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COURT OF APPEAL: FIXED INTERIM APPLICATION COSTS APPLY TO PAD APPLICATIONS



Wed 1 February 2017

The Court of Appeal has confirmed that fixed interim application costs under CPR 45.29H apply to pre-action disclosure (‘PAD’) applications in claims that have exited the EL/PL Protocol.

Briggs LJ, with whom Irwin and Jackson LJJ agreed, gave the judgment in Sharp v Leeds City Council [2017] EWCA Civ 33. He went so far as to say that ‘the fixed costs regime plainly applies to the costs of a PAD application’. The claimants had argued that the costs of such application should be assessed on the standard basis.

The judgment accords with circuit level decisions on the point, including our own appeals in Mills v Farmfoods and Salter v Muller.

The fixed interim application costs under CPR 45.29H are £125 plus VAT and court fee when there is no hearing, and £250 plus VAT and court fee when there is.

The Court of Appeal left the door open for exceptional circumstances arguments for greater costs, particularly for very poor conduct by the defendant, and also suggested that if the fixed costs were unreasonably low that may be a matter for review in due course. That may feed into Jackson LJ’s Fixed Costs Review. The judgment comments also on the risk of costs-building satellite litigation. The fact that fixed costs will ordinarily apply will discourage unnecessary or premature applications.

The various circuit level decisions had already reduced the frequency of PAD applications and disputes over costs over 2016, and the Court of Appeal judgment is unlikely to result in much practical change.

This is the third Court of Appeal decision on CPR 45 Section IIIA in three months. Bird v Acorn Group saw an interpretation of the stages that led to more generous results for claimants; Qader v Esure, by excluding multi-track allocated claims, potentially gave claimants more generous costs; whereas Sharp gives less generous costs to claimants. The familiar clichés apply, and were expressed in the judgment: ‘The fixed costs regime inevitably contains swings and roundabouts, and lawyers who assist claimants by participating in it are accustomed to taking the rough with the smooth, in pursuing legal business which is profitable overall.’

The result is unsurprising, and is redolent of earlier judgments such as Solomon v Cromwell Group, where the possibility that fixed costs may not apply was held to give way to the certainty that they did, particularly where there was no clear policy reason or intention that it should be otherwise.


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