Claimant unreasonably electing to exit claim from portal

Smith v Owen (2016) Birkenhead County Court

This is an interesting case where the claimant was challenged for exiting their claim from the portal. Although this case involved a road traffic accident the same challenges are faced by defendants when claimant’s exit claims for non-payment of disbursements in employers’ liability and public liability portal claims.

Facts

The claimant was travelling on a bus that was involved in an accident due to the defendant driving their vehicle into the side of the bus. The claimant sustained soft tissue injuries to her neck, shoulders and shin and submitted their CNF via the portal for low-value road traffic accident claims. The defendant admitted liability within the relevant time period and the claim proceeded to stage 2 of the portal.

The parties did not agree quantum and the claimant sent the court proceedings pack via the portal on 5 February 2016. The defendant responded to the court proceedings pack on 8 February 2016 and agreed to pay the £2.50 DVLA fee but alleged that no photographs had been received of the claimant’s scarring.

The claimant exited the claim from the portal on the basis that the defendant had failed to pay the DVLA fee and the fee for the photographs after the court proceedings pack had been submitted. The claimant wrote to the defendant advising of the position and then issued part 7 proceedings, which attracted higher fixed costs than what would have been claimed, had the matter proceeded to a stage 3 hearing.

Following the claimant issuing part 7 proceedings, the defendant filed a defence admitting negligence and the matter proceeded to a disposal hearing at Birkenhead County Court.

At the hearing, District Judge Campbell, assessed the quantum of the claimant’s damages and heard the defendant’s submissions that the claimant had unreasonably elected the portal process and unreasonably commenced part 7 proceedings.

Decision

District Judge Campbell concluded that under the MOJ portal, there is an obligation on defendants to pay disbursements that have been agreed. Based on the facts, the fees for the photographs had not been agreed so the defendant had not been liable to pay these fees upon being supplied with the court proceedings pack.

In respect of the DVLA fee, it was held that the rules provide that where the defendant does not comply with paying the agreed disbursements within the required time period following receipt of the court proceedings pack, the claimant may give written notice that the claim will no longer continue under the portal and start part 7 proceedings.

The court held that in these circumstances, where the claimant has given written notice and elected to exit the claim from the portal, the court has the discretion to look at whether removing the claim from the portal was a reasonable step to take.

It was specifically concluded that the claimant could have easily allowed the case to proceed to a stage 3 hearing and not elected to remove it from the portal process. It was held that there was an obligation on the parties to cooperate and the fundamental principle behind the pre-action protocol was for court proceedings to be a last resort.

District Judge Campbell referred to and disagreed with the judgment in Chisanga where it was held that non-payment of a DVLA fee meant that a claim mandatorily exited the portal. He concluded that the claim could have easily concluded to stage 3 of the process and although there was no obligation on the claimant’s solicitors to chase the DVLA fee, it was incumbent on them to further the overriding objective, have an eye on proportionality and assess whether it was reasonable to exit the claim from the portal.

The court held that the claimant’s conduct in exiting the claim from the portal over a £2.50 DVLA fee (that they knew had been agreed) was disproportionate and unreasonable in the circumstances.

What this means for you

This is a welcome judgment where the court looked at the literal meaning of the rules and held that although disbursements must be paid there is no reference to it being mandatory for a claim to exit the portal where disbursements are not paid, following receipt of the court proceedings pack.

In this case, it was concluded that the rules made clear that a claimant “may” choose to exit their claim from the portal but this does not mean that they “must” do so. This case also demonstrates the importance of the parties complying with the overriding objective, cooperating with each other and having regard to proportionality and the need to avoid increased costs.

It is interesting to note that District Judge Campbell disagreed with one of his colleagues previous decisions where they held that a claimant had been reasonable for electing to exit their claim from the portal for non-payment of a DVLA fee. District Judge Campbell specifically noted that he had interpreted the rules slightly differently, which does question whether there is sufficient consistency in respect of the interpretation and application of portal rules. However, it should be noted that the facts of the case were slightly different.

Also, claimants may tactically look to exit claims from the portal in order to receive higher costs. In these cases, it is important to assess the reason(s) why a claim exited the portal and whether there was a specific sanction for non-compliance. It should be noted that where there is no specific sanction for non-compliance with a particular section of the protocol then the claim does not automatically exit for a failure to comply with that section; applying the findings of the court in the case of Patel v Fortis (2011).

It should be noted that this judgment referred to a very modest fee of £2.50, which the claimant knew had been agreed. As a result, although the courts have the discretion to assess whether a claimant was reasonable in exiting their claim from the portal where there is no specific sanction noted in the rules; the courts will take into account all of the circumstances to include proportionality, so if the fees owed are substantial it is more likely that the claimant’s exit from the portal will be seen as being reasonable.