Williams v The Secretary of State for Business, Energy & Industrial Strategy

Where a claimant has unreasonably failed to use the EL/PL Protocol, the fixed-cost sanction in rule 45.24 of the Civil Procedure Rules 1998 is unavailable unless its express preconditions are met: Part 7 proceedings and a judgment. The rule cannot be rewritten to cover a pre-action settlement.

Nevertheless, the general costs powers in Part 44 apply. On a standard assessment, unreasonable pre-action conduct may justify restricting recovery to the fixed costs and permitted disbursements which would have been recoverable under the Protocol. The assessment need not proceed item by item once the court concludes that those fixed costs represent the maximum reasonable recovery.

The claimant settled a noise-induced hearing-loss claim against the Secretary of State by accepting a Part 36 offer before proceedings were issued. He had not used the EL/PL Protocol or the Claims Portal. Although he initially pursued a second employer, the Deputy District Judge found that, had proper instructions been given, the claim should have been brought solely against the Secretary of State under the Protocol.

The Deputy District Judge limited costs to the Protocol’s fixed costs under rule 45.24. On appeal, His Honour Judge Godsmark QC held that rule 45.24 did not apply because there had been neither Part 7 proceedings nor a judgment, and directed a standard-basis assessment. The Secretary of State appealed. The central issues were whether rule 45.24 could apply to a pre-action settlement and whether Part 44 could nevertheless restrict the claimant’s recoverable costs.

1. Appeal allowed in part. The court dismissed the Secretary of State’s first ground but allowed the second. Coulson LJ gave the judgment, with Hamblen and Lewison LJJ agreeing.

2. The exclusion in paragraph 4.3(6) of the EL/PL Protocol for disease claims with more than one employer defendant could not be qualified by importing concepts such as a viable, reasonable or strong claim. Such qualifications were absent from the Protocol and would generate uncertain satellite disputes. On the unchallenged findings, however, the claimant had unreasonably failed to use the Protocol.

3. The accepted Part 36 offer engaged rules 36.13(1) and 36.13(3) of the Civil Procedure Rules 1998. As the Protocol had not been used, the claimant was prima facie entitled to a standard assessment. Rule 45.24 did not alter that position. Its references to the claimant starting Part 7 proceedings and to judgment in the claimant’s favour were preconditions, not examples. It could not be construed as though it also covered settlement before proceedings.

4. There was no obvious drafting error permitting judicial correction. Ministry of Justice policy papers did not establish that the CPRC had intended a wider rule, because the CPRC was not bound to implement every policy proposal. The reasoning in Qader therefore did not justify adding words which would radically extend rule 45.24 into the pre-action stage.

5. Part 44 was not excluded. Its provisions concerning reasonable and proportionate costs, conduct and misconduct gave the costs court ample power to limit recovery to the Protocol’s fixed costs and permitted disbursements. Where the higher costs were incurred only because the claimant unreasonably avoided the Protocol, that will usually be the maximum recoverable amount. The court preferred the approach that this conclusion removes the need for an item-by-item assessment.

6. A defendant seeking that restriction should raise it promptly in the ensuing Part 8 costs-only proceedings, ordinarily in its acknowledgment of service.

• Court of Appeal (Civil Division): In [2018] EWCA Civ 852, the court dismissed the appeal insofar as it relied on rule 45.24, but allowed it insofar as Part 44 could restrict the claimant to the EL/PL Protocol fixed costs.

• Chesterfield County Court: On 20 June 2016, His Honour Judge Godsmark QC allowed the claimant’s appeal from the Deputy District Judge. He held that rule 45.24 was unavailable without Part 7 proceedings and a judgment, and directed a provisional assessment on the standard basis.

• Chesterfield County Court: On 30 March 2016, Deputy District Judge Morris held that the claimant should have used the EL/PL Protocol and, under rule 45.24, restricted recovery to its fixed costs and disbursements.