The Law Of... being open to interpretation

Greg Cox, Partner and Head of Dispute Resolution at Simpson Millar, acted for one of the interveners - the Personal Injuries Bar Association – in the Qader v Esure [2016] EWCA Civ 1109 case at the Court of Appeal this morning.

The Court was asked to resolve a point open to interpretation, whilst answering a bigger question about the importance of fixed fees in future cases - for clients and lawyers alike.

Should Legal Costs Be Limited To Fixed Fees?

The Court had to decide whether a case that had started under the RTA protocol but was subsequently issued and allocated to multi-track should still be limited to fixed costs. Its ruling could have a significant bearing on future cases that undergo a similar transferral.

The types of cases that could be affected are:

  • Cases where the value increases from that anticipated at the very outset to above £25,000, for example where the Claimant's condition deteriorates or is worse than originally anticipated
  • A case that requires a trial lasting longer than one day or the deployment of multiple expert witnesses to do it justice, or,
  • There is an allegation of dishonest fabrication which, if proven, has serious consequences to a Claimant and requires 'no stone to be left unturned' in response

The Problem - The Rule Is Clearly Worded But Doesn't Reflect The Intention

The wording of the relevant Civil Procedure Rules (Part 45.29A and B), when taken together, appears unambiguously to apply the fixed costs regime to all cases which start within the relevant Protocols but no longer continue under them.

The extensive consideration of, and consultation on, the relevant rules does not appear to have contemplated this issue.

In other words, the Court of Appeal could not simply address the interpretation of the relevant rules as they stood (as the words were clear), but had to consider whether they suffer from an obvious drafting mistake which can be put right, bringing them into compatibility with the intention of the relevant legislator (in this case the Civil Procedure Rule Committee).

In exceptional cases, the Court has the power to do so, which was explained by Lord Nicholls in Inco Europe Limited v First Choice Distribution [2000] 1 WLR 586.

A Decision Is Made

Giving judgment of the Court, after some hesitation, Briggs LJ held that there was an obvious drafting mistake which could, and ought be, put right under the exceptional jurisdiction.

He held that section III A of Part 45 should be read as if the fixed costs regime that is prescribed for cases that start within the RTA Protocol should not be applied if the case is then allocated to multi-track.

The reasoning for such a decision was a careful analysis of the origins of the rule, Jackson LJ’s report, through the consultation process. The intention, so it was held, of the Rules Committee had not implemented the intended purpose of the fixed costs regime, which was that it should apply as widely as possible (and therefore to cases allocated to the fast track, and to cases sent for quantification of damages at disposal hearings), but not to cases where there had been a judicial determination that they should continue in the multi-track.

It was decisive, 

"that the fixed amounts recoverable were all based upon a table originally proposed by Jackson LJ and then amended after consultation, specifically chosen for fast track cases."

Reading the Rule 45 after Qader

The best way to give effect to the intention of the Rules Committee, it was held, was to add the phrase 

"...and for so long as the claim is not allocated to the multi-track..."

 to Part 45.29B, after the reference to 45.29J.

A Practice Point – Disposal Hearings

It is important to note that the Qader decision would only apply to cases which have actually been allocated to the multi-track.

Care needs to be taken in cases which started out life in the RTA or EL/PL protocol and are listed for disposal without allocation. If such a case is likely to exceed the fast track valuation, or should be allocated to multi-track for any other reason, then the parties should seek an order allocating the case, rather than simply proceeding with the disposal.

Qader followed hot on the heels of Bird v Acorn [2016] EWCA Civ 1096. In Bird, Briggs LJ again giving the leading judgment, the Court resolved a dispute about whether a disposal hearing was a 


 for the purpose of the fixed costs rules and held that it was, essentially meaning that a higher level of fixed costs was payable.

What Does The Judgment Mean For The Civil Procedure Rules Committee?

Greg comments:

"At first blush, Briggs LJ’s words, 'in the present case the Rule Committee’s apparent failure to implement the continuing intention of the Government, in response to stakeholder concerns', might appear to imply some criticism of the Committee - Briggs LJ is himself an ex officio member of the committee."

"Given that clever lawyers (on all sides) pore over these rules looking for some advantage, it is no surprise that the Court of Appeal will be called upon to resolve issues from time to time, though it is surprising, first that the error here was so plain and, second, that it was not put right earlier as the point has been a live one for some time. The process and procedure for the Rules Committee to look at such points in future may have to be considered."

"Of course, the Rules Committee would not ordinarily have been able to correct the rule with retrospective effect which is one benefit of the Court of Appeal dealing with the point."

Looking To The Future

Credit must be given to the Claimant's team (Alan Nesbit at Nesbit Law Group and Nicholas Bacon QC) and Rob Weir QC for PIBA.

A coherent and workable framework for fixed costs rules will become even more important if, as appears likely, there is going to be further extension into higher value cases and into other areas of civil litigation following the conclusion of the latest Jackson LJ review, the terms of reference of which are: 

"to develop proposals for extending the present civil fixed recoverable costs regime in England and Wales so as to make the costs of going to court more certain, transparent and proportionate for litigants" and "to consider the types and areas of litigation in which such costs should be extended, and the value of claims to which such a regime should apply".

Sir Rupert has, of course, already signalled his views in the January 2016 speech.

In the meantime, the Court of Appeal is likely to continue to be called upon to periodically rule on the boundaries of the current fixed costs schemes.

Greg said:

"This a brave but common sense decision to correct an obvious error."

"There was never any intention to apply the fixed costs rules to cases allocated to the multi-track, as the point had simply not featured in the process leading up to the rule at all."

"As we see the proposed extension to fixed costs now being consulted upon, arguments about the boundaries of any scheme are likely to become more prevalent until the schemes settle down."