Costs Brief February 2017

It's February already and we've rounded up the latest industry news for you - Gary Knight takes a look at an important decision on appeal in Briggs and 598 others v First Choice Holidays, plus there's guidance from the Court of Appeal on the fixed costs regime and a Guide to the Small Claims Track.

We hope you find this latest instalment of Costs Brief useful. Do let us know if there's something in particular that you'd like us to cover in a future issue.

Many thanks, Harmans Costs

Briggs and 598 others v First Choice Holidays & Flights Ltd

Readers may recall the detailed decision of Costs Judge Jennifer James in the above matter summarised in the December issue of Costs Brief.

In summary this was a group action resulting from illness (of varying severity) on holiday.
Base costs were just under £2 million whilst the addition of additional liabilities increased the Defendants’ liability to a shade under £4.5 million - £3,000.00 base costs per claim. The total damages awarded were £1.7 million divided between the Claimants depending on severity of symptoms.

The Defendants had considered that the Claimants had acted unreasonably in not pursuing the claims of 152 Claimants who had not been taken ill (but had had their holidays ruined) via mediation run by ABTA – the Costs Judge agreed; the scheme covered non-personal injury claims of up to £25,000.00 per booking and would have adequately covered the 152 Claimants’ complaints at a cost of £40,000.00 rather than the £456,000.00 base costs claimed. The Costs Judge considered it was neither “reasonable nor proportionate” to incur such costs by pursuing those matters in the group litigation. The Costs Judge held that the maximum the Defendants should pay in respect of each claim was the maximum ABT “A” fee; considering the finding did not “infringe the sanctity of the agreed costs order”.

The matter was the recent subject of an appeal to the High Court and heard by Mr Justice Singh, sitting with the Senior Costs Judge Master Gordon-Saker.

The decision of Costs Judge James was overturned with the Court ruling upon two important points of principle with respect to ADR.

Firstly the Court held that the Costs Judge was not entitled to go behind the costs order that had been made* and whilst the consideration of ADR was certainly a factor to be considered Mr Justice Singh held, “I do not consider the position has yet been reached that the mere availability of ABTA is enough to deny a successful party costs where they have a costs order”.

Secondly the defendant’s submission that to enter a CFA prior to choosing a voluntary arbitration was inherently unreasonable was rejected by the judge as being, “a point of principle that went too far.”

*Mr Justice Singh had regard to Lahey v Pirelle [2007] 1 WLR 998 and Halsey v Milton Keynes [2004] 1 WLR 3002.

Court of Appeal gives guidance on fixed costs regime

Fixed costs apply to pre-action disclosure applications made after leaving the portal – see Sharp v Leeds City Council [2017] EWCA Civ 33

The Court of Appeal recently decided what judges called “a short but important point of interpretation of the Civil Procedure Rules” which originated in a claim against Leeds City Council by a pedestrian who was injured after tripping on a footpath.

Briggs LJ said the appeal from a decision of Wakefield County Court concerned whether the regime for fixed costs provided by Section IIIA of Part 45 for claims which started, but no longer continue, under the EL/PL Protocol applies to the costs of an application under Section 52 of County Courts Act 1984 for pre-action disclosure in connection with such a claim.

He said the court had been told different District Judges had answered this point differently, with some assuming the fixed costs regime applies, while others had summarily assessed costs on the standard basis.

In this case a District Judge awarded costs of a PAD application by the Claimant against the Council summarily assessing them at £1,250.

On appeal, another Judge concluded that the fixed costs regime applied to the PAD application, and reduced the costs payable to £305.

Briggs LJ said in his judgment:
“To throw open PAD applications generally to the recovery of assessed costs would in my view be to risk giving rise to an undesirable form of satellite litigation in which there would be likely to be incentives for the incurring of disproportionate expense, which is precisely what the fixed costs regime, viewed as a whole, is designed to avoid.

“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.”

As a result the CoA upheld the Judge’s decision to award fixed costs only.

A Guide to the Small Claims Track

What it is, how it works and what Litigants need to know

When a claim is brought at court, the court will allocate it to one of three 'tracks'; the small claims track, the fast track and the multi-track. The small claims track is supposed to be a proportionate method of dealing with straightforward cases of limited value. As you will see, this does not mean that the operation of the track is always fair.

The small claims track is governed by Part 27 of the Civil Procedure Rules.

When will a claim be allocated to the small claims track?
After a defence to a claim is sent to the Court, the parties to the claim will be sent an allocation questionnaire by the Court. Using this form, the parties will inform the Court of certain facts about the claim, including how many witnesses they intend to rely on, whether they intend to rely on expert evidence and how long the trial of the claim is likely to take. Using this information, along with the value of the claim as set out on the claim form, the Court will allocate the case to the appropriate track.

As a general rule, a case will be allocated to the small claims track when it has a value of not more than £5000. The exceptions to this rule are;

(a) In personal injury cases, the claim will only be allocated to the small claims track if the value of the claim as a whole is not more than £5000 and the value of any claim for damages for personal injuries is not more than £1000; and
(b) Claims by tenants against landlords for an order that the landlord carry out repairs will only be allocated to the small claims track if the estimated value of the repairs is not more than £1000 and the value of any other claim for damages is not more than £1000.

However, courts will also consider other facts in deciding what track to allocate a claim to, including its complexity, the number of parties, the amount of evidence required and the importance of the claim to the general public.

Accordingly, a straightforward claim following the breakdown of an agreement between two parties, with a financial value of less than £5000, will most likely be allocated to the small claims track.

How does the small claims track work? Click the link to read more.

Statutory Charge and Article 8 Damages

Court report - Gary Knight highlights some interesting recent costs cases for Litigation Funding.

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