Part IIIA of CPR 45, which came into effect on 31 July 2013, introduced the new Fixed Recoverable Costs scheme in respect of Road Traffic Accident (RTA), Employers Liability (EL) and Public Liability (PL) claims which are started under the 2013 Portal but then exit the relevant Portal.

Further, in light of CPR 45.29A and the decision in Qader v Esure [2016] EWCA Civ 1109, the Fixed Recoverable Costs apply to all claims that exited the relevant Portal and have not been allocated to the Multi-Track.

Accordingly, if a matter is submitted through the Portal and later exits the Portal owing to the complexity and high value but settles before it is allocated to the Multi-Track, then the costs are limited to the relevant fixed-costs. This also applied even if a Defendant accepts a Part 36 offer out of time.

However, it is possible to “escape” the fixed-costs.

In accordance with CPR 45.29J, a Claimant may apply for an order for costs exceeding the Fixed Recoverable Costs if it considers that there are exceptional circumstances.

To argue exceptional circumstances, there is a 2-stage test:

Test 1 - where there exceptional circumstances?

There is no definition or binding authority on the meaning of “exceptional” within the CPR.

However, some indications have been given in the SCCO case of Udogaranya v Nwagw [2010] EWHC 90186 (Costs), where it was noted that the dictionary definition of “exceptional” meant “unusual or not typical.”

Further examples include the case of Yorke v Adams (Unreported, Sheffield County Court, 27/03/08) where the Claimant suffered an exacerbation of pre-existing multiple sclerosis, which was exceptional for an RTA.

Another example is the case of Ford v Lincolnshire Road Car Company (Unreported, Lincoln County Court 26/09/11) where the Claimant may have suffered accelerated dementia as a result of the accident but decided not to pursue the issue because of the extra stress that would have been caused to the Claimant by proceedings.

Accordingly, to be able to escape the fixed costs, a Claimant will need to show that exceptional circumstances apply to the claim owing to its value and/or complexities that are unusual and not typical in traditional fixed costs matters.

Test 2 - fixed costs must be beaten by 20%

If a Claimant is able to satisfy the first test, then they need to beat the fixed costs by 20% pursuant to CPR 45.29K.

Accordingly, it is advisable to firstly double-check the amount of fixed-costs recoverable in a given case against the WIP figure on the file to determine whether there is any merit in arguing exceptional circumstances. Any potential reductions of the profit costs that may be applied by the Court when a Bill of Costs is assessed should also be taken into accounts.

In light of the above, it is recommended that upon receipt of any initial instructions, the potential complexities and value of the claim are assessed prior to submitting a matter on the Portal as the potential costs implications of failing to do so can be significant.

Izabela Lewinska

Please note: The Guidance and interpretation on these articles are merely a summary of our interpretation of the subject. We accept no liability for any misconstrued understanding of such issues and interpretations, nor any loss or damage sustained as a result of any reliance upon such views.