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At a recent costs and case management hearing, it emerged that the Claimant had only filed and served the first summary page of her Precedent H believing that this was what she was required to do pursuant to paragraph 6 (c) of Practice Direction 3E, which provides that:
“In cases where a party’s budgeted costs do not exceed £25,000 or the value of the claim as stated on the claim form is less than £50,000, the parties must only use the first page of Precedent H”.
The value of the Claimant’s claim was less than £50,000.
Unbeknownst to the Claimant (by reason of a lacuna in the guidance provided in The White Book 2016), it appeared that CPR 3E PD 6 (c) only applied to cases issued after 6th April 2016. The old rules therefore applied and thus the Claimant was required to file and serve a full Precedent H.
The Defendant argued at the case management hearing that the Claimant had failed to file a budget for the purposes of Civil Procedure Rule 3.14 and thus the Claimant should be limited to court fees only or should be required to make an application for relief from sanctions.
The Deputy District Judge at first instance rejected that argument.
The Defendant appealed the Deputy District Judge’s case management decision on two grounds (the second ground concerning another unrelated aspect of the Judge’s case management decision).
On its first ground of appeal, the Defendant argued that the word “budget” in CPR 3.14 meant a budget, which complied with the civil procedure rules and practice directions. The Defendant argued that the Claimant had failed to file a budget complying with the relevant rules and practice directions and thus breached CPR 3.14 and that accordingly, the lower court was wrong not to visit upon the Claimant the sanction imposed therein.
This ground of appeal was unsuccessful.
Accepting the arguments made on behalf of the Claimant, the Judge on appeal ruled that the interpretation of the word “budget” in CPR 3.14 did not mean “a budget which fully complied with all civil procedure rules and practice directions”. The Judge considered that having regard to the complexity of the civil procedure rules and practice directions in terms of their form and content and having regard to the draconian sanction in CPR 3.14, it could not have been intended that any failure to comply with the rules would invalidate a budget.
The Judge stated that CPR 3.14 had a purposive and functional meaning. The sanction was to encourage parties to engage in the process and not to impose draconian sanctions in all cases of non-compliance with the rules.
The Judge considered that a budget within the meaning of CPR 3.14 could fairly be described as a “costs budget for a costs and case management conference not necessarily complying with all relevant rules.” He observed that the summary page of the Precedent H, which the Claimant had filed and served showed all the phase totals albeit not all of the detailed workings out, however this was regarded as sufficient in a small to medium case.
The Judge stated that while there was a breach of the requirement to file and serve a budget complying with the rules, it could not be said that there was no budget at all.
NB. Cassandra acted for the Claimant at both the first instance hearing and at the appeal hearing.
The Claimant brought a claim against the Defendant, represented by Cassandra, for personal injury (whiplash), loss and damage arising out of a road traffic accident. The claim was protected by the qualified one way costs shifting (QOWCS) regime (governed by Section II of CPR 44) and was subject to the fixed costs regime under Section IIIA of CPR 45.
The Defendant made a valid Part 36 offer to settle the Claimant’s claim on a 50/50 basis. The Claimant did not accept the offer.
At trial the claim was dismissed. The Defendant had therefore beaten its Part 36 offer.
The Defendant invited the court to visit upon the Claimant the costs consequences pursuant to CPR 36.17 as modified by CPR 36.21.
The Circuit Judge found that there was no jurisdiction within CPR 36.17 or CPR 36.21 for the qualified one way costs shifting rule to be disapplied in circumstances such as this where the Defendant had beaten its Part 36 offer.
The Judge stated that this was not a case where damages had been awarded (and thus the Defendant's costs could be offset against them). He stated that it was clear that QOWCS was intended to protect Claimants from having to pay adverse costs orders when they lost at trial save for in the circumstances referred at CPR 44.15 and 44.16. The Defendant, having beaten its Part 36 offer in a claim to which section IIIA of CPR 45 applied, was not an exception to QOWCS and there was no jurisdiction for the court to order the Claimant to pay the Defendant's costs in such a case.
This decision is a helpful reminder of the limited benefit of Part 36 offers in cases such as these. It is also a reminder that in cases such as these, a Defendant cannot use a valid Part 36 offer, to subvert the normal costs rule when it defeats a Claimant’s QOWCS-protected claim at trial.