<!-- wp:paragraph --> <p><strong>Kindertons Limited v (1) Georgina Murtagh (2) Esure Services Limited [2024] EWHC 471 (KB)</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><strong>Introduction</strong></p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>This case concerns a non-party costs order made against a &nbsp;credit hire company, Kindertons Limited (“Kindertons”), in favour of an insurer, Esure Services Limited (“Esure”) and is a <strong>High Court decision</strong> by <strong>Turner J</strong>, handed down on 5 March 2024.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p><strong>Background</strong></p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>On 20 February 2019, a minor collision occurred when Georgina Murtagh carelessly drove her Volkswagen Polo into gentle contact with the rear of Serhat Ibrahim’s Audi A5.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Mr Ibrahim’s claim for the costs of repairs was in the sum of £2,543.80.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Two days after the accident, a representative by the name of Rachel telephoned Mr Ibrahim to discuss providing him with a replacement vehicle.&nbsp; During the telephone conversation, Mr Ibrahim described the damage to his vehicle as: “…not a lot of damage.&nbsp; It’s just the back bumper.&nbsp; It looks a bit out of line…”.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Notwithstanding his modest description of the damage, Mr Ibrahim was readily persuaded that he should not be driving the car and that he ought to hire an alternative from Kindertons.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>A report later provided by JP Morris assessors on behalf of Kindertons concluded that Mr Ibrahim’s Audi had suffered no damage in the accident that would have rendered it unroadworthy.&nbsp;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Rachel told Mr Ibrahim that if the other driver’s insurer, Esure, should offer to provide him with a less expensive alternative hire car he should “just tell them Kindertons are dealing with the claim and end the call from there”.&nbsp;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>On 23 February 2019, Mr Ibrahim entered into a credit hire agreement with Kindertons for the hire of a Jaguar XF (later replaced with a Mercedes Benz C250 on the same terms) at a rate of £345.08 per day.&nbsp; The period of hire was 33 days.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Also on 23 February 2019, Mr Ibrahim entered onto a credit hire agreement with Kindertons in respect of repair, recovery and storage facilities.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>On 25 February (two days after the initial hire period commenced and before Mr Ibrahim entered into the second hire agreement) Esure sent him a letter offering an alternative replacement vehicle at no cost at all to him but at a cost to Esure of £63.45 per day.&nbsp;</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p><strong>The claim</strong></p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>Proceedings were brought by Mr Ibrahim and his wife, Sylvia, against Miss Murtagh limited to £20,000.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>All but £50 of Mr Ibrahim’s special damages claim arose under the credit agreements.&nbsp;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>In addition, both Mr and Mrs Ibrahim claimed general damages in respect of personal injury, the combined value of which could not have exceeded £3,192.25 having regard to the value of Mr Ibrahim’s special damages claim and the overall claim limit.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Miss Murtagh denied liability and the matter proceeded to a fast track trial.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p><strong>The trial</strong></p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>The matter came before Mr Recorder Berkley KC, who found that whilst he was satisfied that a collision had occurred, (i) the damages claimed in respect of the repairs and hire charges had not been caused in the accident; (ii) Mrs Ibrahim was not in the vehicle at the time; (iii) both Mrs Ibrahim and her husband had been fundamentally dishonest in saying that she had been.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Mr Ibrahim did not take up the offer.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Mr and Mrs Ibrahim were ordered to pay Miss Murtagh’s costs in the sum of £12,000.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Mr Ibrahim promptly disappeared, leaving the costs bill unpaid.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p><strong>The non-party costs claim</strong></p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>Esure applied for a non-party costs order (“NPCO”) against Kindertons.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>The application ought to have been heard by Mr Recorder Berkley KC but instead came before Mr Recorder Gallagher.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Para. [29]: “It is regrettable that the trial judge did not hear the costs application and that neither side took the issue below.&nbsp; <strong>Particular care should be taken not to list NPCO applications to be heard by a judge who did not sit on the trial without a compelling reason</strong>.”</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p><strong>The decision below</strong></p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>The parties agreed that the Recorder had the power to make a NPCO.