Supreme Court Costs Office
The Issues: The case involved a 3 year old child injured in a RTA. Damages of £500 were agreed pre-issue. The matter did not proceed to an infant settlement approval hearing, but instead the Defendant’s insurers were happy to pay damages in return for a parental indemnity. The costs could not be agreed. Should costs be paid in line with the small claims track, or did fixed predictable (RTA) costs apply?
Held: The Defendant argued that predictable costs could not apply, in accordance with CPR 45.7(2), because if the claim had been issued it would have been allocated to the small claims track. Further, if the matter had proceeded to an infant settlement approval hearing, by way of Part 8 proceedings, then costs would have been assessed on the standard basis with the Court being required to take into account CPR 44.4(2):
Where the amount of costs is to be assessed on the standard basis, the court will-
(a) only allow costs which are proportionate to the matters in issue; and
(b) resolve any doubt which it may have as to whether costs were reasonably incurred or reasonable and proportionate in amount in favour of the paying party
The Defendant argued that it could not be right that because proceedings were never issued a party can recover substantially more costs than would have been allowed if proceedings for the substantive claim had been issued and the case allocated to the small claims track.
Master Rogers agreed, making a finding that if the matter had proceeded to an infant settlement approval hearing, by way of Part 8 proceedings, then the Claimant’s solicitors’ costs would have been assessed on the standard basis, as if the case had been brought under the small claims procedure (para 47). Therefore costs were payable under the small claims regime.
Comment: Although there was no infant settlement approval hearing in this particular case, the judgment seems to make it clear that the same principles apply whether Part 8 proceedings are issued or not. If damages are agreed pre-issue below the small claims limit, then costs should be payable in line with the small claims fixed costs scheme, irrespective of whether the matter is unallocated (e.g. where payment is made by way of parental indemnity) or whether the matter has been allocated to the multi-track (because Part 8 proceedings have been issued).
NB: Decision re-affirmed in Dockerill & Healey, Macefield v Bakos and Tubridy v Sarwar (2012)