November 7, 2019

Court of Appeal gives definitive guidance on fixed recoverable costs and disbursements

In a victory for defendant insurers and practitioners, the Court of Appeal has provided clear guidance that Counsel's fees for advice in child cases cannot be recovered under CPR Part 45.29I where the work claimed for by the disbursement is already included within the fixed recoverable costs regime. Similarly, the Court of Appeal made helpful comments for insurers with regard to the recoverability of translation/interpreters' fees.

Background

The Claimant (a minor aged seven) was involved in a road traffic accident in September 2015. A claim was issued through the portal, the Defendant denied liability and the claim fell out of the portal. The Defendant subsequently admitted liability and offered the Claimant £2,000 in full and final settlement of his claim.

The Claimant's solicitors sought Counsel's advice as to the offer, in line with Practice Direction 21 which states the court must approve settlement of any minor claim: "An opinion on the merits of the settlement or compromise given by Counsel or solicitor acting for the child or protected party must, except in very clear cases, be obtained."

Counsel recommended acceptance of the offer and settlement was approved by the Court, who confirmed that the Claimant's costs would be assessed if not agreed.

The Claimant's solicitors' bill of costs included a £150 disbursement for Counsel's advice. The Defendant disputed Counsel's fee, arguing it was outside the fixed costs regime provided by CPR 45 Section IIIA.

A provisional assessment, an oral assessment and an appeal of the oral assessment all concluded that the fee was recoverable on the basis that the advice was required for the purposes of settling a minor claim.

District Judge Hale stated: "This is a particular situation where the rules require a particular piece of work to be done. There is no discretion about it.... It seems to me that the fact the claimant is a child is a particular feature of the dispute which entitles and indeed requires the court to look to the exception to decide whether or not it is recoverable."

As the claimant was a child, the need to obtain Counsel's advice on an offer/valuation of claim constituted "a particular feature of the dispute" per the definition of CPR 45.29l(2)(h).

The Defendant was permitted to appeal to the Court of Appeal on the basis that the points in dispute were of wide application namely:

(a) Was Counsel's advice "due to a particular feature of the dispute"?

(b) If the advice was due to a particular feature of the dispute, was the cost thereof a disbursement reasonably incurred which the court should allow, in addition to the fixed recoverable costs?

The judgment

The appeal was granted.

Considering the first issue, Lord Justice Coulson laid out particular features which he considered to be features of a disputed road traffic claim such as "how the accident happened, whether the defendant was to blame for the accident, the nature, scope and extent of the injuries and their consequences, and other matters of that kind."

In this instance, he found that the need for Counsel's advice did not arise from a particular feature of the dispute; the advice was needed because "it is an almost mandatory requirement in all RTA cases where the claimant is a child. It was therefore caused by a characteristic of the Claimant himself and does not fall within the exception."

Lord Justice Coulson therefore concluded that the Claimant being a child was not a particular feature of the RTA dispute between the two parties. Counsel's advice on the offer was therefore not covered by CPR 45.29I(2)(h).

On the second issue, he held that Counsel's fee was a disbursement and it had been reasonably incurred. However, this did not mean that it would be a disbursement recoverable under CPR 45.29I. Instead, the work done by counsel "must be deemed to be included" within the fixed costs that the Claimant would receive. The judge found that the system of fixed recoverable costs "operates on the premise that all the costs which might ordinarily be expected to be incurred up to a particular stage of the case will be deemed to be included in the amount stated by way of fixed recoverable costs". A disbursement is a one-off item for a specific item of work.

Although strictly obiter, the Court of Appeal went on to make helpful comments with regard to translation services, stating that the fact that a claimant could not speak English and required an intermediary was also a characteristic of the claimant rather than the dispute.

"Age, linguistic ability and mental wellbeing are all characteristics of the claimant regardless of the dispute. They are not generated by or linked in any way to the dispute itself and cannot therefore be said to be a particular feature of that dispute”. 

Further, Coulson LJ gave guidance that “the particular features of the dispute in an RTA claim will commonly be matters such as: how the accident happened, whether the defendant was to blame for the accident, the nature, scope and extent of the injuries and their consequences, and other matters of that kind. For example, the particular circumstances of the accident may be sufficiently unusual to require an accident reconstruction expert, or the injuries may be so complex that they require a number of different experts’ reports. Such additional involvement of experts may also require specific advice from Counsel. Depending always on the facts, such costs may be said to be a disbursement properly incurred as a result of a particular feature of the dispute.”

What can we learn?

  • This decision will be viewed positively by defendant insurers and practitioners, and the clear guidance welcomed. Insurers may have previously elected to routinely pay fees for disbursements such as Counsel's advice in child cases, or translation services fees in cases falling under Section IIIA. This decision demonstrates that these disbursements can be challenged when claimed under CPR Part 45.29.
  • Other Counsel's fees, such as those for particulars of claim and/or schedule of loss also ought to be subject to challenge as falling within the fixed costs provided for.
  • Counsel's fees may be justified in complex cases and there is provision at paragraph 7.10 of the Pre Action Protocol for specialist legal advice and CPR Part 45.23B.