The Court of Appeal, handing down judgment this week, has determined that the fixed costs regime applicable to the Pre-action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims applied to the costs of an application for pre-action disclosure by a claimant-even where the claim had started off under the protocol but was no longer continuing under it when the application was made.
The claimant tripped and fell in February 2014 as a result of allegedly defective paving maintained by the respondent local authority. The claim was started under the EL/PL Protocol but in October 2014, the claim proceeded under the Personal Injury Protocol. The local authority failed to give pre-action disclosure pursuant to the protocol, and the claimant made an application in February 2015 for pre-action disclosure. By the time of the application hearing the defendant had given the necessary disclosure. The district judge then summarily assessed costs in the claimant’s favour at £1,250. The defendant appealed and a judge reduced the costs to £300 on the basis that they were governed by the fixed costs regime applicable to the EL/PL protocol. Notwithstanding the modest amount in dispute, the court allowed a further appeal as the issue as to whether the fixed costs regime applied had important practical consequences in terms of the cost/benefit of making applications for pre-action disclosure.
The Court of Appeal held that the fixed costs regime applied to the costs of an application for pre-action disclosure, as from the moment of entry into the portal, recovery of costs for pursuing or defending the claim was intended to be limited to fixed rates so as to ensure proportionality in the conduct of small or relatively modest claims. The fixed costs regime was subject only to a very small category of clearly stated exceptions. To recognise other, implied, exceptions would be destructive of the regime's clear purpose. The court said that the clear wording of CPR r.45.29A(1) and r.45.29D supported that conclusion, the latter providing that fixed costs and disbursements were ‘the only costs allowed’.
The claimant submitted that a PAD application was not part of a ‘claim’ for the purposes of the protocol, but instead is a separate and self-contained application, with its own separate jurisdiction, procedural rules and costs regime.
The Court of Appeal agreed that it was self-contained and separate from the claim. However, they held that in a PI context the connections between a PAD application and the claim for damages to which it relates are ‘particularly close’. It stated:
‘The PAD application both responds to a defendant's default in compliance with its disclosure obligations under the Personal Injury Protocol and operates in furtherance of the damages claim by assisting the claimant in its preparation. It also operates as a means whereby the procedural advantages intended to be conferred on claimants by the Personal Injury Protocol are made good by the court. Above all, the provision of pre-action disclosure powerfully contributes to early settlement, before the issue of proceedings, which is a stated aim of the Protocol.’
As such it concluded that it was sensible for a PAD application to fall within the description of interim applications in Part 45.29H and as such for fixed costs to apply.
Furthermore, the court said it appreciated the argument that limiting costs to fixed costs may deprive pre-action disclosure applications of their value as a ‘spur to compliance’ with protocol disclosure obligations as the fixed costs would refund only a small part of the likely outlay incurred. However, it found that the answer was not to extend the exceptions to the regime but to promote the availability of an application under CPR r.45.29J. This provision allows a claim to be made for an amount of costs (Excluding disbursements) which is greater than the fixed recoverable costs available.
Alternatively, if there was appropriate evidence to show that due to the limited recovery of expenditure on PAD applications, they were becoming less effective in sanctioning breaches of protocol disclosure obligations, then this may justify a review of the position by the CPR Rule Committee.
The appeal was dismissed and the claimant was entitled to recover the fixed fee of £300 for their pre-action disclosure application.
The full judgment can be accessed here.