No deemed costs order under CPR 36 in fixed costs cases (County Court)
On appeal, the Central London County Court has found that:
- Where costs under the fixed costs regime could not be agreed following the acceptance of a Part 36 offer within the relevant period, the appropriate procedure was to issue a Part 23 application (rather than using the detailed assessment procedure).
- It was not unreasonable for a claimant who was (or might have been) entitled to, but did not request, a fee remission to pass on the hearing fee to the defendant.
The decision is noteworthy because there was no previous appellate decision on either of these issues, and decisions at first instance were inconsistent (although this decision is still only County Court level).
The claimant (C) had accepted the defendant’s (D) Part 36 offer in an RTA claim and, under CPR 36.20, C was entitled to the fixed costs in Section IIIA of CPR 45. The parties agreed costs except the issue fee, which D questioned, contending that C was, or might have been, entitled to fee remission and it was not reasonable for him to have incurred it.
C issued a Part 23 application for an order that D pay the fee. DDJ Davies dismissed the application, finding that, where CPR 36.20 was engaged, a deemed costs order arose so that a dispute over recoverable disbursements could only be determined by serving a bill of costs and commencing detailed assessment proceedings. C appealed.
HHJ Lethem noted that CPR 36.20 created a regime in which the claimant was entitled to costs, and those costs were quantified using Tables 6B-6D. Since the costs were fixed, there was no need for an assessment of costs or prerequisite for a deemed costs order. Accordingly, he held that there was no deemed costs order made under CPR 36 in a fixed costs case, so a party seeking to invoke the court’s costs jurisdiction had to make a Part 23 application.
Regarding the court fee, HHJ Lethem considered several cases which held that the claimant could elect to make a claim against the tortfeasor rather than relying on alternative sources of funding (such as the state or insurance). He concluded that there were strong policy grounds for finding that it was not unreasonable for a claimant to preserve the public purse and direct the cost of wrongdoing onto the tortfeasor. Accordingly, he ordered D to pay the issue fee.
Case: Ivanov v Lubbe, CC (Central London) (17 January 2020) (HHJ Lethem).