The Civil Procedure Rule Committee has published CPR amendments due to come into force on 1st April 2013. Some of the key provisions for PI practitioners are as follows:-
Amendment to the Overriding Objective
The overriding objective will become not just “to deal with cases justly” but also “at proportionate cost”; and the definition of “dealing with a case justly” will now include “enforcing compliance with rules, practice directions and orders”. This puts both costs and compliance with directions right at the heart of the Rules – with these changes it will become more difficult to point a judge to the overriding objective when asking him or her to overlook a breach of the rules.
Relief from Sanctions
Talking about breaches or rules and court orders, CPR 3.9 is to be revised taking out the familiar checklist. Instead, the court will consider all the circumstances, including specifically the need for litigation to be conducted efficiently and at proportionate cost, and the need to enforce compliance with rules, practice directions and court orders. As above, this does represent a significant shift in approach.
The amendments will introduce a comprehensive set of rules on cost management for multi-track cases, including costs budgets. These merit detailed consideration. There are some sanctions in the event that these rules are not complied with – for example, failure to file a costs budget will mean the litigant is treated as having filed a budget comprising only the applicable court fees (unless the court orders otherwise – see above).
Increased Small Claims Track limit
The Small Claims Track limit is raised to £10,000: but low value personal injury claims for general damages over £1,000 will continue to be Fast Track cases. The current rules regarding harassment; unlawful eviction relating to residential premises; and disrepair will remain.
New Provisions relating to Disclosure
These will include a requirement for parties to discuss and seek to agree a proposal in relation to disclosure meeting the overriding objective.
Bonus for Claimants beating Part 36 offers
In addition to interest on damages; costs on the indemnity basis; and interest on those costs, Claimants who beat their own Part 36 offers will be entitled to an “additional amount”, 10% of the sum awarded to the Claimant (where the claim is a money claim) up to £500,000 and 5% of the sum above that, up to a maximum £75,000. For non-money claims, the bonus applies to the sum awarded to the Claimant in respect of costs.
CPR 43 is revoked, and Parts 44 – 48 are replaced in full. That’s to say, all the existing sections of the CPR relating to costs are to be changed. Below are some of the key points from the new provisions:-
Assessment of Costs
When assessing costs, the court will “only allow costs which are proportionate to the matters in issue”. Costs that are disproportionate may be disallowed even if they were reasonably or necessarily incurred.
Costs are proportionate if they bear a “reasonable relationship” to the sums in issue; the value of non-monetary relief; the complexity of the litigation; additional work caused by the paying party’s conduct; any wider factors such as reputation or public importance.
This rule only applies to cases commenced after 1st April 2013.
Qualified One-Way Costs Shifting
This applies in personal injuries and Fatal Accident claims. It does not apply to pre-action disclosure. There is no means test: this is of general application.
Qualified one-way costs shifting means that costs orders may be enforced against a claimant only to the extent that the aggregate sum of such orders does not exceed the aggregate sum of damages and interest made in favour of the Claimant. In practice, this will work as follows:-
a) Where a claim is dismissed, the Claimant receives no damages or interest. A costs order will be made in the Defendant’s favour, but the Defendant will not be able to enforce the costs order against the Claimant to any extent.
b) The Claimant recovers damages, but fails to beat the Defendant’s Part 36 offer. A costs order will be made in the Defendant’s favour pursuant to Part 36. But this can only be enforced up to the total of the damages and interest payable to the Claimant. So if the Claimant is awarded £20,000 damages and interest, this figure provides a cap on the costs that can be enforced against the Claimant.
c) Interim costs orders have been made in the Defendant’s favour, but the Claimant untimately succeeds. As above, the Defendant will be able to enforce its costs orders, but only up to the total of the Claimant’s damages and interest.
There are some exceptions, though:-
Where proceedings have been struck out on the basis that a) they disclose no reasonable grounds for bringing the proceedings; b) the proceedings are an abuse of process; or c) where the Claimant’s conduct is likely to obstruct the just disposal of proceedings, there is no qualified one-way costs shifting.
Where the claim has been found to be “fundamentally dishonest” the court may grant permission for the Defendant fully to enforce the costs order.
Claimant’s Costs where there is a Damages-Based Agreement
The Court will make the same costs order in the Claimant’s favour as if there were no damages-based agreement.