The County Court at Central London recently held that fixed costs did not apply to a case where a consent order had stated that costs were to be assessed on the standard basis, departing from the first instance decision.
The claim was made following a road traffic collision. Proceedings were issued, and the claim was allocated to the fast track. An application to reallocate the claim to the multi-track was made. Prior to the application being heard, the Defendant made an offer of settlement, also indicating they consented to the application.
The Claimant accepted the Defendant's Part 36 offer of £30,000. The Tomlin Order approved by the Court stated:
"The defendant do pay the reasonable costs of the claimant on the standard basis [emphasis added] to be the subject of detailed assessment if not agreed".
The parties were then unable to agree as to whether or not the fixed costs regime applied; the Claimant sought costs of £42,856.34.
An application was made to resolve the matter. In arriving at this conclusion, DDJ Harvey considered whether the parties could consent to the standard assessment of costs where fixed costs usually applied.
He held that the costs should be decided in line with the fixed costs regime under CPR Part 45.
At first instance, the Claimant argued that it was agreed that the claim should be allocated to the multi-track before the Part 36 offer was accepted. DDJ Harvey did not address this issue. His Honour Judge Wulwik did consider this on appeal.
The Claimant argued that DDJ Harvey had no power to vary the parties' contractual agreement.
HHJ Wulwik considered the cases of Solomon v Cromwell Group Plc and Sharp v Leeds City Council. He noted that the Claimant had applied to reallocate the claim to the multi-track, and this had been agreed by the Defendant prior to the Claimant accepting the Part 36 offer and the consent order being drawn up.
The judgement in Solomon had stated "there was no reason in principle why, if parties choose to agree different terms, the agreement should not be enforceable by ordinary process".
The consent order clearly stated that the Defendant would pay the reasonable costs of the claimant on the standard basis. The Defendant had already agreed to the matter's reallocation to the multi-track. It would not, on ordinary reading, be understood as an agreement for costs to be paid on the usual basis of fixed costs.
Judge Wulwik held that "the costs order that was agreed by the parties in paragraph 3 of the consent order was entirely consistent with the parties' agreement that the claim should be reallocated to the multi-track".
The appeal was successful, and the Defendant was ordered to pay costs on the standard basis.
Consistency of decisions?
The success of the appeal was inconsistent with previous case law – Bratek v Clark-Drain Limited being the most recent example:
What can we learn?
The Judgment for Miss Seyi Adelekun -v- Mrs Siu Lai Ho can be found here