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How to resolve Disputed Disbursements in Fixed Costs Cases

The recent judgments in Nema -v- Kirkland [2019] and Ivanov -v-v Lubbe [2020] provided some clarification on recoverability of costs in certain types of fixed costs cases which have exited the portal. Our Susie Power, Costs Consultant, takes a look.

Nema -v- Kirkland [2019] was a Fixed Costs RTA case, commencing in 2017, which exited the portal and proceedings were issued. The Claimant accepted the Defendant’s Part 36 Offer on 25 July 2018. A fixed costs schedule was served with reference to Section IIIA of CPR 45. The Defendant returned to the Claimant stating that Counsel’s fees and the engineer’s photograph fees were disputed, in the sum of £564.00. Shortly thereafter, on 20 September 2018, the Defendant sent a cheque for the remaining total of the Schedule citing it was in full and final settlement. However, the Claimant had, on 18 September 2018, already served a Notice of Commencement of detailed assessment proceedings in order to recover the disputed fees. This had resulted in increased costs for preparation of the Bill of Costs.

The rules in play for this particular case, which will not be rehearsed here, are CPR 36.13-36.14, 36.20, 44.1(1), 44.6, 44.9 45.29A-45.29C, 45.29H-45.29J and Practice Direction 44.

In short, it had to be determined whether the case warranted detailed assessed proceedings or a court order under CPR36.13 and 36.20 in order to resolve the disputed fees. Master Leonard heard submissions from both parties and ruled that detailed assessment proceedings were disproportionate to the sums claimed, usually for non-fixed disbursements, and as such an application should be made under CPR36.20.

Following on from the ruling in Nema, the case of Ivanov -v- Lubbe [2020] sought to make an application under Part 23, as envisaged by CPR 36.20, for a disputed issue fee. The circumstances are similar to Nema in that the case was a RTA portal case, issued under Part 7 due to exiting the portal.

Lethem DJ considered the CPR and ruled that the appellant had applied the CPR correctly by filing a Part 23 application to recover the issue fee. It was stated that upon consideration of a brief application, which should include two paragraphs: one requesting a costs order and the second detailing the sums sought. The court’s discretion was then to be utilised in determining whether the costs could be summarily assessed or required detailed assessment proceedings. Proportionality to the sums sought would be considered by the court. The appellant was successful in recovering the issue fee.

So, what did we learn from these cases?

1. Consider whether your case falls within the scope of Fixed Costs for the purposes of costs. Has it been allocated to the Multi-Track, following it exiting the portal, in line with Qadar thereby relinquishing the ‘fixed costs’ argument.
2. Consider whether your outstanding disbursements have been incurred reasonably, and under the guise of CPR 45.29I.
3. Consider how the case was settled? Does your client have the ability to utilise CPR 36.20.
4. Consider whether it is feasible, and commercially viable, to pursue the outstanding disbursements under a CPR 36.20 application.

Should you have any queries regarding potential outstanding disbursements and applications under CPR 36.20, contact PIC today and we will be happy to help.

Susie Power  | Costs Consultant | Partners In Costs Ltd
Email: susie.power@pic.legal

30.04.2020