Although we are now in the “dog days” of part 45 section II, and the issue of fixed recoverable costs inter partes, interesting points still arise from time to time on the interpretation to be afforded to the rules.
In a recent case, I dealt with a dispute arose as to whether the subject matter of a settled claim was a road traffic accident or an employers liability claim and whether fixed recoverable costs accordingly applied if the former contention was correct. The Claimant sought a declaration in these terms:
It is declared that the Claimant’s entitlement is to reasonable costs and disbursements to be the subject of detailed assessment if not agreed and not limited to the fixed recoverable costs prescribed by section II of part 45 CPR.
The issues in the case were threefold:-
(i) Whether the terms of the contract of compromise settling the case precluded the Defendant from arguing that the predictive costs regime had any application.
(ii) Whether the claim was apt to fall within the RTA fixed recoverable costs regime prescribed by section II of Part 45 of the Civil Procedure Rules 1998 in any event.
(iii) If so, whether in any event the Court should exercise its discretion to allow an amount greater than fixed recoverable costs pursuant to rule 45.12 of the Civil Procedure Rules 1998 in any event.
The facts of the case were not controversial between the parties. On 9th January 2010, the Claimant was injured in an accident. On 30th September 2010, the Claimant’s instructed solicitors wrote a letter of claim to the Defendant’s employers liability insurers.The letter set out the summary of the claim and alleged inter alia, the following:
We are instructed that our client who was a former employee of your insured was driving the work’s van home in readiness for an early start on a job in Birmingham the next day. He was travelling out of Lincoln towards Nettleham and had just negotiated the A46 bypass roundabout, about 200 yards further on, and there was a sudden explosion in the back of the van which shot flames through to the front where he was sitting. He felt the flames on the left side of his face and on the top of his head so quickly pulled up and managed to jump clear of the van before it exploded. He landed on the road sustaining personal injuries. We understand that there was a canister of some sort of solvent in the back of the van which came into contact with the battery terminals causing the explosion. We understand that the battery was located under a seat in the back of the van and was left uncovered.
By an email dated 16th May 2012 from the Claimant’s solicitors to the Defendant’s insurers, an offer was put: the claim could be compromised in the sum of £4724 together with payment of reasonable costs and disbursements to be the subject of detailed assessment if not agreed. The Defendant’s insurers signified acceptance by conduct, by the despatch of a cheque for £4724 on 19th June 2012, not qualified in any way.
The terms of the agreement noted above were for “reasonable costs and disbursements” not “fixed recoverable costs and disbursements”. The Defendant having instructed solicitors, attempted to argue that fixed recoverable costs was the measure of costs recoverable. In turn that was contended on the part of the Claimant to be no more nor less than an attempt to resile from a concluded contract.
The District Judge was referred to a number of authorities. The question of the scope of an Order, and the extent to which “reasonable” costs can be interpreted to mean fixed costs has been ventilated in the Court of Appeal decision of O’Beirne.v. Hudson  EWCA Civ 52. See in particular from paragraph 16 of that decision. In summary, the court at best, if it concludes that the case might have fallen within the fixed recoverable costs regime have regard to that as a factor, for the purposes of a rule 44.5 assessment, but cannot limit the quantum of costs by what is an arbitrary figure. See also Letts.v.Royal Sun Alliance  EWHC 875, which is along the same lines.
In relation to the second issue, the relevant rule was 45.7. The Claimant was using the Defendant’s vehicle in the sense that he was driving it. The issue in the case is whether his accident was “caused by or arising out of” that use: if it was then per the wording of the rules it would be a road traffic accident. The key case on this issue, was the decision of the Court of Appeal in Dunthorne.v.Bentley (Court of Appeal Transcript 26th February 1996): that case drew a distinction in terms of causation for the purposes of the Road Traffic Act 1988: a proximate cause, or causally contributing factor constitutes something “arising out of”: a mere causal concomitant does not. The concept mirrors the old distinction in the common law between causa sine qua non, and causa causans: the background cause and the immediate cause.
On the facts of this case, it was contended on the part of the Claimant, that the presence of the van, was a background cause to the accident, but the effective, immediate or proximate cause, was the presence of inflammable solvents, which did indeed ignite: if they had been properly stowed (or not carried at all) would have avoided this accident.
The Claimant’s final point was that even if the Defendant established that prima facie rule 45.7 applies, the Court has a discretion to allow in exceptional cases, a greater element of costs by rule 45.12. In this context, on ordinary principles of construction, the first point to ask, is what “exceptional” means. In ordinary English, it means something other than the norm.
The Claimant contended that the facts of the case (per the letter of claim) made it clear that this was not a rear end shunt, or other “bent metal” case. Had it been pleaded and issued, the Claimant would have placed primary reliance on the Provision and Use of Work Equipment Regulations 1998, the Control of Substances Hazardous to Health Regulations 1999 and pleaded unsafe system of work, unsafe plant and equipment and lack of supervision: not driving too fast, failing to keep a proper lookout etc.
In short, it was argued that as a question of substance, the case was an employers liability case, it falls outwith the norm of a road traffic accident claim and the court should exercise its discretion under rule 45.12 accordingly.
In the event the District Judge found that the Defendant was precluded from the terms of the compromise from arguing that fixed recoverable costs applied, that if they had not been so precluded, the case would have come within rule 45.7 due to the central role the van had played in the accident, but that in any event he would have exercised his discretion under rule 45.12 to direct that assessed costs was appropriate due to the unusual nature of the case.