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BIRD v ACORN – WHICH FIXED COSTS APPLY?
The Court of Appeal has settled the debate as to which fixed costs apply in cases listed for disposal hearings after interlocutory judgment, but which settle before the hearing.
In Bird v Acorn Group Ltd [2016] EWCA Civ 1096, the Court found that in such circumstances the matter would be treated as having been listed for trial and that the applicable fixed costs for that phase should apply.
The argument was as to whether the costs as set out in Column 1 or Column 3 in Table 6D in CPR 45.29E should apply on the basis that it could be argued that the matter had not yet been allocated and therefore it was Column 1 which should apply, but equally if the disposal hearing was treated as the listing of a trial (defined as “a final contested hearing”) then Column 3 would be the correct fixed fees. For ease of reference, the relevant table is set out above.
The arguments from the Defendant included that it could not be said at the date of listing whether the hearing would be either final or contested. In this particular case, which proceeded in the Birkenhead County Court, the matter had been given a 10 minute time allocation and pursuant to CPR 12 it was open to the Court to either finally decide the matter or give directions.
Further, if directions were given, this would lead to a further anomaly, in that directions would include allocation to track and therefore Column 2 would apply which would mean backtracking from Column 3 (if it were the case that Column 3 was said to apply) which would be illogical. The Interim Report from Jackson LJ suggested that the columns were supposed to be sequential, such that the 3rd column could not be reached until there had been allocation. In the circumstances, it was too early in the proceedings for the most generous costs scale to be triggered. Yet further, any other interpretation would lead to a disincentive to the Insurers for settlement.
In concluding that listing a case for a disposal amounted to a listing for trial, the Court found that the literal understanding of the term “disposal” meant that the purpose of the hearing was to finally dispose of the case at 1st instance. The fact that it may be impossible to tell whether it may prove to be possible to completely dispose of the matter was not relevant because strictly speaking even the hearing date of a full trial might turn into a directions hearing and therefore the logic behind that argument would lead to the 3rd column never being relevant. Whether the disposal hearing might be uncontested was irrelevant for exactly the same reasons. Further, the listing for a disposal hearing was the trigger for the Claimant to prepare and serve the necessary evidence and therefore that work had to be done. The Court referred to the finding of the Court of Appeal in Lamont v Burton, in which a disposal hearing had been treated as a trial for the purposes of interpretation of the CPR. An incentive to Insurers to settle remained because of the saving in their own costs which would be incurred in preparing to defend the claim. It was not accepted that there would be any need for backtracking between the columns because the Claimant would have prepared fully for the disposal hearing and therefore there was no need to consider a lower figure.