings and roundabouts, and lawyers who assist claimants by participating in it are accustomed to taking the rough with the smooth, in pursuing legal business which is profitable overall.”

“30 ….His judgment Briggs LJ in Qader is an important explanation of the comprehensive nature of the fixed costs regime; the small category of exceptions; and the fact that there will inevitably be swings and roundabouts in any regime designed to deal with high bulk, low value claims. … … 31 As noted, rule 45.29J allows an escape route from the fixed costs regime in “exceptional circumstances”

“Costs may be unreasonable in the particular case, but the scheme is intended to iron out fluctuations and, importantly, to cut out argument which is itself potentially very costly.”

“…..there were competing arguments about whether the requirement of “exceptional circumstances” in section 72A(3) should be strictly construed. In lower courts a very strict approach has sometimes prevailed. An expression such as “exceptional circumstances” must take its colour from the setting in which it appears. Bearing in mind the context I would not adopt a very strict approach to the meaning of exceptional circumstances.”

“24. What, then, are the principles by which the discretion to order costs to be paid by a non-party is to be exercised …… 25. A number of the decided cases have sought to catalogue the main principles governing the proper exercise of this discretion and their Lordships, rather than undertake an exhaustive further survey of the many relevant cases, would seek to summarise the position as follows. (1) Although costs orders against non-parties are to be regarded as “exceptional”, exceptional in this context means no more than outside the ordinary run of cases where parties pursue or defend claims for their own benefit and at their own expense. The ultimate question in any such “exceptional” case is whether in all the circumstances it is just to make the order…..” (ii) In R v Kelly [2000] 1 QB 199 at 208 the Court of Appeal considered the statutory requirement to pass a life sentence “unless the court is of the opinion that there are exceptional circumstances relating to either of the offences or to the offender which justify its not doing so”

“…the mandatory duty imposed on the court is not absolute. It is relieved of the duty to impose a life sentence where two conditions are met: first, that the court is of the opinion that there are exceptional circumstances relating to either of the relevant offences or to the offender; and secondly, that the court is of the opinion that those exceptional circumstances justify the court in not imposing a life sentence. We must construe "exceptional" as an ordinary, familiar English adjective, and not as a term of art. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual, or special, or uncommon. To be exceptional a circumstance need not be unique, or unprecedented, or very rare; but it cannot be one that is regularly, or routinely, or normally encountered…”

“18 The answer to the question in this appeal is essentially one of construction of CPR Pt 45. Like any provision of the CPR, the relevant rules in Part 45 must be construed by reference to their ordinary meaning when viewed in their context. That is, in the context of section II of Part 45, which must, in its turn, be construed in the context of the CPR as a whole…..this involves a consideration of the statutory purpose of the relevant rules.”

“6.1 A judgment falling into one of the categories referred to in paragraph 6.2 below may not in future be cited before any court unless it clearly indicates that it purports to establish a new principle or to extend the present law……. .2 Paragraph 6.1 applies to the following categories of judgment Applications attended by one party only Applications for permission to appeal…”