&nbsp; <strong>The issue was whether he should have exercised his discretion to exercise that power in the circumstances of the case</strong> (para. [30]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>The statutory foundation of this power is to be found in <strong>section 51(3)</strong> of the <strong>Senior Courts Act 1981 </strong>which provides as follows: <em>“(3) The court shall have full power to determine by whom and to what extent costs are to be paid”</em>.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>The Recorder correctly referred to <strong>CPR 44.16(2)</strong> as identifying the circumstances in which an NPCO can be made in the context of Qualified One-way Costs Shifting [QOCS].&nbsp;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>In addition, <strong>CPR 44 PD 12</strong> was noted to provide that <em>“[e]xamples of claims made for the financial benefit of a person other than the claimant…within the meaning of rule 44.16(2) are subrogated claims and claims for credit hire…”</em> and to state at para. 12.5(b) that <em>“the court may, as it thinks fair and just, determine the costs attributable to the claims for the financial benefit of persons other than the claimant”</em>.&nbsp;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Noting that Mr and Mrs Ibrahim were found to have no viable residual claims which might have been sustained if not for the finding of fundamental dishonesty, the Recorder found that the claim included a claim which was made for the financial benefit of Kindertons and awarded Esure 80% of their costs against Kindertons.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p><strong>Dismissing the appeal on all grounds…</strong></p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>The whole purpose of Kindertons providing credit hire facilities is to make a commercial profit out of the client’s legal claim (para. [39]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Kindertons stood to gain substantially from the claim brought in Mr Ibrahim’s name and the price of the services they provided under the contracts with Mr Ibrahim very significantly exceeded the value of the personal injury and “undocumented miscellaneous expenses” claims brought by him and his wife (para. [42]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>It followed that Kindertons had a very strong financial stake in the litigation and that <strong>“any benefit to Mr Ibrahim in pursuing the claim for hire charges was all but illusory”</strong> (para. [43]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>In relation to the contention that there was no proper basis for the judge’s finding that the appellant controlled the litigation, the court stated: <strong>“There is a danger that the concept of “control” is wrongly treated as if it were a traffic light, governing the exercise of the court’s discretion to make a non-party costs order</strong>, which is showing either red or green.&nbsp; Control is almost invariably a matter of degree.&nbsp; <strong>As a concept, it is relevant to the extent that, in any given case, the greater the level of control exercised by the non-party the more likely it will be that the court will exercise its discretion in favour of making a NPCO”</strong> (para. [44]). &nbsp;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>The court quoted, with approval, <em>Deutsche Bank AG v Sebastian Holdings [2016] 4 W.L.R.</em> at para. 62: “We think it important to emphasise that <strong>the only immutable principle is that the discretion must be exercised justly</strong>.&nbsp; It should also be recognised that, since the decision involves an exercise of discretion, <strong>limited assistance is likely to be gained from the citation of other decisions at first instance in which judges have or have not granted an order of this kind</strong>” (para. [45]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>On the facts of the case, there was a high degree of control: “The contractual terms identified above tied Mr Ibrahim into bringing a claim and continuing it at the risk of incurring serious financial consequences in the event that he were to fail to comply. <strong>It matters little, if anything, that such consequences were not, in the event, visited upon Mr Ibrahim. It is the threat and not the execution of repercussions which forms the usual basis for control</strong>” (para. [46]). &nbsp;&nbsp;Furthermore, by reference to the phone call between Mr Ibrahim and Rachel, the court was satisfied that Kindertons “wished to choreograph the progress of the litigation to preclude [Esure compromising the interests of Kindertons]” (para. [47]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>In respect of Kindertons’ contention that Esure needed to have established that Kindertons’ involvement resulted in them incurring more costs in the litigation than they would have done in any event (the “but for” test), the court held that <strong>there is no generally applicable guidance on causation applicable to all NPCO applications</strong> and that Lord Briggs in <em>XYZ v Travelers Insurance Co Ltd [2019] 1 W.L.R. 6075</em> was not intending to lay down any such guidance (paras. [51-52]).&nbsp;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li><strong>The position of Kindertons was different to liability insurers</strong>.&nbsp; It “involved itself voluntarily and enthusiastically in the claims after the accident giving rise to it”.