Leaving the portal and the impact on costs

With the premise of fixed costs looming for a large proportion of the legal profession there may be a temptation for the Claimant to exit the relevant portal in order to increase the recoverable costs. However the following reported cases will demonstrate the pitfalls of unreasonably leaving the portal even if you have a Consent Order where the Defendant agrees to pay your reasonable costs on the standard basis.

Davis and others v Greenway [2013] Lexis Citation 141

In this case the Claimant left the portal and the Defendant agreed to pay the Claimant's costs on the standard basis at the settlement of the claim. The Defendant argued that the Claimant unreasonably left the portal and should only be able to recover fixed costs. The Claimant argued that as the Defendant agreed to pay costs on the standard basis and that the Consent Order is a binding contract that the Judge cannot go behind.

Master Simmons held that if the Claimant left the portal unreasonably the appropriate recovery would be fixed costs. However due to there being a Consent Order it was held that a Cost Judge did not have the power to vary the contract and that the Defendant could not rely on CPR 45.36.

Unfortunately for the Claimant, Master Simmons went on to find that whilst he could not rely on CPR 45.36 he was not required to perform a line-by-line assessment.. Instead he used the more general rule of proportionality and was able to find that the Claimant's costs were disproportionate and reduced them to that of fixed costs.

The outcome of this case is clear, if you unreasonably leave the portal you will risk the costs being reduced to the appropriate fixed fees, even if the Order does not limit you to fixed costs.

Brown v Ezeugwa [2014]

In the same vein as the case above there was an Order for the Defendant to pay the Claimant's costs on the standard basis and again the Defendant alleged that the Claimant left the portal unreasonably and should only be entitled to fixed costs.

The Court had awarded costs above normal fixed costs, however on appeal the matter was heard by HHJ Simkiss and DJ Lethem and they found the issues relating to costs fell into three stages:

• The First Stage is the award of costs. It was found that it was consented in the Order for the Defendant to pay the Claimant’s costs and the basis of assessment was to be on the standard basis.
• The Second Stage is the decision by the assessing Judge of what the Order for costs meant. This stage not surprisingly and not unusually elided into stage 3. However the original District Judge did set the assessment on the standard basis.
• The Third Stage is the quantification on that basis. The Judges stated “Where, in our judgment, he went wrong was not to apply his mind to the distinction between the award of costs and the direction as to the basis that the assessment should take place with the quantification or assessment process itself. CPR 44.3 and 44.4 are concerned with the award and the basis of assessment. CPR 45, albeit relating to fixed costs, is one of the provisions that deals with the quantification of those costs, and therefore in our judgment there is no reason why the assessing judge cannot exercise the powers under 45.36 in carrying out that assessment.”

The Judges therefore disagreed with Master Simmons and the powers under CPR 45.36 to apply fixed costs. But the outcome remained the same in both cases, a sum equivalent to the fixed costs.

Tennant v Cottrell [2014]

In this case the Claimant left the portal following a £0 offer from the Defendant in relation to heads of damage. The Claimant left the portal and the claim progressed to Part 7 proceedings in which a Defence was filed. The Claimant submitted that it was justified in leaving the portal. The Judge held the reason for leaving portal was due to the £0 offers which the Defendant is entitled to make.

DJ Jenkinson held that the Claimant was unreasonable in bringing the claim out of Portal when they had. He therefore allowed the fixed costs that would have applied had the matter proceeded within the portal.

It is evident from the cases above that the Claimant’s conduct is important in relation to what they are able to recover. These cases should serve as a warning that it is important that Claimants do not rush to leave the portal in an attempt to be able to recover greater fees from the Defendant as there is no guarantee that they will be able to recover costs on the standard basis even if agreed by the Defendant.

The following table shows the level of fixed costs recoverable in cases on or after 31 July 2013.

CPR 45.18 Table 6

CPR 45.18 Table 6A

The following table shows the level of fixed costs recoverable in cases on or after 31 July 2013 that have left the portal.

CPR 45.29 Table 6B

CPR 45.29 Table 6C

CPR 45.29 Table 6D

It is important to note that it is still possible to escape the recoverable fixed costs as detailed in CPR 45.29 (J). In exceptional circumstances an application can be made, however the Claimant making the application must exceed the amount of fixed costs recoverable by more than 20%. Failure to do so will result in the Claimant paying the Defendant’s costs of the assessment and in addition the Claimant will recover the lower sum of either the assessed costs or the fixed recoverable costs.

The following matter is an example of the application of CPR 45.29 (J) and what counts as exceptional circumstances. The case of Carlon v Domino’s Pizza Group Limited (Unreported: District Judge Wyatt, Birmingham County Court 27/08/10) involved an adolescent child who was knocked over by a car on a zebra crossing. The Claimant suffered orthopaedic injuries and psychological injuries, including PTSD and phobic anxiety about pedestrian travel. Nine months following the accident the Claimant began to develop anorexia nervosa which required her to stay in Hospital for a period. The Claimant’s solicitor was required to investigate the possibility that the Claimant’s disorder might have been a consequence of the accident. Judge Wyatt came to the view that:

“… the element of the possibility that there was a connection between her eating disorder or its exacerbation and this accident is and amounts to in itself exceptional circumstances.”

Further, the judge added that:

“… the possible connection to a severe eating disorder, particularly one that led to a prolonged period of inpatient treatment, was something that took this case well outside the normal range of orthopaedic and psychological consequences of a road accident that would be otherwise likely to fall within the fast track regime. I also take the view that it made it well outside the buffer zone of swings and roundabouts.”

The term “exceptional circumstances” is subjective and it cannot merely be that the Defendant has Defended the claim, there has to be something beyond the realms of what is expected from a usual claim.

The Following is an example of a claim where an application was made to rely on CPR 45.29 (J) and failed:

In the matter of Sargeant v Fellows, the Claimant was a passenger in her mother’s car when the accident occurred, liability was fairly promptly admitted. The Claimant suffered from a chromosomal disorder which caused a variety of problems, including intellectual and developmental delay, with limited understanding and behavioral disorders, such that she needs 24-hour care.

The Claimant sustained minor, soft tissue injuries in the accident and some psychological injuries. The Claimant's solicitors obtained a GP report and witness statements from the Claimant and mother. The GP report was compiled without examination of the Claimant due to her condition and was based largely on the evidence of her witnesses. Settlement was agreed, subject to the approval of the Court, in the sum of £2,200.

The Claimant’s argued against fixed costs due to the exceptional duty of care required in dealing with such a sensitive case involving a party with a disability and represented by a litigation friend; additional work, over and above that which one might normally expect in a claim of this type with the need to obtain detailed witness statements from the Claimant's mother and two carers. It was accepted on behalf of the Defendant that such matters made the case more complex/difficult, but it was denied that the same amounted to exceptional circumstances.

Judge Lumb agreed, holding that:

“The case was "only marginally” more complex than a case involving a young baby bringing a claim via a litigation friend. If a heightened duty of care was required of the Claimant’s solicitors as was submitted, then “one would have thought that the solicitors would not just simply entrust that to an agency to obtain those statements, but would go and obtain those statements directly themselves“.

While the case was not run of the mill, had unusual features and required additional work (compared to straightforward cases), it was not exceptional.”