Qader v Esure Court of Appeal rules that fixed costs regime will not apply to claims allocated to the multi-track

Hot on the heels of the Court of Appeal’s decision in Bird -v- Acorn (also concerning the interpretation of the application of fixed costs rules under CPR Part 45 Section IIIA), the Court of Appeal has now handed down its judgment in the case of Qader and others -v- Esure Services Ltd [2016] EWCA Civ 1109.

The case related to a low value RTA claim which was commenced in the MOJ Portal, pursuant to the Pre-Action Protocol for Low Value Personal Injury Claims (ie for claims with a value of between £1,000 and £25,000).

Pursuant to CPR Part 26.6(4), the fast track is the usual track for claims with a value of between £1,000 and £25,000; as Briggs LJ comments in his judgment, ‘there is [therefore] an initial apparent symmetry between the scope of the Protocols and the fast track, in terms of the amount claimed.’

However, there are a number of situations in which claims properly commenced under the Protocol, but which subsequently exit the procedure to be pursued under CPR Part 7, are likely to be allocated to the multi-track, rather than the fast track. Such situations could include:

• cases which were initially valued at no more than £25,000, but have subsequently been re-valued at a higher level;
• cases in which there are claims in relation to vehicle related damage (which are excluded from the valuation of a claim for the purposes of the application of the Protocol); and
• cases which are correctly commenced in the Portal, but the defendant subsequently raises allegations of fraud or dishonesty.

As the Court of Appeal noted, ‘[a] problem arises because there is nothing in Part 45.29 which expressly limits the fixed costs regime applicable to cases started but no longer continuing under the relevant Protocol to fast track cases, or which excludes the fixed costs regime when a case is allocated to the multi-track’.

In this case, the Defendant contended that the language of CPR Part 45.29A and 45.29B unambiguously apply the fixed costs regimes to all cases which start within the relevant Protocols, notwithstanding that the claims may no longer continue under them.

The Court of Appeal accepted that the drafting of the rules by the Civil Procedure Rules Committee represented an ‘apparent failure to implement the continuing intention … to exclude multi-track cases from the fixed costs regime being enacted for cases leaving the RTA and EL / PL Protocols’.

Briggs LJ therefore ruled that: ‘The best way to give effect to that intention seems to me to be to add this phrase to Part 45.29B, after the reference to 45.29J: “… and for so long as the claim is not allocated to the multi-track…”’.

Whilst the decision appears to go against the unambiguous wording of the rules as drafted, the Court of Appeal’s decision does serve to align the apparent incongruity between the scope of the RTA Protocols, the appropriate tracks for personal injury litigation, and the relevant costs regime that is applicable.

Insurers should note that this case effectively removes arguments that fixed costs should apply where claims are allocated to the multi-track. Going forward, it will therefore be necessary to be well prepared for arguments in borderline cases (ie those close to the fast track value limit) about the appropriate track at the allocation stage.

We anticipate that there will be a greater incentive for claimants’ solicitors to contend for allocation to the multi-track in such borderline cases. Ideally, therefore, insurers will be in a position to serve evidence prior to allocation, to support the assertion that claims have a value of less than £25,000, or are otherwise suitable for allocation to the fast track.

It remains to be seen what approach will be taken by the Courts, and the willingness of judges to hear arguments about allocation to track at case management hearings.

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