Phillips v Willis

A low-value road traffic claim which properly enters the applicable protocol does not leave that process merely because its personal injury element has settled. Under paragraph 7.2 of Practice Direction 8B, transfer from the Stage 3 procedure to Civil Procedure Rules Part 7 requires both further evidence and a finding that the claim is unsuitable for Stage 3.

The general power in rule 8.1(3) is wider, but it cannot be exercised to subvert the protocol process. Requiring disproportionate evidence and a further hearing to resolve a modest dispute over vehicle-hire charges was impermissible.

The claimant pursued a low-value road traffic accident claim through the applicable RTA Protocol. Liability was admitted, and the personal injury and treatment claims were agreed at Stage 2. A dispute of £1,152 remained concerning vehicle-hire charges.

The claimant commenced Stage 3 proceedings under Civil Procedure Rules Part 8. The district judge instead ordered the claim to continue under Part 7 on the small claims track and directed the parties to produce further evidence. His Honour Judge Freedman dismissed the claimant's appeal, treating the order as a case management decision under paragraph 7.2 of Practice Direction 8B.

The central issue was whether the district judge had power under paragraph 7.2 to order that the claim continue under Part 7.

1. Appeal allowed. The district judge lacked power under paragraph 7.2 of Practice Direction 8B to transfer the claim from the Stage 3 procedure to Civil Procedure Rules Part 7. His order was set aside (per Jackson LJ, Floyd LJ and Macur LJ agreeing).

2. Paragraph 7.2 has two preconditions: further evidence must be required, and the claim must be unsuitable to continue under the Stage 3 procedure. Neither condition justified the order in this case. The material exchanged at Stage 2 included detailed comparative vehicle-hire figures. The defendant intended to argue mitigation using those figures and had produced no competing evidence. It did not contest impecuniosity or the reasonable duration of hire.

3. The only suggested need for oral evidence concerned whether daily rather than weekly hire was reasonable. Just £462 depended on that question. Neither party had requested an adjournment or further evidence. Requiring additional witness statements, financial material, hire-rate surveys and another hearing was grossly disproportionate. The district judge's conclusion that further evidence was necessary was irrational.

4. Settlement of the personal injury element did not automatically remove the claim from the RTA process. The process is designed to narrow the dispute as the case progresses. It is therefore expected that fewer heads of loss and smaller sums will remain at Stage 3. Resolution of the personal injury claim is not a specified ground for leaving the process.

5. Although rule 8.1(3) of the Civil Procedure Rules is expressed more widely than paragraph 7.2, it cannot be used to subvert the protocol process. The district judge appeared to have relied on paragraph 7.2. Had he relied on rule 8.1(3), transferring this claim into Part 7 would still have been an impermissible exercise of that power.

6. It was unnecessary to define every circumstance in which paragraph 7.2 might apply. Claims involving very high vehicle-hire charges and complex issues of fact or law might be unsuitable for a Stage 3 hearing. The modest and evidentially contained dispute before the court was not such a case.

1. Court of Appeal (Civil Division): Allowed the claimant's appeal and set aside the district judge's order.

2. Newcastle-upon-Tyne Combined Court Centre: His Honour Judge Freedman dismissed the claimant's first appeal and upheld the district judge's order as a case management decision under paragraph 7.2 of Practice Direction 8B.

3. Gateshead County Court: District Judge Howard ordered the Stage 3 claim to continue under Civil Procedure Rules Part 7 on the small claims track and gave directions for further evidence.