The Claimant instructed Leigh Day solicitor to represent him following a road traffic accident. Upon initial review Leigh Day assessed that the matter was suitable for Low Value Personal Injury Portal and a CNF was submitted. The Defendant admitted liability and made an offer of £1,500 whereupon the Claimant transferred his instructions to Fieldfisher. Fieldfisher did not consider that the matter was suitable for the Portal and following further medical evidence/ surgery the claim was settled for £42,000 pre issue.
Further to Qader v Esure  EWCA Civ 1109 it appeared the Claimant would be limited to fixed costs under CPR 45 as the matter was not allocated to the Multi-Track however Claimant pleaded exceptional circumstances under CPR 44.29J(1).
The matter was initially heard in front of Master McCloud who felt that the word “exceptional” should be given its normal meaning i.e. something that was out of the “general run” of cases and that this was a “low bar”. She considered that on a percentage basis this case was considerably outside the range of value of Portal cases and the costs were somewhat higher than Portal Costs. Given the circumstances she considered that was an exceptional matter albeit no strikingly so. It was generally accepted that the matter had exited the Portal that fixed costs under CPR 45 III rather than Portal Costs under CPR 45 II applied.
The Defendant appealed on the following grounds:
- The Master has made an error in principle in considering the circumstances against which exceptionality should be judged;
- The Master had made an error in expressing the test as being a low bar;
- The Master had not considered whether the exceptional circumstances had caused any significant additional costs;
- The decision was wrong and outside the ambit of reasonable disagreement.
The Defendant was successful in front of Mr Justice Stewart on the first 2 grounds but unsuccessful on the third and fourth grounds.
Mr Justice Stewart considered that the Court had misdirected itself as to the “basket” of cases against which exceptional circumstances ought to be judged and that cases which had exited the Portal should be judged against other cases that had exited the Portal rather than those that had settled within the Portal.
“Section IIIA expressly provides that ex-protocol cases are to remain subject to the fixed costs regime. Two of the reasons for exiting the protocol are that the claimant notifies the defendant that the claim has been re-valued at more than the protocol upper limit or that the claim is unsuitable for the protocol, e.g. because there are complex issues of fact or law.
“In other words, the rules mandate fixed recoverable costs in such cases, subject only to subsequent judicial allocation of the claim to the multi-track or rule 45.29J(1). ‘Exceptional circumstances’ have therefore to be evaluated against those cases which are covered by part IIIA.”
The Master felt that the bar had been set too low at first instance in particular relying on Hislop v Perde (a decision which was not available when the first instance decision was made) which stated “it goes without saying that a test requiring “exceptional circumstances” is already a high one”.
He also considered that there were the policy reasons reiterated in fixed-costs regime cases, which, while allowing for ‘exceptional circumstances’ to depart from the regime, “require a more strict, not a ‘low bar’, approach”.
The matter was thereafter referred back to Master Gordon-Saker to resolve whether exceptional circumstances existed in this instance.
It was necessary for the first instance decision to be overturned in order to ensure consistency with Hislop v Perde which was handed down following the first instance decision. In the case of Hislop the Court held that the “exceptional circumstances” test was a “high one”. I think it’s wholly appropriate that there need be a high bar to achieve the “get out” to maintain the certainty of the fixed costs regime, a prerequisite for the success of such a scheme.
Nonetheless, I do have some concerns as to whether the current position of law in this area accurately reflects the intent of the law makers. While much was made by the Master of the “swings and roundabouts” nature of fixed costs, and the appropriate “basket” of cases to be considered, yet again it seems out of sync with the “basket” considered by Lord Jackson and his statisticians. This is particularly apparent in the rulings in Qader v Esure and the maintenance in fixed costs in in cases in excess of £25K when these were excluded from the basket of cases used to calculate the fixed costs amounts. It seems that there is an inappropriate authority attached to the expression “basket of cases”, allowing the judiciary to move the FCR away from its original footings. Whilst, from a policy position I can entirely see why this has been adopted, I am not convinced that from a legal standpoint, it is correct or appropriate to be adapting the system in away that was not intended when it was conceived.Tags: Exceptional Circumstances, Ferri, Fixed Costs, Gill, High Bar,  EWHC 952 (QB)