Qader and others v Esure Services Ltd [15.10.15]

Birmingham County Court upholds District Judge’s decision to apply fixed recoverable costs to multi-track claim involving allegations of fraud.

Implications

Pleading fraud in the defence to a low value (under £25,000) personal injury claim can result in the court allocating the matter to the multi-track. This is due to the often complex nature of the litigation and is also as a means of ensuring the allegations receive the attention they deserve.

It had been assumed by claimant solicitors that allocation to the multi-track would attract costs at an hourly rate, rather than fixed recoverable costs. However, the decision in Qadar means that claimant solicitors must now assume that fixed recoverable costs will apply to claims started in the Portal, regardless of allocation to the multi-track. For insurers, the cost of fighting fraud is reduced.

It should be noted that Part 45.29J of the Civil Procedure Rules provides an opportunity for claimants to seek summarily or detailed assessed costs in “exceptional circumstances”. The issue of what represents exceptional circumstances is likely to be explored further in future court decisions.

Background

The case involved a road traffic accident where the Claimant brought a claim for injury. The Defendant alleged the incident had been induced for financial gain.

At a costs management conference, District Judge Salmon ordered allocation to the multi-track with costs limited to fixed recoverable costs. This decision was based on:

  • Part 45.29A, which defines the scope of fixed costs as being applicable to claims started in the Portal.
  • Part 3.12(1)(c), which exempts proceedings which “are the subject of fixed costs” from costs management.

Permission to appeal against this decision was refused at first instance.

Decision

On appeal, His Honour Judge Grant dismissed the Claimant’s application for permission for appeal.

Considering the Claimant’s grounds for appeal, he held as follows:

  • Failure to interpret Part 45.29A purposively: in rejecting this ground, HHJ Grant simply affirmed the clarity of the rules as they stand. He said, “there is no ambiguity … which would require a judge to construe or interpret them.”
  • Failure to interpret Part 45.29A in accordance with the overriding objective: the crux of this ground was that fixed costs would not afford a level playing field between the parties. HHJ Grant considered that the overall nature of the case still answered the description of a low value personal injury claim.
  • Violation of Article 6 of the European Convention on Human Rights (right to fair trial): to a large degree, this ground was a duplication of arguments submitted under the first two grounds for appeal. HHJ Grant accepted that Part 45.29J would provide a “material safeguard against injustice.”