Practitioners in RTA or EL/PL cases take note! Settlement by Part 36 can have unexpected consequences, and defendants must seriously consider whether making a Part 36 offer is appropriate if they wish to dispute the costs claimed.
[27/09/18 – UPDATE] the issues have been determined on appeal – read the report here
Background
I was recently instructed in relation to an RTA claim in which, following submission of the claim notification, form the defendant had written to the claimant stating that it had LVI concerns which, it said, required further investigation. The claimant thereafter wrote to the defendant confirming that due to the concerns raised, the matter was no longer suitable for the portal and therefore the matter had exited the portal pursuant to the paragraph 7.76 of the RTA Protocol.
The matter proceeded and ultimately settled by way of Part 36 following the issue of proceedings but before a case management conference.
The claimant sent a schedule to the defendant setting out the relevant costs with Table B under CPR 45.29A.
The defendant responded by stating that the fact that LVI was raised was not sufficient justification for the matter to exit the portal, that liability was admitted and that therefore the matter should have remained within the portal and the court should restrict the claimant to portal costs.
Analysis
This was a matter which started under the RTA Protocol, but no longer continued under that protocol,[i] and therefore the starting point for determining the claimant’s entitlement to costs is CPR 36.20.
The right to detailed assessment arises only where there is an order that a party pay another parties costs to be assessed if not agreed. This can happen in the following ways:-
- The court makes an order in those terms (either by consent or otherwise);
- Such an order is deemed to have been made pursuant to CPR 44.9(1), specifically as a result of the operation of:-
- CPR 3.7 (claim struck out for non-payment of fees)
- CPR 3.7B (sanctions for dishonouring cheque)
- CPR 36.13 (a CPR 36 offer is accepted); or
- CPR 38.6 (claimant discontinues)
It is important to note that CPR 36.13 only applies subject to CPR 36.20[ii], thus an order for assessment of costs is deemed to have been made only where the claim settles pursuant to CPR 36.13, and not where settlement is pursuant to CPR 36.20.
The applicable regime is that contained within CPR 36.20(2), which states that ‘where a Part 36 offer is accepted within the relevant period, the claimant is entitled to the fixed costs in… [the relevant table].. of Part 45 for the stage applicable at the date on which notice of acceptance was served…’ The only relevant factor is when the claim actually settled, and there is no right for the claimant to bring assessment proceedings, or for the defendant to dispute the costs claimed.
CPR 45.29A states that it applies ‘where a claim is started under the [RTA Protocol] but no longer continues under the relevant Protocol…’ This is a simple question of fact, and there is nothing which provides that the claim must have left the portal ‘correctly’.
It is worth noting that CPR 45.29A does state that ‘nothing in this section shall prevent the court making an order under rule 45.24’. Pursuant to CPR 45.24(2) and (2A), where the court determines that a claimant did not comply with the relevant protocol the court may make other orders in respect of costs. It is critical to note that these paragraphs apply only where judgment is given in favour of the claimant. Where the claim has settled, as will always be the case where there is offer and acceptance pursuant to CPR 36, there has been no judgment.
Summary
If a CPR 36 offer made in RTA or EL/PL proceedings is accepted within the relevant period for that offer, the claimant will be entitled to the costs within the relevant table applicable as at the date notice of acceptance was served. There is no right for a defendant to dispute the level of costs claimed. Defendants in such cases should consider whether to make a Part 36 offer at all.
Whilst a defendant might seek to argue that it had already raised issue with whether the claim had left the portal correctly, it is my view that such an argument would be unlikely succeed because the consequences of Part 36 are clear, and that by making such an offer the defendant has compromised its right to do so.
If defendants wish to settle such claims but preserve their right to dispute the claimant’s costs, they should settle by way of a consent order providing that costs be assessed.
Please note that this question has not currently been determined by the court and is my current recommendation for ‘best practice’. Updates shall follow as the position develops.
Matthew Rose is a Solicitor in the Costs and Litigation Funding department at Clarion Solicitors. You can contact him at matthew.rose@clarionsolicitors.com, or the Clarion Costs Team on 0113 222 3248.
[i] See CPR 36.20(1)
[ii] See CPR 36.13(1)
