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Published 10 agosto 2022
In a surprising decision, the Court of Appeal in Doyle v M&D Foundations & Building Services Ltd  EWCA Civ 927 have endorsed avoidance of fixed recoverable costs if parties agree a costs provision that refers to ‘detailed assessment’ in the absence of agreement. The decision serves as a warning to all personal injury lawyers dealing with cases within the scope of the personal injury low value protocols (portals) and is another reminder that very careful scrutiny needs to be undertaken when costs provisions are proposed in orders to settle cases.
By determining that the parties had contracted out of fixed costs, the claimant’s bill of costs was assessed in excess of the amount of fixed costs despite the fact that it was a claim that had started off in the personal injury portal and was clearly in scope of the fixed recoverable costs scheme that applied to such cases, with damages agreed at £5,000.
The defendant made a Part 36 offer to settle the claim in the sum of £5,000 three days before the Fast Track trial. The claimant responded by indicating that quantum could be agreed at £5,000 but the offer was not accepted due to the lateness of the offer and therefore an order would be needed to ‘finalise matters’. An order was therefore proposed and agreed that made no reference to Part 36 or fixed costs and provided for costs to be subject to detailed assessment if not agreed. In the circumstances, the parties were determined to have contracted out of fixed costs; the plain and ordinary interpretation of ‘costs being subject to detailed assessment if not agreed’ displaces the application of fixed costs.
Any agreement to pay costs on cases within scope of the personal injury portals need to be carefully considered. Paying parties needs to be wary of attempts to avoid fixed recoverable costs by proposing unnecessary orders or terms to settle cases. Three key points arise from this decision:
It is anticipated that cases within the scope of fixed recoverable costs will continue to expand, with the implementation to intermediate cases valued up to £100,000 expected next year. This case highlights the need to ensure the process for resolving disputed sums on fixed recoverable costs cases is clearly set-out, whether it be by detailed assessment or a different method. In the absence of certainty, there will be more cases where parties end up paying costs they did not expect.
For more information or advice, please contact one of our experts in our Costs Team.
+44(0)121 698 5322
Olugbenga Dansu, Jack Reynolds