Williams v Secretary of State for Business, Energy & Industrial Strategy  EWCA Civ 852
Although this was not a casualty claim it raises interesting points in respect of the costs that a claimant can recover if they have failed to comply with the relevant pre-action protocol.
In this case, the claimant brought a claim against the defendant for noise-induced hearing loss. The defendant made a Part 36 offer to settle the claim which was accepted before the claimant issued Part 7 proceedings.
The defendant argued that the claim should have been brought under the EL/PL protocol and its accompanying claims portal. The defendant submitted that the claimant had failed to follow the EL/PL protocol and was only entitled to fixed costs and disbursements in accordance with the protocol.
The defendant relied upon CPR, r. 45.24 which provides that the court may order a defendant to pay no more than fixed costs and disbursements where the claimant fails to comply or elects not to continue with the protocol process and starts Part 7 proceedings.
At first instance and on first appeal
The judge held that the claim should have been pursued under the EL/PL protocol and the claimant was only entitled to fixed costs and disbursements in accordance with the protocol as CPR, r. 45.24 applied.
This decision was appealed and it was held that the first judge had been wrong in the interpretation of CPR, r. 45.24. It was stated that CPR, r. 45.24 could not apply because the claimant had not started Part 7 proceedings.
The defendant appealed the decision arguing that the second judge had erred in concluding that the fixed costs regime envisaged by the protocol did not apply where the claim itself was settled before proceedings were started. The defendant also argued that the conduct provisions under CPR, Part 44 applied which meant that the claimant was only entitled to fixed costs under the protocol.
Court of Appeal decision
It was held that the claim should have been submitted in the portal for EL/PL claims. The claimant had argued that the claim was not submitted in the portal because at the beginning there were two defendants. However, the Court of Appeal agreed with the judge at first instance that if the claimant’s solicitors had received full instructions from the outset, they would have known that there were very weak prospects of success against a second defendant.
In respect of the costs position, the Court of Appeal made clear that the Part 36 regime is a self-contained procedural code for the making and acceptance of settlement offers. It was stated that the starting point upon the claimant accepting the defendant’s Part 36 offer was for them to be prima facie entitled to costs to be assessed outside of the fixed costs regime because the claim had not been pursued in accordance with the protocol.
The Court of Appeal held that CPR, r. 45.24 could not apply to this case because the claimant had not started proceedings under Part 7 and there had been no judgment.
The Court of Appeal held that paragraphs 2.1, 3.1 and 7.59 of the EL/PL protocol gave a clear indication that if a claim had unreasonably not been started under the protocol, the claimant could be limited to fixed costs under the protocol in accordance with the conduct provisions under CPR, Part 44.
It was held that in cases of this nature, which are not covered by CPR, r. 45.24, a defendant should make submissions in respect of conduct as soon as possible – ideally on the commencement of costs only proceedings under Part 8.
The Court of Appeal noted that the defendant could have made the position clearer in respect of costs when making their offer to the claimant. However, it was accepted that in these circumstances any qualifications to a Part 36 offer could arguably make the offer a Calderbank offer. Although it should be noted that the Court of Appeal accepted that this would have provided some costs protection to the defendant.
The defendant’s appeal was allowed on the basis that the EL/PL protocol should have been used and and was unreasonable that it had not been.As a result, the conduct provisions under Part 44 applied allowing the claimant to only recover fixed costs and disbursements.
What this means for you
There continues to be a lot of cases where claimants fail to comply or elect not to continue with the EL/PL protocol. In some of these cases, Part 7 proceedings may have been brought and judgment entered but in a lot of them the claimant may not have commenced Part 7 proceedings or judgment may not have been entered even if proceedings had been brought.
In these cases, CPR, r. 45.24 does not apply but this judgment shows that defendants can use the conduct provisions under Part 44 (namely CPR, r. 44.4(3) and CPR, r. 44.11) to argue that the claimant should only be entitled to fixed costs in accordance with the EL/PL protocol in circumstances where there has been an unreasonable failure to comply or unreasonable failure to continue to use the protocol process.
This case also indicates that it is now safe to make Part 36 offers in these types of cases but there should still be a level of caution in doing so. Paragraph 38 of this judgment provides that a defendant can make the costs position clear when making an offer to the claimant but any qualification(s) to a Part 36 offer could arguably make the offer a Calderbank offer instead of a Part 36 offer. However, it was specifically stated that making the costs position clear in an offer, even if it the offer arguably becomes a Calderbank offer, will afford costs protection to the party making the offer.