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September, 7, 2016
In a recent appeal hearing relating to a claim pursued via the RTA Claims Portal which proceeded to a Stage 3 hearing it was ruled that the claimant would not be awarded the court issue fee as they failed to beat the defendant’s Stage 2 offer.
This case was a typical road traffic accident pursued via the Claims Portal. At Stage 2 Horwich Farrelly offered £1,000 to settle the claim. The claimant did not accept and the matter proceeded to a Stage 3 hearing.
At the hearing the judge, having considered the medical report and listened to submissions from counsel, awarded general damages of £1,000. As the claimant failed to beat the defendant’s offer the defendant was awarded the Stage 3 costs.
The claimant’s solicitor then sought an order for payment of the medical report fee and the issue fee. The medical report fee was agreed and had previously been paid. However, we argued that the claimant should not be entitled to the issue fee on the basis that, had they accepted the initial offer, which had not been beaten, proceedings would not have been issued; therefore it was entirely inappropriate for the claimant to be awarded the issue fee. Nevertheless, an order was made for the defendant to pay the issue fee.
The Application & Appeal
We sought permission to appeal the order for disbursements that had been made at the initial hearing.
His Honour Judge Freedman, allowing the appeal, held it was “plain beyond doubt that the sole reason why the issue fee was incurred was because the claimant was dissatisfied with the offer of £1,000 [made at Stage 2 of the RTA Protocol process]”.
Finding for the defendant he set aside the previous order relating to payment of the issue fee.
This finding clarifies the recoverability of disbursements in Portal cases by a claimant who fails to beat a defendant’s offer.
Because of the relatively low costs penalties involved there has been an increasing trend for claimants to take a chance on challenging defendant offers at Stage 3 hearings in the hope of obtaining a more favourable outcome.
A claimant losing at Stage 3 is subject to CPR 45.26(b), which requires them to pay fixed costs to the defendant. Whilst this rule also refers to repayment of disbursements, the fact that these are at the court’s discretion (under CPR 45.19) has meant that defendants have still, on occasion, had to pay these where the claimant failed to beat their Stage 2 offer.
Whilst recognising the discretion of the court with regards to allowing disbursements, Judge Freedman commented on a point of principle “…it is illogical and irrational to allow the claimant to recover the costs of pursuing litigation in which she was not successful. Conversely, it is irrational and illogical to order a defendant to pay additional costs when, in fact, they have won…”