Source: https://www.costexperts.co.uk/contracting-out-of-fixed-costs/
Timestamp: 2019-10-21 23:20:54
Document Index: 485350919

Matched Legal Cases: ['art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'EWCA ', 'art 36']

Contracting out of fixed costs - MRN
Miss Seyi Adelekun -v- Mrs Siu Lai Ho
The conflict between fixed costs and traditional costs on an hourly rate basis continues.
In the helpful case of Miss Seyi Adelekun -v- Mrs Siu Lai Ho, his Honour Judge Wulwik has made an important decision that fixed costs did not apply to a case where a consent order had contracted otherwise. This case follows the earlier guidance set in Solomon –v- Cromwell [2012] 2 Costs LR 314, and potentially provides useful guidance for practitioners who may want to avoid the problematic CPR 45.29 and exceptional circumstances hurdle.
Briefly, by way of background to the case, the Claimant brought a claim for personal injury following an RTA. The matter proceeded on the MOJ Portal, before dropping out following no liability response from the Defendant. Proceedings were thereafter issued on or around December 2014, and allocated to the fast track. However, prior to the case proceeding to a Trial, the Defendant made an offer to settle the claim in the sum of £30,000 (gross).
The Part 36 offer was worded as follows:
“If the offer is accepted within 21 days, our client will pay your client’s legal costs in accordance with Part 36 Rule 13 of the Civil Procedure Rules, such costs to be subject to detailed assessment if not agreed.”
Crucially, the Part 36 offer made reference to Part 36.13, traditional standard basis costs as opposed to Part 36.20, fixed costs.
Upon receipt of the Part 36 offer, the Defendant agreed to the matter being transferred from the fast track to the multi-track, although, re-allocation never occurred. The offer was then accepted by the Claimant and a Tomlin Order agreed in the following terms and the pertinent paragraph underlined:
UPON the parties having agreed the terms of settlement set out in the attached schedule
(1) All further proceedings in this action be stayed except for the purpose of carrying the said terms into effect and that there be liberty to apply for that purpose.
(2) The Claimant’s application listed for 24 April 2017 be vacated.
(3) The Defendant do pay the reasonable costs of the Claimant on the standard basis to be the subject of detailed assessment if not agreed…..
The Tomlin Order was approved by the Court and embodied in an order made by District Judge Brooks on 24 April 2017.
Detailed Assessment/Appeal Proceedings
The parties were subsequently unable to agree whether or not the fixed costs regime applied; the Defendant arguing that the fixed costs regime applied pursuant to guidance in the case of Qader v Esure [2016] EWCA Civ 1109 and the Claimant disagreeing and seeking costs on an hourly rate basis under the argument that the parties had contracted out of fixed costs pursuant to the Part 36/Tomlin Order.
Given the impasse, the Defendant issued an application to determine the issue and at a hearing before Deputy District Judge Harvey on 7th February 2018, it was held that:-
“…Paragraph 3 of the Tomlin order should be varied so that the Claimant recovers from the Defendant her fixed costs under CPR 45IIIA…”
In light of DDJ Harvey’s decision, the Claimant proceeded to lodge an appeal, with the principle ground being that the DDJ wrongly varied the consent order and/or the DDJ had no power to vary the consent order containing the parties’ contractual agreement that the Claimant’s costs were to be subject to detailed assessment on the standard basis.
Before HHJ Wulwik on 18th October 2018, it was held that the Claimant’s principle ground of appeal was successful on the grounds that the consent order was not compatible with the award of fixed costs. Furthermore, HHJ Wulwik was critical of DDJ Harvey’s retrospective re-wording of the Tomlin Order and commented as follows:
“While it would have been sensible if the Claimant’s solicitors to have included as a term of the consent order that the claim be reallocated to the multi-track, in principle there was no reason why the Court should not give effect to the parties’ agreement that the Defendant was to pay the reasonable costs of the Claimant on the standard basis.”
Ultimately, a good case for Claimant practitioners and one that should be taken into account when considering settlement on cases which have previously progressed on the MOJ Portal, but have increased in quantum above the multi-track threshold.
By Jack Andrew 5th February 2019