J C and A Solicitors Ltd v Andeen Iqbal & Anor

Under the original Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents, Stage 1 fixed costs became payable when liability was admitted. They were an outright entitlement, not an interim or conditional payment. The Protocol and the Civil Procedure Rules contained no implied right to repayment merely because the claimant did not progress the claim to Stage 2. A detailed, negotiated costs scheme should not be supplemented unless the missing term and its intended operation are clear. The ordinary loser-pays rule for court proceedings did not govern pre-action stages designed to avoid proceedings. The appeal was therefore allowed.

Three materially identical road-traffic personal injury claims proceeded through Stage 1 of the RTA Protocol. Liability was admitted and Stage 1 fixed costs were paid, but the claims were not advanced to Stage 2 and became statute-barred. EUI Limited brought county court claims seeking repayment from the claimants and their solicitors, J C and A Solicitors Limited.

District Judge Phillips held that the Protocol required repayment where a claim was not pursued beyond Stage 1. The appeal concerned whether the Protocol or the Civil Procedure Rules imposed that obligation and, alternatively, whether the solicitors could be liable. The alternative causes of action were not pursued on appeal.

Lord Justice Briggs delivered the judgment of the court. Lord Justices Flaux and McFarlane agreed.

1. Disposition. The appeal was allowed. The District Judge had construed the original RTA Protocol as imposing a right to recover Stage 1 costs whenever the claim was not pursued further. That construction was wrong.
2. Nature of the Stage 1 entitlement. Paragraph 6.18 required payment of the Stage 1 fixed costs after admission of liability. Read with the Protocol as a whole, that payment was an outright entitlement. It was not an interim payment on account and was not conditional on the claimant proceeding to Stage 2. The Protocol’s stated aim that the legal representative receive fixed costs at the end of each stage supported that conclusion.
3. Implied repayment term. The Protocol was a detailed and precise code negotiated by sophisticated stakeholders. The court should be slow to imply a repayment term, particularly where the Protocol addressed interim payments on damages but made no equivalent provision for interim costs. It was not enough to identify a supposed lacuna. The court also had to be confident about the intended content and operation of the implied term. The 2013 amendment could not be used to construe the earlier version.
4. Related provisions. Paragraph 5.9 preserved entitlement to Stage 1 costs where a claim initially believed reasonably to be worth at least £1,000 later proved worth less. Rule 45.40 required Stage 1 costs already paid to be taken into account in a later costs order to prevent double recovery; it did not make them repayable or conditional. The general loser-pays rule in CPR rule 44.2(2)(a) concerned court proceedings and did not govern pre-action stages intended to avoid proceedings.
5. Risk of abuse and second ground. The theoretical risk that solicitors might commence claims merely to obtain Stage 1 costs did not justify rewriting the earlier Protocol, particularly where there was no evidence of such conduct. Since the appeal succeeded on construction, the court did not decide whether the solicitors, rather than the claimants, could in any event be liable to repay the costs.

1. Court of Appeal (Civil Division): In [2017] EWCA Civ 355, the appeal from the District Judge’s construction of the RTA Protocol was allowed.
2. Cardiff Civil and Family Justice Centre: District Judge T M Phillips held that Stage 1 fixed costs were recoverable where claims were not pursued beyond Stage 1.