&nbsp; <strong>Its involvement was “a matter of choice in the expectation of profit specifically related to the legal proceedings to follow”</strong> (para. [54]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>The intermeddler cases to which Lord Briggs referred in <em>Travelers</em> fell to be distinguished: “It could not be said that it was none of Kindertons’ business to involve itself in the progress of the litigation.&nbsp; On the contrary, it was very much its business both in a literal and metaphorical sense” (para. [56]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>On the circumstances of the case (<strong>“and without seeking to lay down any general rule relating to the appropriateness of NPCOs against credit hire companies”</strong>), the Recorder was right to conclude that it was just to make the order and he was not obliged to make any specific finding in respect of "but for" causation before so doing. <strong>It was neither fair nor just that it should be permitted to exercise a degree of control over the most valuable aspect of Mr Ibrahim's claims</strong> on the basis of instructions from Rachel the specific intention of which was to neuter any attempts by Esure to limit its exposure to the hire claim, <strong>without exposing itself to the potential consequences of a NPCO</strong> (para. [57]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>By ordering Kindertons to pay 80% of the costs, “<strong>the Recorder was exercising his discretion appropriately to reflect the proportionate benefit which it stood to obtain if the claim for hire charges had succeeded</strong>. An attempt mathematically to calculate on a "but for" basis of causation would simply not have reflected the unfairness of allowing Kindertons a free ride on the coat tails of Mr Ibrahim's claim” (para. [58]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Regarding Kindertons’ contention that Esure should have given notice that it would or might pursue a non-party costs order against it, the court held that “<strong>Kindertons would or should have known only too well that the nature of its business put it at risk of a NPCO application</strong>. The wording of CPR 44 PD 12.2, insofar as it relates to claims for credit hire, provided express warning of this; if any such were needed. I can discern no prejudice to Kindertons in the timing of Esure's application” (para. [61]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Regarding the argument that the finding of dishonesty made it unjust to make a NPCO against Kindertons, the court held as follows: “Kindertons voluntarily assumed the risk that Mr and Mrs Ibrahim would turn out to be dishonest….The level of scrutiny which would be applied to any aspect of the claim which it was seeking to adopt was a matter for Kindertons…it may well be that the cost of exercising higher levels of scrutiny would be disproportionate to the money thereby saved but this is a commercial decision the consequences of which must be borne by Kindertons” (para. [63]).</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Under the subheading ‘Discretion’: “On the facts of this case, I too would have made a NPCO against Kindertons had the matter come before me at first instance for the reasons I have given. But even if I had not been minded to make such an order, I would still have concluded on appeal that <strong>the approach taken by the Recorder to the exercise of his discretion fell comfortably within the generous parameters afforded to him. Appellate courts will not lightly interfere with such decisions</strong>” (para. [65]).</li> <!-- /wp:list-item --></ul> <!-- /wp:list -->

<!-- wp:paragraph --> <p>The Ministry of Justice (MoJ) has responded to the July 2023 consultation confirming that the costs of inquest proceedings will be recoverable separately, and the change will be inserted at CPR 45.1 (9) and come into force on 6 April 2024.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>In the consultation, which opened on 21 July 2023 and closed on 8 September, the MoJ had indicated a provisional view that the costs of inquests should be separately recoverable to the FRC, and subject to assessment, if these costs were reasonable and proportionate. And in making the rule change, the MoJ has confirmed that inquest costs should only be recoverable to the extent that they would be anyway, outside of FRC.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The consultation highlighted recognition by the MoJ that as part of any proper investigation process, an inquest will typically pre-date, and may (to an extent at least) enable the litigation.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>In the multi-track, where FRC will not apply, the costs involved in an inquest can be recoverable.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The MoJ also acknowledged as part of the consultation that without the addition of a new rule in the CPR to provide for the separate recoverability of inquest costs in FRC cases, that the level of costs involved in the inquest would make the pursuit of any claim for compensation uneconomic.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>There were 74 responses to the consultation, which included a joint response from the Bar Council and the Personal Injuries Bar Association (PIBA). With the addition of this new rule for inquest costs, there appears to be recognition by the MOJ of the position outlined in the joint response from the Bar Council and PIBA that:</p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>Inquests are an integral part of the process for investigating unnatural deaths and will inform and facilitate decisions taken about civil proceedings.