Gillian Smith v Wigan Borough Council

When costs are assessed after a claim has concluded without track allocation, the court may retrospectively determine the track to which the claim would have been allocated. Under CPR 46.13, that exercise is discretionary and does not make the settlement sum a definitive measure of claim value. The court must consider the applicable allocation criteria, including the value of any damages claim under CPR 26.9(1)(b), together with the contemporaneous context and evidence. A settlement sum may be relevant, but it is only one measure of value. Where the evidence shows that damages would reasonably have exceeded £1,000, the small claims track is not the normal track for the relevant residential disrepair claim.

The defendant sought an oral review of a costs officer’s provisional assessment. The parties had settled a residential disrepair dispute before proceedings were issued, and an order had subsequently been made for the claimant’s costs to be assessed on the standard basis.

The defendant argued under CPR 46.13 that the costs should be restricted to those allowable on the small claims track, relying principally on the agreed settlement sum of £1,000. The claimant accepted that the settlement sum was relevant but relied on the contemporaneous offers, the continuing disrepair, the period during which full rent remained payable, and her vulnerability. The issue was whether the claim would have been allocated to the small claims track had proceedings been commenced.

1. The provisional assessment was upheld. The defendant’s request to restrict costs to the small claims track was refused. The provisional assessment became final, and the defendant was ordered to pay the claimant’s costs of the assessment, including the oral review hearing.
2. CPR 46.13 is discretionary. It permits a retrospective hypothetical assessment of the track to which a claim would have been allocated if allocation had taken place. It does not require the court to treat the settlement sum as the sole or definitive measure of value.
3. The relevant allocation criteria are found in CPR 26.9(1)(b). For a residential tenant’s disrepair claim, the small claims track is the normal track only where the repair costs are estimated not to exceed £1,000 and the value of any other damages claim is not more than £1,000. The parties accepted that the repair-cost threshold was satisfied, so the principal issue was the value of the damages claim.
4. The settlement sum was relevant but not determinative. Context and circumstances mattered, including the duration of the disrepair, the period for which rent remained payable, the continuing uncertainty about repairs, the claimant’s vulnerability, and the contemporaneous valuation evidence in the correspondence. The claimant’s accepted settlement did not necessarily represent the objective value of the claim, because settlement decisions may reflect the claimant’s resources and immediate needs.
5. On the evidence, damages would reasonably have been pleaded at more than £1,000 if proceedings had been issued. The claim therefore would not have been allocated to the small claims track under CPR 26.9(1)(b)(iii). The defendant’s repeated Part 36 offers referring to costs being assessed if not agreed also reasonably led the claimant to understand that no small-claims costs argument would later be advanced.
6. The court considered that permitting the defendant’s argument in the circumstances would risk undermining trust in settlements and encouraging artificial offers marginally above the small-claims threshold. It would also be inconsistent with the overriding objective if claimants had to issue proceedings merely to obtain certainty about costs recovery.

First-instance oral review of a costs officer’s provisional assessment. The provisional assessment was upheld and made final.