Civil Claims that are allocated to the small claims, fast track or intermediate track are usually subject to the fixed costs regime, which limits recovery of costs for the successful party to fixed amounts dependent on what stage of the proceedings the matter is disposed of.
Understanding the fixed costs regime
The intention behind the regime was to allow for additional predictability when would-be litigants were contemplating bringing a claim, to allow them to make an informed decision and know what their potential cost exposure is likely to be. An unintended side effect of the regime, however, has without a doubt been that many prospective litigants are priced out of litigation due to rising legal fees and the unlikely chance of recovering their legal costs even if they are successful. There are, however, measures within the Civil Procedure Rules to recover costs beyond the scope of the usual limitations, in select circumstances.
Some of these exceptions are below:
- 9(1) – in exceptional circumstances
- CPR 45.13(2) – unreasonable behaviour
- CPR 44.11 – penalties for misconduct
- 16(1) – general discretion for the Court to award costs above the fixed amounts
The above exceptions are not without their limitations and may only apply in certain types of matters such as non-possession matters.
Case review – costs in possession proceedings
At DSL, I was recently successful in obtaining a costs award above the fixed costs usually permissible in possession proceedings, which are usually limited by CPR 45.16(c) to just £69.50. Despite the tenant vacating the property and addressing the rental arrears, the tenant refused to pay the Court fee or the fixed commencement costs. It was therefore argued that CPR45.16(c) was not engaged, due to the tenant’s failure to pay the fixed commencement costs and allowed for the Court to utilise its discretion and make a substantial costs award.
Additional considerations
The Judge further considered that the tenant had offered to pay the court fee and the fixed commencement costs. However, they only did so some two months after the Claim had been issued, a week before the Hearing, and allowed for 7 hours for the offer to be accepted. The Judge held that this was insufficient to engage CPR45.16(c).
Outcomes
This represented a fantastic outcome for the Client, who was faced with a commercial risk of proceeding with the Hearing knowing that the fixed costs could realistically be the limit for recovery. This is an unfortunate position that many prospective parties to litigation find themselves in – where the costs of recovery can often outweigh the debt, and a commercial decision might actually be to abandon the claim. Nevertheless, we were successful in overturning the default position here, where the tenant had attempted to hold the landlord to ransom on the costs they were entitled to.
At Dyne Solicitors, we specialise in civil disputes. For a no-obligation chat, please contact Alex Sandland or Patrik Jones-Wright.