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Aurangzeb v Walker, Supreme Court Costs Office, 22 January 2009

12 October 2009
The issues

Costs – fixed recoverable costs regime – road traffic – infant – minor – basis of assessment of minor Claimant’s case settled for £500.00.

The facts

The Claimant, through his mother and litigation friend, brought proceedings in respect of a road traffic accident which occurred on the 28th August 2007, when he was 3 years and 7 months old. The injuries were minor and damages were agreed in the sum of £500.00. There was some confusion as to the exact terms of settlement. The Claimant made a Part 36 offer in the sum of £500.00 on the 3rd January 2009. On the 28th January 2008 the Claimant’s solicitors wrote to AXA Insurance, the insurers to the Defendant, to the effect that their client “accepts the offer in the sum of £500.00…in full and final settlement of his claim.”

Please note that this acceptance is subject to you paying our reasonable and proportionate costs which we have agreed to deal with on a predictable basis and subject to you paying both the settlement amount and our costs within the next 4 days.”

The costs were calculated at £1,822.19. On the 29th January 2009 a letter was sent to the Claimant’s solicitors by Mr Brookbanks of AXA, accepting a global offer made in the sum of £500.00 and agreeing “to pay your legally recoverable costs in this matter.” There was some confusion as to whether the letter was a response to the earlier letter but the parties and the Master must have crossed. The parties agreed to deal with the settlement by way of parental indemnity rather than by utilising the Part 8 procedure. The matter was transferred by agreement from the Peterborough County Court, where costs proceedings were commenced to the Supreme Court Costs Office where it came before the Master. The Defendant argued that although the case had never been allocated to a track, it would have been allocated to the Small Claims Track and in those circumstances the Claimant’s solicitors would be entitled only to costs recoverable under that regime. The Claimant argued that the solicitors were entitled to predictive costs because of the provisions of CPR 21.10 providing that a claim by a child, in order to be validly settled, had to be concluded by means of the Part 8 procedure.

The decision

The fixed recoverable costs regime did not apply because of CPR 45.7(2)(d).

Following the decision of His Honour Judge Stewart in Coles v Ketlik on appeal at the Liverpool County Court on the 30th June 2008, if the matter had been pursued by Part 8 under Rule 8(9) it would have been treated as allocated to the Multi Track and Part 26 would not therefore apply, including its costs regime. Costs would fall to be ordered under CPR 44.3; and assessed under CPR 44.4 on the standard basis. Following CPR 44.5 those costs would be allowed only if proportionately and reasonably incurred or were proportionate and reasonable in amount.

Had the claim been issued (other than for approval under Rule 21.10 or for costs only under 44.12(a)) then it would have been allocated to the Small Claims Track, there being no factors other than the fact that the Claimant was a child, in respect of which it could be said that the Small Claims Track was not the appropriate track. For that reason the costs allowable on Detailed Assessment should be limited to Small Claims Track amounts and the appropriate Order in such cases should be that there should be a Detailed Assessment of the Claimant’s costs on the basis of the small claims regime.

Applying that decision to these facts, even if the Part 8 procedure had been properly followed and the proposed settlement brought before a District Judge for approval, he would simply have ordered that the Claimant’s solicitor’s costs be assessed on the standard basis and those costs would have been assessed as if the claim had been brought under the small claims procedure.

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