Fixed costs under Section III of CPR 45: is there any escape?

HAMMOND V SIG PLC & SUBSIDIARY COMPANIE [2019] EWHC B7 (COSTS)

This was the latest in a series of unsuccessful attempts to escape fixed costs as governed by Section IIIA of CPR 45 by reason of exceptional circumstances under CPR 45.29J.

The claimant’s solicitors argued that it had been the claimant’s intention from the outset to pursue the claim outside the Portal. They had initially sent the defendant a letter of claim and only later added the claim to the Portal at the defendant’s insistence in order to progress matters, saying that “the Defendant refused to consider the matter unless a Portal submission was made”.

As the claim did not start with the CNF but with a Letter of Claim it was argued that CPR 45.29A (which applies to claims that have started under the Protocol) did not apply. Only, it was said, if the first notification of a claim is submitted by way of a CNF to the party against whom the claim is being made, has the claim “started” under the Protocol.

Ultimately, the claim settled for the sum £36,500.

There had, it was asserted, been a common understanding between the parties that the claim would not be subject to fixed costs and the defendant’s Part 36 Offer had been accepted expressly on the understanding that the claimant’s reasonable costs would be payable in accordance with CPR Part 36.13.

At no point, until Points of Dispute were served, did the defendant indicate any objection to the recovery of standard basis costs.

Master Leonard rejected each of the claimant’s arguments concluding that for the purposes of CPR 45.29A the claim had started in the Portal. He could find no evidence of any common understanding. Nor could he accept that a statement accompanying acceptance of the Part 36 Offer to the effect that costs would, in consequence, be payable on the standard basis had any bearing on the matter. Finally, he concluded that there was nothing about the claim itself which made it exceptional within the meaning of CPR 45.29J.

“The difficulty with this particular case is that having decided that the claim should be submitted to the Portal and pursued (initially) under the Protocol, the Claimant now seeks to remedy that by arguing that it was always unsuitable for the Protocol and should, in consequence, be seen as exceptional. The potential for satellite litigation, were such an argument to be acceptable in principle, seems to me to be considerable. It would create exactly the sort of uncertainty that the Court of Appeal sought to avoid in Qader v Esure.”

HAMMOND v SIG PLC & SUBSIDIARY COMPANIE [2019] EWHC B7 (COSTS)