Is Covid and the late acceptance of a Part 36 offer a good reason to depart from Fixed Costs?

Today we look at the case of Osuzuwa v Madiera whereby District Judge Moan, sitting at Coventry County Court considered the Claimant’s entitlement to costs.

The proceedings relate to a claim for personal injury which concluded on 13 January 2021 when the Defendant accepted the Claimant’s Part 36 offer (made on 13 December 2019).

It was agreed between the parties that this was a matter which would ordinarily fall within the fixed costs regime, pursuant to CPR, Part 45.  However, there was a dispute as to the costs which could be recovered for the two aborted trials.

In this matter, a trial was listed for 26 October 2020.  Unfortunately, on the 23 October 2020, the Claimant was advised that the Defendant’s Partner had tested positive for Covid and he was required to self-isolate.  An application was made to adjourn the trial which was heard by the Recorder on 26 October 2020.  The trial was adjourned and relisted for 14 January 2021.

On 13 January 2021, just a day before the trial was due to start, the Defendant confirmed acceptance of the Claimant’s earlier Part 36 offer.

The fees in dispute between the parties are the Claimant’s cancelled Counsel’s fees for both trials, interest that follows and latterly, solicitors profit costs.

As settlement was agreed by way of acceptance of a Part 36 offer, assessment of costs was said to be considered under CPR Part 36, rule 36.13.  District Judge Moan, considered the issues and held that they were bound by the decision in Hislop v Perde [2018] EWCA Civ 1726 which said 36.13 does not apply.  However, there was provision for the Claimant to apply for costs outside the fixed costs regime.  Pursuant to CPR Part 45.29J, if there are exceptional circumstances, the Court can consider a claim greater than the fixed costs amount.

Part 45.29I provides a list of disbursements that are recoverable but notably missing from the list is Counsel brief fees.

District Judge Moan held “What is included within that list is any other disbursement reasonably incurred due to a particular feature of the dispute and that is the provision that the Claimant asks me to hang my hat on in allowing the brief fees to be recoverable as a disbursement”.

District Judge Moan took the view that “if the disbursement was intended to cover Counsels brief fee it would have been included and the inclusion of a different fixed fee dependent on whether the trial has started or as to whether it has not, Table 6B, substantively and comprehensively determines the point.  If there had been an intention that an advocacy fee would be payable even though the trial had not started, then I would say that Table 6B would provide for that and it does not”.

District Judge Moan took the view that the only option to recover Counsel fee would be pursuant to CPR Part 45.29J, consideration was also given to the authority in Ferri v Gill {2019} EWHC 952 (QB).

Following consideration of Ferri v Gill and Hislop v Perde, late acceptance was not considered to be an exceptional circumstance to justify costs outside the fixed costs regime.  District Judge Moan held that late acceptance of a Part 36 offer is a regular occurrence and as such would not satisfy the criteria for exceptional circumstances.

Turning now to the first aborted trial in October 2020, it was acknowledged that Covid was an exceptional time but that does not mean it was an exceptional reason because not being able to come to Court through illness and not being able to participate remotely is something which we hear about all the time.

District Judge Moan acknowledged there was a difficult and unfortunate set of circumstances.  “Looking at the case as a whole it is not one that is exceptional, and so I am not able to apply the exception to the fixed costs regime in terms of Counsel’s fees or, indeed, Solicitor’s costs”.

The case is a reminder that CPR Part 45.29J remains a very high hurdle to overcome, particularly as a global pandemic does not constitute ‘exceptional’.  It is clear that each case will still need to considered on its own merit.

If you have a case which you think CPR Part 45.29J may apply, please don’t hesitate to contact the Paramount Legal Costs Litigation team.

If you have any questions regarding this summary, please do not hesitate to contact Emma Robson here