Qader & Ors v Esure Services Ltd & Ors

The fixed recoverable costs regime governing personal injury claims which leave the relevant pre-action protocol ceases to apply when the claim is allocated to the multi-track. Although the natural language of the rules extended fixed costs to such claims, the legislative history demonstrated an obvious drafting error. The rules were therefore read as applying only for so long as the claim had not been allocated to the multi-track.

Neither an increase in value nor an allegation of fraud displaces fixed costs before allocation. The exceptional-circumstances jurisdiction under rule 45.29J is ordinarily exercisable at the conclusion of proceedings and need not be invoked when multi-track allocation has already disapplied the regime.

These conjoined appeals concerned personal injury claims properly commenced under the road traffic accident pre-action protocol. Each claim left the protocol after liability was denied. Following allegations that the respective accidents had been dishonestly contrived, both claims were allocated to the multi-track.

In Qader, the district judge and His Honour Judge Grant held that the language of the fixed costs rules continued to apply despite multi-track allocation. In Khan, District Judge Rich directed that ordinary multi-track costs management should apply, although he relied on an exceptional-circumstances provision which was not available at that stage.

The common question was whether section IIIA of Part 45 of the Civil Procedure Rules 1998 continued to impose fixed recoverable costs after a protocol claim had been allocated to the multi-track.

1. The appeal in Qader was allowed and the defendant’s appeal in Khan was dismissed. Section IIIA of Part 45 of the Civil Procedure Rules 1998 was to be read as providing that the fixed recoverable costs regime ceased to apply when a claim was allocated to the multi-track. Ordinary multi-track costs management and costs rules then applied.

2. On its natural construction, rules 45.29A and 45.29B clearly applied fixed costs to every claim properly started under the road traffic accident protocol which later left it. Their language did not distinguish between fast-track, multi-track and unallocated proceedings. Rule 3.12(1)(d), which excludes fixed-cost proceedings from costs management, created no conflict with that construction.

3. The literal result was not inherently irrational. Fixed costs promote certainty and proportionality, while rule 45.29J and Part 36 may mitigate rough justice in exceptional cases. The court nevertheless found from the scheme’s origins and consultation history that the rule-makers intended the regime for fast-track cases, disposal hearings and pre-allocation stages, but not for claims judicially allocated to the multi-track.

4. Applying Inco Europe Ltd v First Choice Distribution, [2000] 1 WLR 586, the three conditions for correcting an obvious drafting error were satisfied. The intended purpose was clear; inadvertence had prevented its implementation; and the substance of the omitted restriction was ascertainable. Rule 45.29B was therefore read as including the words “and for so long as the claim is not allocated to the multi-track”.

5. The exclusion took effect only upon allocation. An increase in value above £25,000 or a pleaded allegation of fraud did not itself disapply fixed costs beforehand, because either type of claim might remain suitable for the fast track. Preserving that boundary also maintained certainty where proceedings settled before allocation.

6. Rule 45.29J was a safety valve to be considered, if at all, at the conclusion of proceedings. Its language did not support its use at the allocation or case-management stage. District Judge Rich had therefore relied on the wrong provision, but his direction that ordinary multi-track costs rules should apply in Khan was correct for the reasons given by the Court of Appeal.

1. Court of Appeal (Civil Division): In Qader, allowed the claimants’ appeal and held that allocation to the multi-track disapplied the fixed costs regime. In Khan, dismissed the defendant’s appeal and upheld the application of ordinary multi-track costs rules, although for reasons different from those of the district judge.

2. Birmingham County Court: In Qader, His Honour Judge Grant dismissed the claimants’ appeal from District Judge Salmon’s decision that fixed costs continued to apply despite multi-track allocation.

3. Birmingham Civil Justice Centre: In Khan, District Judge Rich directed that ordinary multi-track costs management should apply, relying on an exceptional-circumstances costs provision. His Honour Judge McKenna granted permission to appeal and transferred the appeal to the Court of Appeal.