The Claimant suffered injury in a minor RTA. Proceedings were issued claiming general damages in excess of £1,000. The claim was settled prior to allocation for £400 general damages and £719.06 credit hire. The consent order provided that the Claimant’s reasonable costs should be assessed on the standard basis. The Defendant argued that, notwithstanding the terms of the consent order, costs should be assessed with reference to the small claims limit. At first instance the District Judge ruled that the consent order precluded an assessment with reference to the small claims track. On appeal before HHJ Stewart QC that decision was reversed, with the Judge finding that there was nothing in “reasonable” or “standard basis” preventing a judge from finding that the appropriate award of costs was on the small claims basis.

Held: The Court of Appeal held that the fact that a claim would have been allocated to the small claims track was material when it came to assessing what costs were payable. In so doing the Court broadly applied the principles in Lownds v Home Office and accepted that CPR 44.5(1) allowed a judge to take all the circumstances into account.

Comment: This is a welcome move away from the apparently rigid guidance provided in Lahey v Pirelli Tyres Ltd as to what may be taken into account on assessment. It is a positive decision for defendants and their insurers, particularly when considering the increasing number of claims fuelled by claims management companies and credit hire companies which fall within the small claims track. This decision will cause those operations to consider whether they pursue such claims at all via a lawyer as they may not be able to recover costs. In practical terms it will also mean that insurers can settle cases which are small claims (or thereabouts) in the knowledge that they can take up matters in relation to costs at a later date on assessment.