The High Court has recently considered the issue of counsel's fee where a matter has exited the Claims Portal. The Defendant submitted that CPR 45.29I(2)(c) fixed the fee at £150 plus VAT when read with CPR 45.23B and Table 6A. The High Court, upholding the first instance decision, held that counsel's fee was not fixed at £150 + VAT in a case that left the EL/PL Protocol. Mrs Justice Lambert found that this would not lead to an absurd outcome, and CPR 45.23B and Table 6A do not apply to ex-Portal claims.
Finsbury Food Group PLC v Dover  EWHC 2176 (QB)
The Claimant suffered an injury whilst at work and brought a claim against the Defendant. He submitted a claim through the Claims Portal in compliance with the Pre-Action Protocol for Low Value Personal Injury ("the EL/PL Protocol"). As the Defendant failed to respond the claim fell out of the Portal and continued to proceed by way of the Pre-Action Protocol for Personal Injury Claims. Liability was later admitted and the claim settled for £70,000.
Costs were then determined. Counsel had advised the Claimant's representatives on the value of the claim in conference. The EL/PL Protocol states it is expected the Claimant's representative will be able to value the claim, although in some cases worth more than £10,000, additional advice from counsel may be reasonably justified to value the claim. Table 6A limits the amount a party can recover for this to £150 + VAT.
The Claimant claimed £650 + VAT for counsel's quantum advice. The Defendant argued it was limited to £150 + VAT. Master Brown found in favour of the Claimant and ruled that counsel's fee was not fixed.
Permission was granted for the Defendant to appeal to the High Court, as although Master Brown opined that an appeal would not have any real prospects of success he acknowledged that the Defendant's argument "may have the potential to apply to a significant number of cases".
The Defendant argued that fixing the costs in lower value litigation gives parties certainty as to the costs they may recover or have to pay if unsuccessful, it ensures that costs are proportionate, and removes further costs generating processes such as assessment. Leaving the quantum of counsel's advice outside the fixed costs regime would be inconsistent with the purposes of the scheme, and would lead to uncertainty and unpredictability for litigants, with the risk of satellite litigation.
Mrs Justice Lambert referred to paragraph 7.44(4) of the EL/PL Protocol which states "a sum equal to the Type C fixed costs to cover the cost of the advice."
Cross-referencing with Table 6A leads to the figure of £150 + VAT. The Claimant submitted that CPR Part 45 expressly fixes the cost of counsel's fee as a disbursement for claims which remain in the Protocol and settle at Stage 3, with no similar provision for claims which fall out of the Portal. Mrs Justice Lambert accepted the Claimant's "important point" that "had the drafter intended to fix the costs of legal advice for a claim outside the Protocol, then the drafter could easily have included a similar provision."
The judge accepted the Defendant's comments regarding the "underlying rationale of certainty and proportionality" of the fixed costs regime. However, claims exit the Portal for a number of reasons including the claim being revalued at more than the upper limit, liability disputes and allegations of contributory negligence. Mrs Justice Lambert stated it would be odd if the same fixed fee was recovered for a claim valued at £15,000 as one requiring considerably more expertise. There was "nothing absurd in the costs of such an advice on valuation not being fixed in those circumstances."
Mrs Justice Lambert concluded that she agreed with Master Brown's findings. CPR 45.23B and Table 6A apply to claims which settle at Stage 3 of the EL/PL Protocol and have no application to claims which have exited the EL/PL Protocol. Also, paragraphs 7.41 and 7.44 of the EL/PL Protocol were referring to settlements at Stage 2 and have no application to claims which were outside the Protocol. The Defendant's appeal was dismissed.
What can we learn?
- The judge acknowledged that although counsel fees may not be fixed in this instance, "the costs allowed will not be unchecked". In a positive note for defendants they remain "subject to assessment and may be reduced on assessment."
- The judge reiterated that even though 45.23B fixes the level of fees for claims which settle at Stage 3 this does not automatically mean the fee will be recovered. It is "plain that the fee will only be recovered where the advice is reasonably required to value the claim". Even within the fixed costs regime there is a basis for challenge which may require resolution by the costs judge.
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