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Court of Appeal grants leeway on fixed costs application

The Court of Appeal has ruled that fixed fees do not have to apply to a case which dropped out of the road traffic accident protocol. In two joined-up cases, Lord Justice Briggs said the committee which drafted the current costs rules had never intended to create such a rigorous approach to the regime.

The RTA claims, Qader v Esure and Khan & Anr, had each dropped out of the protocol and into the multi-track as the defendants in both contested whether dishonesty was involved.

The claimants, both represented by north-west firm Nesbit Law Group, said the resulting cases would become so expensive to run their costs would far exceed those allowed in the fixed costs regime.

Briggs conceded the Civil Procedure Rules appeared to indicate that claims must continue to be subject to fixed costs if commenced in the protocol, except in exceptional circumstances.

But he said that sometimes a contractual or statutory provision was ‘so irrational in its effect’ that the court can say that it must have had a different meaning.

‘The intended purpose of the fixed costs regime in this context was that it should apply as widely as possible but not to cases where there had been a judicial determination that they should continue in the multi-track,’ he said.

‘The intended restriction on the ambit of the fixed costs regime is clear, and the only reason for that restriction not being enacted in section IIIA of Part 45 appears to be inadvertence.’

Briggs said he recognised defendants’ fears that his decision could lead to satellite litigation, as claimants seek to disapply the fixed costs regime, but he insisted the risk was addressed by relying on the ‘good sense and vigour’ of case management judges to further the overriding objective and penalise those who abuse the opportunity of the allocation stage.

Briggs added that the court had been required to consider whether the rules included a ‘drafting mistake’ and he invited the CPR committee to revisit this anomaly.

Chris Daniels, head of costs at Nesbit Law Group, said it was unusual for a firm such as his to go up against a big insurer and come out successful when the rules appeared to be against the claimants.

‘It is a great result for claimants, particularly considering the defendants were attempting to limit the claimant’s resources to those of fixed costs but allowing themselves unlimited resources in matters where allegations of fraud have been raised,’ he said.