Fixed costs: not applicable to multi-track claims started in the portal
Qader and others v Esure Services Ltd [16.11.16]
In its second decision on fixed costs in the space of a week, the Court of Appeal has given its view on the application of fixed costs to multi-track claims that started in the portal. While the decision appears a just one, the route to it is surprising.
Although the finding represents a disappointing result for defendants, the truth is that no one really expected fixed costs to apply to multi-track cases (at least at this stage, pending the potential expansion of fixed costs into the multi-track, currently under review by Lord Justice Jackson).
In practice, there is not a significant number of cases that start off their life in the portal (the process for low-value personal injury claims) that are subsequently allocated to the multi-track. As the court recognised, there are only a limited number of reasons for such an event, an allegation of fraud for example, so the financial impact of this decision will not be damaging to insurers.
Perhaps the more worrying aspect of the decision is the route by which the Court of Appeal came to its decision. In finding that the judges in the courts below were entirely correct in their application of the rules, the Court of Appeal left itself with no alternative but to effectively rewrite the rules, by the addition of the phrase:
“…and for so long as the claim is not allocated to the multi-track…”
This is surprising in the context of its finding that the rules as they are presently drafted are “perfectly clear” and:
“…the language of Part 45.29A and B, taken together, appears unambiguously to apply the fixed costs regime to all cases which start within the relevant Protocols but no longer continue under them.”
Despite this clarity, the court found that the Rule Committee had committed a drafting error when writing those rules. It held that it must have been its intention to abide by the government’s intention to exclude multi-track cases from the fixed costs regime, even those that originally started off life as low-value claims suitable for handling within the portal.
In previous decisions, the Court of Appeal has determined that the courts are there to properly administer the law as it stands (providing there is no ambiguity in the law) whilst urging those drafting the laws to amend them if they produce a perceived injustice. In these appeals, the court has used its exceptional jurisdiction to remedy what it perceived to be an obvious drafting error, again urging a rewriting of the rules. That seems an arguably dangerous step to take in circumstances where the present rules are clear.
View our review of the first instance decision, which sets out the full background.
In summary, the case concerned a low-value RTA claim that started out in the portal. It was subsequently allocated to the multi-track given the defendant’s contention that the accident was staged and therefore fraudulent.
The court of first instance and the first-tier appeal judge found that the costs of the case still fell within the fixed costs regime even though it was subsequently allocated to the multi-track.
The Court of Appeal found unanimously for the claimant, reversing the decisions of the courts below, even though those decisions were correctly based on the unambiguous rules as they presently stand. The Court of Appeal has found that the rules must be a drafting error and urged the rewriting of them.
The Court of Appeal considered this case together with the appeal in Khan and another v McGee, in which it reached the same conclusion.