“2. …… UnderCPR 45.12the court is empowered to entertain a claim for an amount of costs greater than fixed recoverable costs, but “only if it considers that there are exceptional circumstances making it appropriate to do so”. 3. In this case the court was concerned with a comparatively straightforward road traffic accident where the minor claimant suffered comparatively modest physical injuries, but where it was not appreciated that her psychological symptoms were continuing until the matter came before the district judge initially for approval. 4. The position was as follows. A medical report recorded that the minor claimant had suffered nightmares and the like, but it was only when she gave evidence before the district judge for approval that she complained that she was continuing to suffer adverse symptoms. It was in those circumstances that the district judge declined to approve the settlement then on offer and adjourned the matter for further medical evidence to be obtained, after which, as I have recorded, an increased offer was forthcoming and the matters ultimately approved. 5. The claimant's solicitors then applied to take the case outside the fixed recoverable costs regime and determined that the circumstances were such that it was exceptional and appropriate to order increased costs. The argument before the district judge and indeed the judge was whether or not the case could be regarded as exceptional and whether the district judge misdirected herself or failed really to apply herself properly to the task in making a finding that it was. Mr Mallalieu, who appeared before the judge and has appeared on this renewal, argues persuasively that there was nothing very unusual about the case and that it is not sufficient merely that the circumstances be exceptional, but they have to be sufficiently exceptional as to make it appropriate to take the costs outside the fixed costs regime. The argument is to the effect that the circumstances of the accident cannot themselves be considered exceptional and that the only feature, namely that this claimant had not identified her continuing psychological symptoms, was not sufficient to justify further costs, not least because her solicitors could have asked the question in advance. 6. I, for my part, have no difficulty in concluding that the exceptional circumstances to which 45.12 refer must be exceptional in the sense that the case is taken out of the general run of this type of case by reason of some circumstance which means that greater costs are in fact incurred than could reasonably be expected to be incurred…….essentially the argument in this case was summarised by HHJ Welchman in these terms: “The judge in dealing with this case on these facts, dealing with a young child in an accident who does not disclose the continuing consequence of this accident until questioned by the district judge, thereby giving rise to further enquiries, it seems to me that it falls within the ambit of judicial discretion. This was a decision the district judge was entitled to reach.” 7. Mr Mallalieu argues that the district judge failed to give adequate weight to the context that cases of this nature are intended to consist of swings and roundabouts, with some cases costing more than others but not falling outside the fixed costs regime, and the additional costs are not the costs of the psychological report which should have been incurred in any event but merely the additional hearing. 8. All these are valid arguments which were deployed doubtless before the district judge and certainly before the circuit judge. 9. When refusing permission to appeal Jackson LJ, whose knowledge of this area of the law is second to none, observed: “Both the district judge and the circuit judge were concerned with the application of Rule 45.12 to the particular facts of this case. This proposed appeal does not involve any important point of principle or practice nor is there any other compelling reason for the Court of Appeal to hear the appeal. The wording of Rule 45.12 does not require judicial exegesis.” 10. Mr Mallalieu argues that, because a number of different district judges have reached different views as to the meaning of the words “exceptional circumstance”, there is indeed an important point of principle. 11. In my judgment the phrase “exceptional circumstances” in the context of 45.12 speaks for itself. It cannot possibly mean anything other than that, for reasons which make it appropriate to order the case to fall outside the fixed costs regime, exceptionally more money has had to be expended on the case by way of costs than would otherwise have been the case. In those circumstances it does not appear to be that it can be argued that there is an important point of principle or practice which requires further review by this court….. I do not consider this case merits further attention by the court, on the basis it does not satisfy the second appeals test. The application is therefore refused.”

“The judge in dealing with this case on these facts, dealing with a young child in an accident who does not disclose the continuing consequence of this accident until questioned by the district judge, thereby giving rise to further enquiries, it seems to me that it falls within the ambit of judicial discretion. This was a decision the district judge was entitled to reach.” “Both the district judge and the circuit judge were concerned with the application of Rule 45.12 to the particular facts of this case. This proposed appeal does not involve any important point of principle or practice nor is there any other compelling reason for the Court of Appeal to hear the appeal. The wording of Rule 45.12 does not require judicial exegesis.” (i). The statements in [6] and [11] that the reason for exceptionality has to be that “because of some circumstance greater costs have been incurred than could reasonably be expected to be incurred” and “exceptionally more money has had to be expended on the case by way of costs than would otherwise have been the case”, would not appear to survive Hislop at [57] (ii). despite not having the benefit of the decision in Hislop at the time she made her decision, the Master adopted only the first part of Costin paragraph 6. That meant she adopted the phrase: “the exceptional circumstances …must be exceptional in the sense that the case is taken out of the general run of this type of case”

“It is a low bar because the Portal is intended to deal with, in my judgment, simple cases which would typically be fast track cases and, for the factual circumstances that I have set out, it is on balance outside the general run of such cases.”