The Court of Appeal has held fixed costs apply to pre-action disclosure (PAD) applications in cases that leave the personal injury portals.

The decision was made on the second appeal in Sharp v Leeds City Council, following the Appellant making a PAD application as the Respondent failed to comply with its disclosure obligations under the Protocol.

At the first application hearing, the judge summarily assessed costs in the appellant's favour at £1,250; however the Respondent appealed and costs were reduced to £305 on the basis fixed costs applied under the EL / PL Protocol.

The question to be considered by the Court of Appeal was whether fixed costs apply to a PAD application in ex-protocol cases. Different district judges had adopted different approaches to this issue at first instance.

Briggs LJ giving the judgment concluded that: "the fixed costs regime plainly applies to the costs of a PAD application made by a claimant who is pursuing a claim for damages for personal injuries which began with the issue of a CNF in the Portal pursuant to the EL/PL Protocol but which, at the time of the PAD application, is no longer continuing under that Protocol". This is because the fixed costs regime is intended to be clear, with expressly stated exceptions set out, and hence no implied exceptions could be allowed.

This is good news for insurers as the cost of a PAD application will be limited to £250 plus VAT under CPR 45.29H.

However insurers should be aware that if "exceptional circumstances" apply, a court may increase a claimant's costs entitlement. Briggs LJ noted that such circumstances may include deliberate disregard of protocol obligations, which would not be regarded "as unexceptional merely because it was frequently encountered". Defendants would therefore be best placed to comply with their disclosure obligations or risk being required to pay additional costs.

Briggs LJ also noted that if the fixed costs regime fails to appropriately sanction breaches of protocol disclosure obligations, consideration would be given to increasing the fixed costs entitlement.