In Doyle -v- M&D Foundations and Building Services Ltd  EWCA Civ 927 the Court of Appeal held that a consent order which provided that the Defendant would pay the Claimant’s costs “to be the subject of detailed assessment if not agreed” was an agreement to contract out of the Fixed Costs regime. The Claimant’s costs were therefore to be assessed on the standard basis.
The Claimant was an employee of the Defendant. The Claimant was injured during the course of this employment whilst working on a building site. The Claimant commenced a claim against the Defendant under the Pre-Action Protocol for Low Value Personal Injury (the EL/PL Protocol).
The Defendant made a Part 36 offer. As it was less than 21 days before trial the Claimant responded stating that quantum was agreed but the terms of settlement would need to be set out in an Order. The agreed order provided that the Claimant’s costs would be “subject of detailed assessment if not agreed”.
The Court distinguished the case from Ho -v- Adelekun  EWCA Civ 1988 on the basis that in that case it had been clear that the parties intended to compromise on Part 36 terms (which would have engaged Part 45). In this case, the Claimant had expressly stated that the Part 36 offer was rejected.
The Order did not include the words “on the standard basis”. The Court rejected the Defendant’s argument that this meant the Court should assess the fixed costs. It held that where costs are “assessed” they are inherently not “fixed”. The meaning of “costs to be subject to detailed assessment” was therefore that costs be assessed on the standard basis.
The Court held that “if parties wish to settle on [a fixed costs basis] it is easy enough to say so.” Parties should ensure that the basis of settlement / assessment is clear. An agreement for costs to be assessed is an agreement to contract out of fixed costs.
Matthew Rose is a Solicitor and Associate in the Costs and Litigation Funding Department at Clarion Solicitors. You can contact the team at firstname.lastname@example.org