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>It would be wrong to be overly prescriptive in defining the cases when inquests costs ought to be recoverable. Those claims that may be made following an inquest are not limited to claims for dependency under the Fatal Accidents Act 1976. There will be claims on behalf of the estate under the Law Reform (Miscellaneous Provisions) Act 1934; and accidents involving fatalities which found claims for family and non-family members for psychiatric injury as primary and secondary victims. Claims involving the deaths of children and young adults can be complex, but the damages recoverable can be limited to the levels set out in the Fast and Intermediate tracks.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Many cases involving inquests will be complex. There will be some cases when the facts of an inquest greatly assist the determination of civil liability, and admissions may be made, and judgment entered. These cases may be suitable for the Intermediate Track as a result. It is important that the CPR allow for inquest costs to be recovered in these circumstances.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p>The addition of the new rule to allow the costs of inquests proceedings to be recovered separately clearly addresses the wide concern shared by many, including the MoJ, that the FRC rules as previously drafted may have impeded solicitors’ ability to pursue claims, and therefore may have impacted on the future ability of bereaved families to obtain representation unless they were able to fund this, wholly or in part, themselves. The new rule will therefore be seen as a positive step for access to representation in the inquest process.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><em>Leila Benyounes is Head of the Inquests Team&nbsp;at Parklane Plowden Chambers and&nbsp;is ranked </em> <em>as a leading junior in Legal 500 and Chambers and Partners for Inquests and Inquiries. Leila’s full profile can be accessed </em><a href="https://www.parklaneplowden.co.uk/barristers/leila-benyounes"><em>here</em></a></p> <!-- /wp:paragraph -->

<!-- wp:paragraph --> <p>Access to representation in the inquest process in relation to costs recoverability presently hangs in the balance as the final government proposals following the July MoJ consultation on Fixed Recoverable Costs (FRC) are awaited. Amongst other issues, the recoverability of inquest costs in Fatal Accident Act cases is part of the FRC consultation.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The consultation opened on 21 July 2023 and closed recently on 08 September. The MoJ has indicated a provisional view that a new rule should provide that for cases allocated to the Fast Track and to the Intermediate Track, the costs of inquests should be separately recoverable to the FRC, and subject to assessment, if these costs were reasonable and proportionate.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The FRC will come into force imminently on 01 October for cases issued, or a cause of action accruing, after this date and there is still no decision in respect of a new or amended rule regarding the recoverability of inquest costs.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The consultation highlighted recognition by the MoJ that as part of any proper investigation process, an inquest will typically pre-date, and may (to an extent at least) enable the litigation.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>In the multi-track, where FRC will not apply, the costs involved in an inquest can be recoverable.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The MoJ has acknowledged as part of the consultation that without the addition of a new rule in the CPR to provide for the separate recoverability of inquest costs in FRC cases that the level of costs involved in the inquest will make the pursuit of any claim for compensation uneconomic.&nbsp; Indeed, in such circumstance if a bereaved individual’s claim is pursued, they will need to fund most of (if not all) of the costs involved in the representation at the inquest.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The MoJ welcomed general views on its proposals. The Bar Council and the Personal Injuries Bar Association (PIBA) provided a joint response indicating agreement with the MoJ that this is an issue which needs to be addressed and an amended rule should allow for inquest costs to be separately recoverable to FRC subject to assessment.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The joint response of the Bar Council and PIBA was that:</p> <!-- /wp:paragraph --><!-- wp:list --> <ul><!-- wp:list-item --> <li>Inquests are an integral part of the process for investigating unnatural deaths and will inform and facilitate decisions taken about civil proceedings. The rules should allow for such costs to be recovered in a civil claim to which FRC applies, bringing the Fast and Intermediate Tracks into line with the Multi Track in which such costs are recoverable.&nbsp;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>It would be wrong to be overly prescriptive in defining the cases when inquests costs ought to be recoverable. Those claims that may be made following an inquest are not limited to claims for dependency under the Fatal Accidents Act 1976. There will be claims on behalf of the estate under the Law Reform (Miscellaneous Provisions) Act 1934; and accidents involving fatalities which found claims for family and non-family members for psychiatric injury as primary and secondary victims. Claims involving the deaths of children and young adults can be complex, but the damages recoverable can be limited to the levels set out in the Fast and Intermediate tracks.