Court of Appeal rules that costs on the indemnity basis awarded under Part 36 are subject to the cap set out in CPR r47.15(5)

If a detailed assessment is commenced in the High Court or the County Court after 1 April 2013 and total costs claimed by the receiving party are £75,000 or less, there will be a provisional assessment. A provisional assessment is intended to be speedy and is done on paper. CPR r47.15(5) provides that "In proceedings which do not go beyond provisional assessment, the maximum amount the court will award to any party as costs of the assessment (other than the costs of drafting the bill of costs) is £1,500 together with any VAT thereon and any court fees paid by that party".

In this case, the claimant's mesothelioma claim settled and the claimant made a Part 36 offer in respect of her costs, which she beat when her costs were provisionally assessed. The issue in this case was whether her costs of the assessment should be capped or whether CPR47.15(5) was overridden by Part 36, so that she should receive her costs on the indemnity basis without any cap.

The claimant referred to the decision of Broadhurst v Tan, in which it was held that Part 36 overrode the fixed costs regime for low value personal injury claims. The Court of Appeal has now held that that case was not directly applicable here because fixed costs are awarded whether or not they are incurred, whereas CPR r47.15(5) only provides for a cap. So, if a party's costs awarded on the indemnity basis under Part 36 is less than the cap, the full sum will be awarded. However, where, as here, costs on the indemnity basis exceed the cap, those costs will be capped on the terms laid out in CPR r47.15(5).