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Spotlight: Mendes v Hochtief (UK) Construction Ltd [2016] EWHC 976 (QB)

17 May 2016

Mr Justice Coulson has ruled that a claimant could recover trial advocacy fees under CPR 45 when a claim settled on the day of the hearing, before the trial was heard. Cait Sweeney, previously a legal researcher working in the areas of civil procedure and personal injury and now a pupil at St Philips Chambers, explains.

What’s happened?

The claimant suffered personal injuries after a motorcycle accident. A claim was started under the RTA Protocol, but the defendant denied liability and the claim exited the portal process. As a result, the costs of the claim were governed by the fixed costs regime in part IIIA of CPR 45.

The matter proceeded to trial and both parties were represented by counsel. Following discussions, the claim was settled on the morning of the trial. The judge was invited to assess costs in accordance with Part IIIA. The claimant received £2,655 and 20 per cent of the damages, but the judge refused to award the fixed trial advocacy fee on the basis that as the case was settled before the final contested hearing, no such sum was recoverable.

The claimant appealed the ruling relating to the trial advocacy fee.

Why is it important? 

Following this judgment, it is clear that the trial advocacy fee is recoverable under the fixed costs regime if a case settles on the day of the trial, but before the trial actually commences.

How does this fit into existing law and practice?

In the cases where part IIIA is applicable, the only costs allowed are the fixed costs in rule 45.29C and the disbursements listed in rule 45.29I.

Rule 45.29C provides that:

‘(1) Subject to paragraph (2), the amount of fixed costs is set out in Table 6B.

(2) Where the claimant -

(a) lives or works in an area set out in Practice Direction 45; and

(b) instructs a legal representative who practises in that area,

the fixed costs will include, in addition to the costs set out in Table 6B, an amount equal to 12.5 per cent of the costs allowable under paragraph (1) and set out in Table 6B.

(3) Where appropriate, VAT may be recovered in addition to the amount of fixed recoverable costs and any reference in this Section to fixed costs is a reference to those costs net of VAT.

(4) In Table 6B -

(a) in Part B, ‘on or after’ means the period beginning on the date on which the court respectively -

(i) issues the claim;

(ii) allocates the claim under Part 26; or

(iii) lists the claim for trial; and

(b) unless stated otherwise, a reference to ‘damages’ means agreed damages; and

(c) a reference to ‘trial’ is a reference to the final contested hearing.

TABLE 6B

Fixed costs where a claim no longer continues under the RTA Protocol

A. If Parties reach a settlement prior to the claimant issuing proceedings under Part 7

Agreed damages

At least £1,000, but not more than £5,000

More than £5,000, but not more than £10,000

More than £10,000, but not more than £25,000

 

Fixed costs

The greater of -

(a) £550; or

(b) the total of -

(i) £100; and

(ii) 20 per cent of the damages

The total of -

(a) £1,100; and

(b) 15 per cent of damages over £5,000

The total of -

(a) £1,930; and

(b) 10 per cent of damages over £10,000

 

B. If proceedings are issued under Part 7, but the case settles before trial

Stage at which case is settled

On or after the date of issue, but prior to the date of allocation under Part 26

On or after the date of allocation under Part 26, but prior to the date of listing

On or after the date of listing but prior the date of trial

 

Fixed costs

The total of -

(a) £1,160; and

(b) 20 per cent of the damages

The total of -

(a) £1,880; and

(b) 20 per cent of the damages

The total of -

(a) £2,655; and

(b) 20 per cent of the damages

 

C. If the claim is disposed of at trial

Fixed costs

The total of -

(a) £2,655; and

(b) 20 per cent of the damages agreed or awarded; and

(c) the relevant trial advocacy fee

D. Trial advocacy fees

Damages agreed or awarded

Not more than £3,000

More than £3,000, but not more than £10,000

More than £10,000, but not more than £15,000

More than £15,000

Trial advocacy fee

£500

£710

£1,070

£1,705

The defendant contended the following.

  • The trial advocacy fee was only recoverable if the trial had actually commenced. The costs in this case should be assessed under section B of table 6B.
  • This element of the fee is for trial ‘advocacy’ which did not occur, so it cannot be recoverable.
  • The approach contended for by the defendant had certainty and the claimant’s argument would lead to counsel ‘skimming off’ the trial advocacy fee when it was not properly recoverable.

The claimant argued the following.

  • Section B of table 6B was inapplicable as the case had not settled ‘before the date of the trial’. The court had to deal with the costs under section C. The claim had been disposed of at trial and the trial advocacy fee was recoverable.
  • If neither section B nor C applied, nothing at all would be recoverable if the case settled on the date of the trial but before the commencement of the hearing. This would mean that there was a lacuna in the rules.
  • It would be counter-productive if the rules were interpreted to mean that the advocate would lose out of the case settled on the day of the trial, which itself would have a negative effect on the number of settlements.

How does this affect practitioners?

Mendes brings further clarity to the fixed costs regime. As highlighted by Mr Justice Coulson, the intention of a fixed recoverable costs regime was to provide an agreed scheme of recovery which was certain and easily calculated. If the intention had been to use the last column in section B of table 6B to cover all costs up to the commencement of the final contested hearing itself, and not just the date of that hearing, then that could easily have been stated. It did not strain the language of the rule to conclude that this was a case where the claim was ‘disposed of at trial’, albeit by way of settlement rather than judgment.

What should I be doing differently as a result?

  • The issue of settlement should be considered continuously as cases progress.
  • It is now clear that a party cannot escape the additional trial advocacy fee if a case settles on the day of the trial.