An appeal on the contentious issue of which fixed costs apply in portal ‘drop-out’ cases when they settle before trial, which has led to several conflicting first instance decisions, has been leapfrogged to the Court of Appeal from Birkenhead County Court.
The central issue arises from the practice of some county courts to list ‘drop-out’ cases for a disposal hearing in the first directions order, arguably skipping a stage in the fixed costs tables in CPR 45.29, and the case subsequently settles before that disposal hearing.
The question then is which stage has been reached – and particularly whether the stages are sequential, meaning you have to go through one to reach the higher fee in the next stage – and whether a disposal hearing is a trial.
In Terrance Bird v Acorn Group, a public liability claim, the claimant argued for the third column – meaning £3,790 plus 27.5% of the damages – while the defendant contended that the first column still applied, meaning £2,450 plus 17.5% of the damages.
District Judge Campbell ruled in favour of the claimant, saying that once the matter was listed for disposal, “the case, in my view, moved into column 3”.
She said: “There is absolutely nothing in the rules that tells the court or the parties that they must move sequentially through the columns….
“Indeed, there are a large number of cases which settle just before the disposal hearing or on the morning of it and I can take judicial notice of that fact as a judge who regularly deals with disposal lists. It cannot be right that those cases attract the same amount of costs as a case that settles after issue but before any allocation by the court.”
The CA decision is likely to impact many cases as the outcome of the appeal could have a significant impact upon the costs payable in these circumstances.
In RTA claims the pre-allocation FRC are £1160 (plus 20% damages) so there is a potential saving of £1340 against the post-listing FRC. The potential savings are greater in PL and EL claims – in the latter they would be £1650 and 10% of the damages (20% of damages is payable at the pre-allocation stage, rising to 30% post listing).
There are likely to be hundreds of cases where this issue could arise before the appeal is heard. Consequently, current cases which are subject to Disposal Hearings should be reviewed and where appropriate claimant’s should seek a stay of assessment of costs pending the appeal’s outcome.