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>Many cases involving inquests will be complex, and they should fall outside both the Intermediate and Fast Tracks. The CPR have recognised that claims brought by dependants under the Fatal Accidents Act are complex, and these should be excluded from the Fast Track. The Bar Council would support a rule to that effect. The Bar Council is less sure about to what extent such cases should also be excluded from the Intermediate Track. There will be some cases when the facts of an inquest greatly assist the determination of civil liability, and admissions may be made, and judgment entered. These cases may be suitable for the Intermediate Track as a result. It is important that the CPR allow for inquest costs to be recovered in these circumstances.</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>The Bar Council appreciates that drafting such a rule is not straightforward but is particularly concerned that it is important the recoverability of inquests costs is dealt with promptly so such costs can be recovered when the new rules take effect on 01 October 2023.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p>It is clear that implementation of FRC will have a significant impact on litigation. The MoJ has acknowledged that the FRC rules as currently drafted may impede solicitors’ ability to pursue claims, and therefore may equally impact on the future ability of bereaved families to obtain representation unless they are able to fund this, wholly or in part, themselves. Therefore the final outcome for the FRC proposals and the rules in relation to inquests are eagerly awaited.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><em><a href="https://www.parklaneplowden.co.uk/our-barristers/leila-benyounes/">Leila Benyounes</a> is Head of the Inquests Team at Parklane Plowden Chambers and is ranked as a leading junior in Legal 500 and Chambers and Partners for Inquests and Inquiries. Leila’s full profile can be accessed </em><a href="https://www.parklaneplowden.co.uk/barristers/leila-benyounes"><em>here</em></a>.</p> <!-- /wp:paragraph -->

<!-- wp:paragraph --> <p><strong>Interpreter Fees Recoverable in Fixed Costs Regime</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>In <em>Santiago v MIB</em> [2023] EWCA Civ 838 the Court of Appeal confirmed that interpreter fees are recoverable under the CPR 45 fixed costs regime.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The Claimant, a Brazilian national who spoke Portuguese and had <em>“a poor grasp of English</em>,” was injured in a road traffic accident. He issued proceedings and obtained judgment. The First Defendant driver was uninsured and MIB was required to meet the unsatisfied judgment. The case was subject to the fixed costs regime.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The Claimant sought to claim the fees of an interpreter. The fees were refused by the judge at first instance, who felt constrained by the decision in <em>Aldred v Cham</em> [2019] EWCA Civ 1780. The Claimant appealed. The case was leapfrogged to the Court of Appeal.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><em>Cham</em> was a case that dealt, strictly speaking, with Counsel’s fees in certain fixed costs cases, which were ruled to be irrecoverable as a disbursement. However, due to interpreter fees being mentioned in the judgment as a possible example of other irrecoverable fees, litigants have tended to proceed on that basis ever since.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>In <em>Santiago</em>, however, the Court of Appeal was clear in that the comments in Aldred were <em>obiter</em> and no more. In ruling that interpreter fees are recoverable, Stuart-Smith LJ held:</p> <!-- /wp:paragraph --><!-- wp:list {"ordered":true,"type":"1"} --> <ol type="1"><!-- wp:list-item --> <li>There could be no suggestion that interpreter fees were intended to be included in the recoverable fees set out at Table 6B;</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>When issues of access to justice arise, a broader interpretation is necessary to enable the dispute to be determined in accordance with the Overriding Objective (CPR1);</li> <!-- /wp:list-item --><!-- wp:list-item --> <li>The Court was not bound by Cham, that case having been on different facts and having been decided without specific consideration of CPR 1.</li> <!-- /wp:list-item --></ol> <!-- /wp:list --><!-- wp:paragraph --> <p>Accordingly, the Claimant’s appeal was allowed.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>A copy of the judgment is available on Bailii, view <a href="https://www.bailii.org/ew/cases/EWCA/Civ/2023/838.html">here</a>.</p> <!-- /wp:paragraph -->

