A recent county court appeal ruling, Holland v Zurich Insurance Company (UK) Limited, in which DAC Beachcroft Claims acted on behalf of the defendant, provides crucial clarity for insurers regarding the application of fixed recoverable costs (FRC) and the definition of a 'personal injury claim' when the personal injury (PI) element has already been settled.
Background
The case involved a road traffic accident where the claimant initially pursued a personal injury claim through the RTA small claims protocol, which was settled for £520. However, the claimant also advanced a claim for substantial "non-protocol vehicle costs" (credit hire, pre-accident vehicle value, recovery, and storage) that were not resolved through the portal, leading to court proceedings being issued.
The allocation issue
Initially, both parties proposed allocation to the new intermediate track based on the value of the claim (limited to £91,000). However, at the allocation hearing, the claimant's counsel argued that the new intermediate track rules did not apply because the claim had included a personal injury claim and the cause of action had arisen before October 1 2023. The Deputy District Judge ("DDJ") agreed, allocating the case to the multi-track. The defendant appealed against the allocation decision.
The appeal and key rulings
At the hearing of the appeal, the defendant was represented by David Fardy of 8 DAC Beachcroft Buildings (8DB), DAC Beachcroft's integrated barrister and advocacy service. He contended that the DDJ had erred in concluding that the intermediate track was unavailable and that this was a matter which could, and should, have been allocated to the intermediate track.
Agreeing with the submissions made on behalf of the defendant, His Honour Judge Graham Wood KC concluded that the DDJ had erred in law and allowed the appeal, allocating the case to the intermediate track.
The decision provides a number of notable takeaway points:
Definition of "personal injury claim" for transitional provisions
The appeal clarified that for the purposes of the transitional provisions of the Civil Procedure (Amendment No 2) Rules 2023, a "claim for personal injuries" only arises where proceedings have actually been commenced seeking an award of damages for PI. Since the PI element in this case had already been resolved by agreement before the proceedings were issued and there was no prayer for PI damages in the claim form or particulars of claim, it was not a personal injury claim within the meaning of the rules.
Procedural requirements for PI claims are crucial
Having considered the definition of 'personal injury' in Civil Procedure Rules (CPR) Rule 2 which states…
‘Claim for personal injuries’ means proceedings in which there is a claim for damages in respect of personal injuries to the claimant or any other person or in respect of a person’s death, and ‘personal injuries’ includes any disease and any impairment of a person’s physical or mental condition.
The judge considered the procedural requirements for personal injury claims, the judgment emphasising the importance of the same in determining whether a claim is a personal injury claim. The absence of a prayer for personal injury damages, a statement of value as mandated by CPR 16.3, and a medical report (as required by Practice Direction 16 PD.4) further solidified the court's view that a personal injury claim was not being pursued in these specific proceedings.
Distinction between damages
The court highlighted the clear distinction in CPR 26.9 between damages for pain, suffering, and loss of amenity (personal injury damages) and other heads of damages. The mere historical background of an injury does not automatically qualify all other claims as part of a personal injury claim.
Purpose of intermediate track and transitional provisions
The judgment reiterated that the introduction of the intermediate track in October 2023 aimed to bring a vast number of cases, particularly low-value RTA claims, into the fixed costs regime, reserving the multi-track for only the most serious and complex claims. The transitional provisions were designed to avoid injustice for existing PI claims, but this protection was deemed unnecessary for settled whiplash claims processed via the portal.
Implications for QOCS (qualified one-way costs shifting)
The claimant's argument regarding the loss of QOCS protection if the claim was not deemed a personal injury claim was also addressed. The court noted that where the residual claim primarily comprises non-protocol vehicle costs, it is "highly unlikely" that the claimant would be personally responsible for adverse costs, particularly if their legal advisors were pursuing recovery for the benefit of a credit hire company.
The importance of the decision
The decision of His Honour Judge Graham Wood KC allowing the defendant's appeal is a significant one for insurers, reinforcing the intent behind the new FRC rules and providing valuable clarification on how settled personal injury elements impact track allocation. It suggests that claims predominantly for non-protocol vehicle costs, even with a historical PI component, are likely to fall within the fixed costs regime if the PI claim is no longer actively being pursued within the live proceedings. The decision enhances defendants' ability to secure fixed recoverable costs, offering insurers greater cost certainty and control compared to multi-track cases.
If you would like to discuss this case further, please speak with your usual DAC Beachcroft Claims contact or a member of our Costs Team.
