Escaping Fixed Recoverable Costs in Low Value Personal Injury Claims
I’ve been asked to comment on the decision in Alan Ryan v Karl Hackett (2020) EWHC 288 (QB), although the topic of escaping fixed recoverable costs in personal injury claims is in fact much wider and so I’ll provide the reader with some other guidance too.
Firstly, the obvious question – why would any Solicitor and their client wish to try and avoid, or escape, the fixed recoverable costs in low value personal injury claims? Surely any reasonable Solicitor and their client should be only too happy to accept those costs and benefit from being paid straightaway! Of course, I’m being facetious – those fixed costs were never enough, they have already been eroded by inflation and many claims simply require more work than the fixed costs provide for.
In Alan Ryan v Karl Hackett (2020) EWHC 288 (QB) the Claimant exited the low value Portal in an RTA claim when he shouldn’t have done, although his claim would probably have exited that Portal in any event when the level of damages increased above the applicable threshold as the claim progressed. At the detailed assessment stage, the Defendant tried to argue that costs should be limited to the fixed recoverable costs, or at least reduced down to the same amount on the basis of CPR r44.11 (misconduct). The Master at detailed assessment was not with the Defendant and neither was Stewart J at the appeal.
The case of Ryan v Hackett highlights the difficulties created by the Low Value Protocols, and associated fixed costs regimes, for Receiving Party’s Solicitors by the need to try and estimate likely damages at the outset of a matter. In such cases it is much easier to proceed outside of the Portal to start with (avoiding fixed costs), on the basis that the claim might well exceed £25,000.00 damages, and then concede to fixed recoverable costs at the conclusion of the claim if you wish, than it is to try and recover conventional costs in a £25,000.00+ damages claim after the matter has proceeded through the Portal (see Qader v Esure (2016) EWCA Civ 1109).
The other way to avoid fixed recoverable costs in personal injury claims is to contract out of that costs regime at the point of settlement (See Ho v Adelekun (2019) EWCA Civ 1988). In other words, the Claimant stipulates in their written settlement offer that conventional costs (i.e. costs to be assessed by the Court on the basis of the amount of time reasonably spent plus disbursements/ standard basis) will also be payable in the event of acceptance of the offer made.
In summary, avoid fixed recoverable costs by (1) not entering your claims onto the Portal in the first place if you have any reason to believe that the damages might reach or exceed £25,000.00 and (2) make efforts to settle all such claims on the basis that conventional costs will be payable.
If you need any help with such matters, please get in touch.
12th March 2020