<!-- wp:paragraph --> <p>April 2023 will see significant changes to CPR 44.14.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>These changes will allow defendants to enforce costs orders made in their favour against costs orders made in favour of claimants.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>Defendants will also be able to enforce costs orders up to the aggregate amount in money terms of any settlement, including cases concluding by way of acceptance of Part 36 offers and Tomlin Orders.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The effect of the new rule will be to reverse the decisions in Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654; [2018] 1 WLR 6137 (which precluded enforcement in cases where settlement had been agreed, rather than the court ordering an award of damages) and Ho v Adelekun [2021] UKSC 43; [2021] 1 WLR 5132 (which precluded the offset of costs against costs).</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The new rule will apply to cases issued on or after 6^th April 2023.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><strong>The Current Rule</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>CPR 44.14 currently reads as follows:</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>Effect of qualified one-way costs shifting</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><strong>44.14</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the claimant.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(2) Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(3) An order for costs which is enforced only to the extent permitted by paragraph (1) shall not be treated as an unsatisfied or outstanding judgment for the purposes of any court record.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><strong>The Amendment</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The amendment, by virtue of The Civil Procedure (Amendment) Rules 2023, reads as follows:</p> <!-- /wp:paragraph --><!-- wp:heading --> <h2>Amendment of Part 44</h2> <!-- /wp:heading --><!-- wp:paragraph --> <p>24.&nbsp;&nbsp;In rule 44.14—</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(a)in paragraph (1), for “damages” substitute&nbsp;“, or agreements to pay or settle a claim for, damages, costs”;</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(b)after paragraph (1), insert—</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>“(2)&nbsp;For the purposes of this Section, orders for costs includes orders for costs deemed to have been made (either against the claimant or in favour of the claimant) as set out in rule 44.9.”;</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(c)renumber what was paragraph (2) as paragraph (3);</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(d)after what will now be paragraph (3), insert—</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>“(4)&nbsp;Where enforcement is permitted against any order for costs made in favour of the claimant, rule 44.12 applies.”; and</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(e)renumber what was paragraph (3) as paragraph (5).</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><strong>The New Rule</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>The amended rule, by virtue of The Civil Procedure (Amendment) Rules 2023, will read as follows (amendments in <strong>bold</strong>):</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>Effect of qualified one-way costs shifting</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><strong>44.14</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for <strong><s>damages</s> or agreements to pay or settle a claim for, damages, costs and interest </strong>made in favour of the claimant.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(2) <strong>For the purposes of this Section, orders for costs include orders for costs deemed to have been made (either against the claimant of in favour of the claimant) as set out in rule 44.9.</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(3) Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(4) <strong>Where enforcement is permitted against any order for costs made in favour of the claimant, rule 44.12 applies.</strong></p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p>(5) An order for costs which is enforced only to the extent permitted by paragraph (1) shall not be treated as an unsatisfied or outstanding judgment for the purposes of any court record.</p> <!-- /wp:paragraph --><!-- wp:paragraph --> <p><strong>Practical Points</strong></p> <!-- /wp:paragraph --><!-- wp:list {"ordered":true,"type":"1"} --> <ol type="1"><!-- wp:list-item --> <li>Defendant Part 36 offers are &nbsp;likely to have far more bite than they did previously.</li> <!-- /wp:list-item --></ol> <!-- /wp:list --><!-- wp:list --> <ul><!-- wp:list-item --> <li>Defendants will now effectively be able to enforce costs orders up to the aggregate amount of damages and costs awarded to a claimant.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:list --> <ul><!-- wp:list-item --> <li>Claimants, and their lawyers (who will now have more at stake themselves than was previously the case), are going to have to think very carefully before rejecting offers.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:list --> <ul><!-- wp:list-item --> <li>Claimants and their lawyers will have to think carefully before making or opposing interim applications, as adverse costs orders are now more likely to be enforceable.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:list --> <ul><!-- wp:list-item --> <li>There may be a greater need for ATE protection and claimants will need to be advised accordingly.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:list --> <ul><!-- wp:list-item --> <li>There may be a flurry of cases issued between now and 6^th April as claimants seek to avoid being caught by the new rule.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:list --> <ul><!-- wp:list-item --> <li>There will likely be satellite litigation. There always is.</li> <!-- /wp:list-item --></ul> <!-- /wp:list --><!-- wp:paragraph --> <p>Should you wish to discuss the above, please do not hesitate to contact me in chambers.</p> <!-- /wp:paragraph -->