Fixed costs for ‘fast track’ court cases involving claims up to £25,000 apply even when the settlement exceeds £25,000 the Court of Appeal has ruled.  The bar for ‘exceptional circumstances’ where higher costs can be awarded has been set at a very high level.

The court ruled that an injured cyclist and his solicitor could only recover fixed costs, despite the claim being settled for £42,000, well above the £25,000 limit for fast track cases.  The ruling provides useful guidance for claimants and defendants at a time when the government is planning to extend the fixed costs regime to further cases (See Brunel News May 2019).

The fixed costs regime is intended to provide claimants with access to justice, without the risk of facing ‘ruinous costs’ if they lose, and to prevent costs skewing decision making on weak claims.

The claimant was knocked from his bicycle by the defendant, suffering injuries.  An initial GP report suggested that he would fully recover within four months.  He appointed solicitors and started a claim in the fast track, which covers cases up to a value of £25,000.

The claimant’s injuries proved to be more serious, requiring corrective surgery to his shoulder and incurring loss of earnings.  He appointed new solicitors, who settled the claim for £42,000.  His solicitors applied for higher costs than the fixed costs limit, arguing that the case involved ‘exceptional circumstances’.

Master McCloud agreed that there were exceptional circumstances, allowing higher costs to be claimed.  The defendant successfully appealed against this ruling.  The judge, Mr Justice Stewart, ruled that the Master had erred by setting a ‘low bar’ for exceptionality and that she had considered the wrong ‘basket’ when deciding which cases with which to compare the claim.

This case will be welcomed by insurers, who would pick up many bills for higher costs if more cases are considered to be exceptional,” said James Burgoyne, Director – Claims & Technical, Brunel Professions.  “It is particularly pertinent with the fixed cost regime likely to be extended to a wider range of cases.

Reports have been published by Law Society Gazette and Kennedys.

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