Claimant solicitors who deal with disputed medical expert fees and commonly use the Part 7 & Part 8 procedure will no doubt be aware of the recent, first instance decision in the case of Kilby v Brown (2014).
The case involved a low-value RTA case, which District Judge Peake described as “a couple of months or so of soft tissue injuries”. Following operation under the low value RTA portal, the defendant admitted liability, but at the end of stage 2 of the portal, damages had not been agreed. The claimant thus continued under the portal and banked the stage 2 payment. However after the 15 day time limit for payment had elapsed, the claimant dropped the claim from the portal and issued part 7 proceedings. It later emerged that this was because the stage 2 payment had been £15 short.
Following exiting the portal, the claimant solicitors amassed approximately £16,000 in costs bringing the claim to Birkenhead County Court. However, DJ Peake was far from impressed with the claimant’s conduct, describing it as “opportunistic” and not in the spirit of the overriding objective. Applying part 45.24, DJ Peake restricted costs “only to those that they would have recovered had this been a stage 3 hearing” under the portal.
The authority of Kilby v Brown (2014) shows the importance of acting reasonably and giving the opposing party an opportunity to rectify minor errors. However, recently some defendants are misinterpreting the authority and relying on the case when disputes occur over small disbursements.
The sums at hand when dealing with disbursement disputes are relatively only minor amounts, however, the fact only a small amount of money is in dispute, is not in itself an argument for opposing the proceedings. Crucially, DJ Peake advised in his judgment that he may have been “a tad more sympathetic had the claimant written to the defendant saying, ‘You are £15 light. Would you please let us have the £15?”
Considering the extreme level of costs amassed by the Claimant, the decision by DJ Peake is understandable. However, the portal is a prescribed low fee based scheme, where rules are rules, and yet the test of reasonableness has seemingly been applied retrospectively. Despite the Claimant solicitors not advising the Defendant of the £15 discrepancy, it very much seems that the Judge’s decision has stemmed from the extreme amount of costs amassed by the Claimant once the case exited the portal. Who pays for the insurer’s mistake, though? Presumably the judge felt in this case, that it was unreasonable for the solicitors not to give the insurer the opportunity to rectify the mistake. However, would the same decision have been reached had the Claimants amassed a much more modest amount of costs?
Considering the particularly low fixed costs RTA fee earners are expected to manage and run claims under, it is no surprise to see such opportunistic behaviour, especially in view of the Post Mitchell era and benefits of the claim falling out of the portal. Kilby v Brown is not an authority for arguing that, just because the sums in dispute are minor, they should not be disputed as the costs of arguing the same will likely outweigh the amount argued about.
Additionally it should be noted that this case is a non-binding, first instance decision, decided on its own facts and is clearly an extreme example of disproportionate costs. Thus, it can only be advised that when exiting the portal, a clear letter before action is drafted and sent to the Defendant to avoid any such mishaps as the Claimant has within this case.