Jackson v Barfoot Farms (unreported), Canterbury County Court
The above unreported decision has come to light which highlights flaws in the changes to CPR 45.29 brought about by The Civil Procedure (Amendment) Rules 2017; those changes being, that the words “but not more than £25,000.00” are removed throughout the CPR 45.29 fixed costs tables The rules with specific regard to CPR 45.29 gave statutory force to the Court of Appeal’s decision in Qader & Others v Esure Ltd & Khan v McGee [2016] EWCA Civ 1109
The effects of these changes are that, more complex lower value claims which begin in the MOJ portal and are subsequently allocated to the Multi Track escape the fixed costs regime, and attract ‘standard’ costs. However cases such as this, which despite clearly exceeding the initial upper limit of £25,000.00 specified in the Pre-Action Protocols, will be restricted to fixed costs specified in CPR 45.29 if they settle pre allocation. This is as a result of the upper limit has been removed for cases exiting the portal, and settling pre allocation. This potential restriction to fixed costs can of course be avoided if a case is identified as exceeding the ‘upper limit’ of £25,000.00 at the outset, and is not placed onto the MOJ portal.
The reason the case exited the MOJ portal in this instance, was due to the fact the claim exceeded the upper limit value, However It is unknown at this stage whether the initial value of the case was in excess of £25,000.00, or whether the claim increased in value as the case progressed.
Realistically, it is somewhat unfair that a case that starts life in the portal with an upper limit of £25,000.00, then exits due to exceeding this limit or by another reason, falls into a further fixed costs regime which would not have happened had the matter been commenced by way of a letter of claim.
Nonetheless, the decision serves as a warning to Solicitors that the initial evaluation of cases is becoming more and more crucial since the rule changes. Whilst the Solicitors in this instance will have received a handsome sum in respect of FRC, firms running cases with lower settlement values will not benefit from such significant fixed costs calculations, and may be left out of pocket owing to a failure to properly assess the file at the outset.
Whilst it is unclear whether an appeal will be lodged in this case, or an application was made on the ground of ‘exceptional circumstances’ pursuant to CPR 45.29J and fell short, I am sure that this is not the last we have heard of this situation. It is certainly a point of interest as case law develops in this area and shows examples of the extremities that can occur due to the way in which the rules were amended. The issues is sure to arise again where hopefully a more binding position will materialise.
In the meantime, should you have any indication that a matter is to exceed the pre action protocol ‘upper limit’ then it is better to avoid placing the matter onto the portal and exposing yourself to fixed recoverable costs, should there be an early settlement.
Whilst this approach is not without risk, file handlers should be mindful of running such cases outside the portal where the court may take a different view and restrict to portal costs (CPR 45.24 refers). By taking great care over a reasonable decision not to enter a case into the portal with a reasonable belief that the case may be borderline may go some way to legitimately avoiding the pitfalls that this case potentially highlights on those matters that will not reap the benefits of the fixed recoverable costs ratio to damages in the instant matter.