I have previously written about the discrepancy between the Fixed Recoverable Costs a claimant and a defendant may recover for the same period.
This is as a consequence of a combination of CPR 45.45(1)(a)(iv), CPR 45.50(2)(b)(iv) CPR 45.6(2) and (3).
A claimant’s costs are set by reference to the damages agreed/awarded. That is what CPR 45.45(1)(a)(iv) and 45.50(2)(b)(iv)) expressly provide for. “Damages” are defined as “monetary relief” (for claims with a financial value) and “monetary relief” is defined as:
“(iv) in so far as it applies to monetary relief, means—
(aa) agreed damages; or
(bb) an amount awarded following trial”
In contrast, CPR 45.6(2) and (3) provide that the defendant’s costs shall be calculated by reference to the value of the claim and that this shall be based on:
“the amount specified in the claim form, without taking into account any deduction for contributory negligence, but excluding – (i) any amount not in dispute; (ii) interest; or (iii) costs”
However, I am grateful to Kerry Underwood, in his invaluable subscriber newsletter, for pointing out that matters may not be that simple.
This is because CPR 36.23(6) reads (in the section headed “SECTION II Claims to Which Sections VI, VII, or VIII of Part 45 Apply) under sub-heading “Costs consequences of acceptance of a Part 36 offer”:
“Fixed costs shall be calculated by reference to the amount of the offer which is accepted.”
So far as claimant’s costs are concerned, this adds nothing. “Agreed damages” and “the amount of the offer which is accepted” are the same thing. The settlement amount will determine the costs payable to the claimant.
But, what does this mean for calculating a defendant’s costs? If, where a defendant becomes entitled to costs following late acceptance of a defendant’s Part 36 offer (which is the automatic consequence of CPR 36.23(3)(b): “the claimant is liable for the defendant’s costs in accordance with paragraph (8)”), the costs are calculated by refence to the amount of the offer, then CPR 45.6(2) and (3) is clearly wrong in this situation.
Is this another drafting error? (If so, I have lost count as to how many have been identified to date.) Is it meant to be a case of the general rule giving way to the specific? In other words, are a defendant’s costs usually determined by reference to the damages claimed unless the entitlement to costs arises following acceptance of a Part 36 offer, in which case the costs are determined by reference to the amount of the agreed offer? However, if that is the case, why on earth does CPR 45.6(2) not read something like:
“(1) Where, in any case to which Section VI, Section VII or Section VIII of this Part applies, the court makes an order for costs in favour of the defendant, the allowable costs are—
(a) the fixed costs set out in Section VI, Section VII or Section VIII;
(b) the applicable disbursements set out in Section IX of this Part.
(2) Except for where CPR 36.23 applies, for the purpose of assessing the costs payable to a defendant by reference to the fixed costs in Table 12 and Table 14—
(a) “value of the claim for damages” and “damages” shall be treated as references to the value of the claim, as defined in paragraph (3) …”
I place this firmly in the category of drafting cock-up.
