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Tibbles v SIG Plc, Court of Appeal, 26 April 2012

8 May 2012
The issues

Costs – allocation – re-allocation – small claims track

The facts

Mr Tibbles had a claim for personal injury arising out of an accident at work. It was a low value claim. A claim form was issued on 28 May 2008 claiming damages in excess of £1,000. At allocation both sides contended that the matter should be heard on the fast track, the District Judge made an order without a hearing allocating the claim to the small claims track and disregarding the solicitors agreed directions. The claimant applied to set aside the order and the defendant wrote to the court to say that it did not object. The judge who had indicated that he was not minded to set aside his order re-allocated the claim to the fast track. Neither the judge nor the parties made reference to the default operation of CPR 44.11 whereby costs incurred prior to re-allocation would fall to be dealt with under the small claims track rules. Neither party directed the District Judges attention to the costs Practice Directions 16.1 requiring the court before making an order to reallocate to decide whether any party was to pay costs to any other down to the date of the order to reallocate in accordance with the small claims track rules. At trial, the judge found for the claimant awarding him £750.00 being £1,500 less a 50% reduction for contributory negligence. The defendant was ordered to pay the claimants costs of the standard basis, to be the subject of detailed assessment if not agreed.

It ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation

The defendant points of dispute took issue with the claimants claim for costs prior to reallocation, maintaining that they were subject to the restrictive special rules relating to the small claims track. Approximately £20,000 was in issue. The claimant’s solicitors thereafter applied under CPR 3.1(7) or alternatively under the slip rule in CPR 40.12 to vary the order reallocating by adding “the costs incurred prior to today are to be treated as costs in the fast track”.

The matter came before the District Judge who acceded to the request to vary, taking the view that he had both jurisdiction to vary and that in his discretion exercised retrospectively he ought to vary his earlier order.

The matter was appealed to the judge who reversed the District Judge’s decision. The matter was appealed to the Court of Appeal.

The decision

The previous cases allowed the following conclusions to be drawn:

  • the rule in CPR 3.1.7 was broad and unfettered. However, considerations of finality, the undesirability of allowing litigants to have two bites at the cherry, and the need to avoid undermining the concept of appeal, pushed towards a principled curtailment of an otherwise apparently open discretion
  • although the cases warned against trying to exhaustively define the circumstances in which that discretion might arise, it would normally arise (a) where there had been a material change of circumstance since the order was made or (b) where the facts of which the original decision were made were innocently or otherwise misstated
  • such a statement of those primary circumstances should not be viewed as if it were a statute
  • there was room for debate as to whether and to what extent misstatement might include an omission as well as positive misstatement or concern argument as distinct from fact. This debate was ultimately to be a matter for the exercise of discretion in the circumstances of each case
  • questions might arise as to whether the misstatement or omission was conscience or unconscious and whether the facts or arguments were known or unknown, knowable or unknowledgeable. These were also matters going to discretion. Where however the facts or arguments were known or ought to have been know as at the time of the original order, it was unlikely that the order would be revisited and that had to be more strongly the case where the decision not the mention them was conscience or deliberate.

Generally the successful invocation of the rule would be rare. It ought normally to take something out of the ordinary to lead to variation or revocation of an order, especially in the absence of a change of circumstances in an interlocutory situation. In this case, had the request to vary been made promptly, variation would have been permissible. In fact, there was very long delay in making the application to vary. Critically the delay extended over the time when the case was tried and final judgment was given. Secondly, prejudice to the respondent was caused by the failure to seek variation promptly and to delay the application for so long. The respondent faced a claim for £20,000 in circumstances where without a variation none of those costs would have been recoverable. It had had to face and finance drawn out proceedings involving three court hearings and two appeals in respect of the matter. The District Judge had been wrong to say that the respondent had suffered no prejudice and the judge had been equally wrong to express regret at the decision to which he had felt obliged to come.

If the case was to be fitted within the two category’s of changed circumstances referred to above, the case fell both in fact and spirit outside those categories. There was no change of circumstance, nor any misrepresentation or misstatement of any which caused the order to be made in the form it took. The highest that could be said was that parties and the District Judge had acted in ignorance or forgetfulness of CPR 44.11. Litigation was conducted on the basis that it was the responsibility of each party to look after its own interest and to know and research the law accordingly. With litigants in person, things might operate differently.

Fourthly, the District Judge had been wrong to exercise his discretion on a retrospective basis. The question on such an application is not merely what the right order ought to have been at the time of the original order but what should be done at the time of application to vary, bearing in mind changes of circumstances, new evidence, delay, explanation offered for delay, and especially any prejudice. There had been no explanation of the gross delay. It had been merely said that the original order had worked an injustice.

Appeal dismissed.

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