Ryan v Hackett

Where unreasonable conduct causes a claim to leave a low-value personal injury protocol, the costs consequences are governed by the court’s discretion under CPR 44.11. The court may restrict recovery to fixed costs, but it must assess the actual consequences of the conduct on the evidence. It should avoid speculation about what might have happened had the claim remained within the protocol, including hypothetical settlement offers. An evaluative costs decision may be overturned only where the lower court erred in principle, failed to consider a material matter, considered an immaterial matter, or reached a decision outside the generous ambit of reasonable disagreement.

The claimant suffered personal injury in a road traffic accident and initially pursued the claim under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents. His solicitors incorrectly notified the defendant that the claim had exited the Portal because an interim payment was allegedly late. The claim later proceeded under Part 7 and settled for £20,000 net of CRU.

The Senior Court Costs Office held that the solicitors’ conduct was unreasonable but declined to restrict the claimant to fixed costs. The defendant appealed, arguing that the claimant had been deprived of an opportunity to settle within the Portal and that the Master had relied on impermissible hindsight and speculation.

1. Appeal dismissed. The Master’s decision that the claimant should recover such reasonable and proportionate costs as he could justify on detailed assessment was upheld.
2. CPR 45.24 did not apply because it requires judgment in favour of the claimant, which was absent in the relevant procedural circumstances. The applicable provision was CPR 44.11, under which unreasonable conduct may justify disallowing all or part of the costs being assessed.
3. The Master was entitled to find that, although the initial notification was erroneous and unreasonable, the claim would probably have left the Protocol later because its value increased beyond the Protocol limit. That conclusion was based on the solicitors’ actual conduct, the uncontested increase in value and the subsequent issue of Part 7 proceedings.
4. The Master was entitled to reject as speculative the contention that the defendant would have made an offer within the Protocol which the claimant would have accepted. The authorities, including Johnsey Estates (1990) Limited v Secretary of State for the Environment, supported caution against reconstructing hypothetical settlement histories after the event. The Master had warned himself against speculation and reached an evaluative conclusion on the evidence.
5. The Master had not improperly treated the claimant and his solicitors as identical. No material disparity between their interests had been shown, and the claimant appeared to have instructed the solicitors to exit the Portal. Arguments concerning fundamental dishonesty and the advantages of remaining within the Protocol had not been properly advanced below.
6. The appellate court could interfere only if the Master exceeded the generous ambit of reasonable disagreement, erred in principle, omitted or considered an irrelevant factor, or reached a decision that was wholly wrong because the competing factors had not been fairly balanced. That threshold was not met.

• High Court (Queen’s Bench Division): The appeal from the Senior Court Costs Office was dismissed. The Master’s costs decision was upheld.
• Senior Court Costs Office: Master Rowley held on 18 July 2019 that the claimant was entitled to reasonable and proportionate costs on the standard basis, rather than only fixed costs.