By Martin Lancaster, Guildhall Chambers
There is currently considerable uncertainty as to how courts should determine the assessment of costs arising out of applications for pre-action disclosure for cases that fall out of the low value RTA or EL/PL portals.
Claimant solicitors will usually seek costs assessed on a standard basis for bringing an application for pre-action disclosure with a significant proportion of these applications being determined by District Judges without a hearing taking place. In contrast the fixed costs provisions under CPR45 allow only £125 or £250 for ‘interim applications’ depending on whether an oral hearing is required. This issue is potentially significant with hundreds if not thousands of applications made each year by Claimant solicitors seeking disclosure.
Anecdotal accounts suggest that some courts are operating their own uplifted fixed costs for pre-action disclosure allowing approximately £500 for an application for pre-action disclosure on cases that have commenced in the Portal but fallen out before resolution.
In the recent appeal in Davies v ASDA Stores Limited (2015) unreported, Martin Lanchester of Guildhall Chambers successfully argued that the first instance decision, to allow the Claimant’s costs to be assessed on the standard basis, should be overturned. In the appeal in the County Court at Bristol, the Designated Civil Judge HHJ Denyer QC decided that the correct approach was to allow the Claimant to recover the fixed costs in accordance with CPR 45.
CPR 46.1 establishes the principles of which party should pay for the costs of a pre-action disclosure application with the general position being the party seeking disclosure will pay the costs of the application. However because such applications are usually made when one party (regularly the Defendant) has been at fault in failing to comply with a pre-action protocol the provision in sub paragraph (3) regularly applies and the defaulting party will be required to pay the costs of the application. The rule is silent as to how any costs should be assessed.
Part 45 IIIA “Claims Which No Longer Continue Under the RTA or EL/PL Pre-Action Protocols – Fixed Recoverable Cost” was included within Part 45 in 2013 (in force from 31/7/13) to deal with cases that no longer continue under the low value RTA and EL/PL Pre-Action Protocols. The clear aim of the provisions was to limit the costs recoverable in these cases despite the fact that they have left the pre-action protocol portal and to allow the costs to become more predictable.
In relation to Pre-Action Disclosure applications two paragraphs within Part 45 are of relevance. 45.29A sets the scope and interpretation for claims that were within the protocols but do not continue and 45.29H, which limits the costs that can be recovered for 'interim applications'. These costs are half of the applicable Type A and Type B costs in table 6 or 6A within Part 45 which are currently £250 each.
The central question arises as to whether Pre-Action Disclosure applications for cases that start in the Portal but fall outside it, are ‘Interim Hearings’ for the purposes of Part 45. The Rules do not provide a definition of the term although CPR Part 25 does include, amongst the list of 'Interim Remedies', applications for pre-action disclosure.
Claimant solicitors seeking to recover costs on the standard basis routinely argue that a pre-action disclosure hearing is not an interim hearing for the purposes of CPR45.29H. The argument is that CPR46.1 sets its own discrete provisions for costs for pre-action disclosure. Further, the minutes of the Rules Committee do not make any specific reference to CPR45.29H applying to pre-action disclosure and the other ‘interim remedies’ referred to within CPR 25, such as freezing injunctions, could not have been intended to have fixed fees applied to them and so therefore neither should applications for pre-action disclosure.
Finally, Claimant solicitors point to the fact that if the fixed costs were applied there would be no costs deterrent for Defendants to provide timely and complete disclosure as required by the pre-action protocol.
The contrary arguments focus on the minutes of the Rules Committee which clearly show that there was an intention to restrict recoverable costs for low value PI and EL/PL cases. Furthermore there can be little doubt that using the ordinary language of the CPR applications for pre-action disclosure are ‘interim applications'. Some support for this is gathered from Mary Conaughton v Imperial College Healthcare NHS Trust1 where Master Haworth considered whether an application for PAD was included within the scope of a Claimant’s CFA. At para 28, he concluded that applications for PAD were 'interim orders' in accordance with Part 25 CPR:
“28. In my judgment, although the scope of the agreement does not specifically include applications to pre-action disclosure, neither does it exclude them. The fact is that applications for PAD are interim orders in accordance with Part 25 CPR, and I am persuaded by the reference in the CFA to "appeals from interim orders" being included within its scope as an indication that by analogy an application for a PAD is also included within the definition of "your claim".
The Recent Decision
In Davies v ASDA HHJ Denyer QC ruled that the fixed costs should apply, accepting the Defendant's arguments in full. In particular the Judge accepted that the new provisions were intended to restrict costs and that the term 'interim hearings' must logically apply to applications for pre-action disclosure. Having given his decision the Judge expressed his own view that further guidance should be given on this point and gave the Claimant leave to appeal. However it would appear that no appeal has been brought.
Reports from solicitors who are regularly seeking or defending applications for costs arising out of this type of case suggest there is currently no fixed judicial view as to which rules should apply and it is a point that will need to be resolved at some stage by a higher court to avoid the need for this point to be raised after every application is made.
The view of the author is that whilst it is potentially harsh on Claimant solicitors to face very restricted costs that arise directly from Defendant’s breaches of the pre-action protocol, fixed costs were intended to keep costs under control and the provisions do have the advantage of giving parties a predictable outcome in relation to costs for these types of applications.
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1  EWHC 09173 (costs)