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Claimant limited to portal costs following unreasonable exit from portal

DWF has successfully restricted a claimant to fixed portal costs following a premature decision to remove the claim from the MoJ portal. Sukhjit Dhadwal, who represented the defendant Local Authority in relation to the costs issues in the claim, outlines the findings.

At a glance

  • The claimant (a minor) suffered an injury in the school playground.
  • The Local Authority admitted liability in the MoJ Portal, but reserved their rights on causation.
  • The claimant's solicitors removed the claim from the portal on the basis that the defendant's position on causation had been reserved.

Master Haworth in the SCCO held that the claimant should not have removed the claim from the portal, as the defendant had a clear intention to compensate the claimant following its negligence

Background

The claimant in this matter suffered a cut lip and broken milk teeth following a fall in the school playground. Subsequently, the claimant retained solicitors who sent a CNF to the defendant on 13 July 2015. On 21 August 2015, within the required portal deadline, the defendant admitted liability in the portal.

The defendant followed up this admission with correspondence dated 18 November 2015 reiterating the admission of primary liability, “subject to causation”. The claimant promptly notified the defendant that the claim would be removed from the MoJ Portal. The defendant clarified its position explaining that causation was not being denied but that medical evidence was needed before an offer could be made, and invited the claimant's medical evidence in order to make offers to settle.

The claimant's claim was compromised in the sum of £2,500 following approval from the court. The claimant's solicitor proceeded to serve a bill in the sum of £7,097.92 on the basis that they believed they were entitled to recover costs as the claim had correctly exited the MoJ Portal.

In points of dispute, we argued on behalf of the defendant, that the claimant had been unreasonable in removing the claim, on the basis that an admission of liability had been made and the defendant had a clear intention to compensate the claimant in damages.

We also raised the point that the conduct of the defendant was not inconsistent with the definitions as specified in paragraph 1.1 of the Pre-Action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims:

1.1 In this Protocol

(1) ‘admission of liability’ means the defendant admits that

(a) the breach of duty occurred;

(b) the defendant thereby caused some loss to the claimant, the nature and extent of which is not admitted; and

(c) …

Subsection (b) allows the defendant to raise causation and this is also consistent with the admissions made in the CNF response. At provisional assessment stage, the SCCO found in favour of our arguments. However, this led to the claimant requesting an oral hearing.

The oral hearing took place in front of Costs Officer Martin, as he had provisionally assessed the bill. At the hearing, Costs Officer Martin felt compelled to reverse his decision on the basis that allegations made with regard to causation amounted to the defendant not admitting any loss. The defendant's expressed intention to compensate was not considered relevant by the costs judge, so we sought instructions from the defendant to appeal this decision and request a rehearing on the point of principle.

Findings

Master Haworth of the Senior Courts Costs Office agreed with the defendant's submissions andoverturned Costs Officer Martin's decision. The claimant's costs were assessed in the sum of £2,941, with the defendant awarded costs of the assessment.

The claimant's solicitors had been quick to remove the claim from the portal where there was a perceived doubt as to the defendant's intentions in the correspondence outlining that causation was an issue.

The Master accepted our submission that the defendant should not be precluded from raising medical causation (i.e. the extent of any injuries, as opposed to whether any injury was caused at all) as an issue.  

Master Haworth held that the claimant had 'jumped the gun' by taking steps to remove the claim from the MoJ Portal. If there was a doubt as to whether the defendant was arguing that no injury had been caused by its admitted negligence, this could have been clarified before any further steps were taken. Master Haworth in his judgment, took the view that the overriding objective calls for cooperation between the parties. Once the claim had exited the portal, the defendant clarified its stance, which was that causation was not being wholly denied but that medical evidence was needed before an offer could be made.

Master Haworth was satisfied that the defendant had made clear to the claimant that a positive admission was made, medical causation was a live issue but the defendant's ultimate objective was to achieve settlement of the claim.

Following judgment, Master Haworth exercised his discretion and applied CPR 45.24 to reduce the claimant's costs to £2,941. This represented a 59% saving on the costs that were initially claimed.

Comment

The net effect of the Jackson reforms is a significant reduction in costs paid in cases which are subject to the EL/PL and RTA protocols. Given the limitations in costs that a party is able to recover, there is an obvious temptation to find ways of leaving the portal or exit a regime where fixed costs apply, in order to maximise recoverable costs. We are now becoming ever more familiar with certain claimant firms looking for ways to escape fixed costs. This case is an example of the courts being unwilling to accept conduct that is incompatible with the overriding objective of the Civil Procedure Rules.

Decisions such as these demonstrate that the court will penalise parties who do not act in good faith during the course of litigation. CPR 45.24 was deliberately drafted to catch claimants who decide to act against the relevant protocol. We are seeing more cases where CPR 45.24 is being applied due to poor conduct from the claimant. Where CPR 45.24 does not expressly apply (such as in cases that have settled pre litigation), the courts are able to exercise their general discretion on costs under CPR 44.2.

The crux of the success of the defendant in this matter lay squarely on the fact that an admission of primary liability had been made and there was no positive withdrawal of this. In the correspondence of 18 November 2015, where the defendant’s position on causation was reserved, the words 'look forward to settlement' were a clear indicator of the defendant's intentions, that the court was prepared to consider the correspondence as a whole and consider the matter in the context of that which had preceded it.

However, it is not unreasonable to suggest that any subsequent reference to causation risks being construed as a withdrawal from a full liability admission. Once an admission has been made in the protocol, there is no need to qualify the admission in correspondence. If the defendant wishes to withdraw an admission of causation later (i.e. after the stage two settlement pack with medical evidence has been served), the protocol explicitly provides for that step to be taken.

The Protocol says the following:

7.35 Within the initial consideration period (or any extension agreed under paragraph 7.33) the defendant must either accept the offer made by the claimant on the Stage 2 Settlement Pack Form or make a counter-offer using that form.

7.36 The claim will no longer continue under this Protocol where the defendant gives notice to the claimant within the initial consideration period (or any extension agreed under paragraph 7.33) that the defendant—

(a) considers that, if proceedings were started, the small claims track would be the normal track for that claim; or

(b) withdraws the admission of causation as defined in paragraph 1.1(1)(b).

There is nothing to prevent the defendant from reviewing medical evidence and then making an informed decision on causation. This would be a better time to take stock of the situation and consider how best to proceed.

Contact

For further information please contact Sukhjit Dhadwal on 020 7645 4132 or at Sukhjit.Dhadwal@dwf.law or Steven Dawson on 0113 261 6118 or Steven.Dawson@dwf.law  

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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