My labrador and I have a settled routine. In the spring and summer months, we take our walks in the riverlands of the Trent Valley: fields, water meadows, leafy copses and little rivers. In the autumn and winter months, when the cold winds start to blow, and the riverbank becomes wet and muddy, we move to the woods.
The great expanse of Sherwood Forest roamed by Robin Hood is no more, but there are still many woods in Nottinghamshire. In early October they are full of the scent of pine needles, verdant green undergrowth just starting to fade and the first few leaves from the deciduous trees, falling red, and brown and golden underfoot.
Some 4 years ago in October 2017, I first noticed that the recovery of court fees was being challenged in points of dispute. I wrote about it at the time on this blog noting that the argument appeared out of step with the general approach in tort law, that the court’s will refuse to discount from a tortfeasor’s liability other sources of relief that might be available to a claimant including insurance, benevolence and public funding: https://costsbarrister.co.uk/uncategorized/hard-times/.
Curiously, I don’t recall ever having to argue the point, and then at the beginning of 2020, a decision of His Honour Judge Lethem was handed down and the point seemed to go away: see the case of Panayot Ivanov v Steven Lubbe. However this week I was instructed to argue the point, on the part of the receiving party. It may be of interest to set out a summary of the arguments from that perspective.
When a claimant pays court fees and seeks to recover those as costs, but is impecunious so that the claimant would otherwise qualify for a fee exemption as part of the fees remission scheme, the defendant may seek to argue that claimant’s failure to do so means that the court fees have been unreasonably incurred. The recoverability of the court fees may need to be ventilated at a detailed assessment. The issue for the court can be stated thus:
Whether it is reasonable for a claimant who is or may be entitled to court fee remission to forego that benefit and pass the costs of the court fees onto a defendant as part of a claim for costs?
The starting point for the assessment of costs by the court is rule 44.4 CPR:
(1) The court will have regard to all the circumstances in deciding whether costs were –
(a) if it is assessing costs on the standard basis –
(i) proportionately and reasonably incurred; or
(ii) proportionate and reasonable in amount, or
(b) if it is assessing costs on the indemnity basis –
(i) unreasonably incurred; or
(ii) unreasonable in amount.
(2) In particular, the court will give effect to any orders which have already been made.
(3) The court will also have regard to –
(a) the conduct of all the parties, including in particular –
(i) conduct before, as well as during, the proceedings; and
(ii) the efforts made, if any, before and during the proceedings in order to try to resolve the dispute;
(b) the amount or value of any money or property involved;
(c) the importance of the matter to all the parties;
(d) the particular complexity of the matter or the difficulty or novelty of the questions raised;
(e) the skill, effort, specialised knowledge and responsibility involved;
(f) the time spent on the case;
(g) the place where and the circumstances in which work or any part of it was done; and
(h) the receiving party’s last approved or agreed budget.
The requirement to have regard to “all the circumstances” of the case requires the court to (i) identify the legally relevant circumstances including the applicable legal principles and (ii) have regard to them when exercising its’s discretion on the assessment of costs.
The issue at the heart of the dispute is whether as part of “all the circumstances” of the case, a claimant should be entitled as a matter of legal principle to recover from the defendant the court fees as part of the incurred costs caused by his wrongdoing, or whether as a matter of legal principle the defendant should be entitled to require a qualifying claimant to utilise the fee remissions scheme so that part of the costs of the claim are necessarily borne by the State, instead of a wrongdoer.
Although there is no binding appellate decision, directly on point in relation to costs, there is a considerable body of caselaw on whether a claimant can be said to fail to mitigate his loss by claiming his full damages from a defendant instead of resorting to other remedies, or claiming off insurance, or seeking charitable donations to reduce or extinguish his claim for damages.
Analysis of legal principle indicates a consistent thread in the authorities supporting the proposition that as a matter of legal principle a claimant is entitled to require a defendant tortfeasor to pay for the damages caused by their wrongdoing and to refuse other forms of support or provision which would have the practical effect of reducing the defendant’s liabilities.
Although the cases cited below concern issues of the assessment of damages, and mitigation of loss, rather than specifically the assessment of costs, there is no principled basis upon which it might be said they can be distinguished. Both damages and costs are two sides of the same coin: the financial consequences for the defendant of the defendant’s wrongdoing.
Both mitigation of damage and incurrence of costs, involve the court making a principled decision on reasonableness. The legal principle that a wrongdoer cannot rely upon a claimant’s entitlement to state funding to reduce his financial culpability, is apt therefore to apply to both exercises.
In the case of Peters v East Midlands Strategic Health Authority  QB 48, the Court of Appeal had no difficulty in finding that the argument that a claimant was obliged to claim state support to mitigate a tortfeasor’s liability was misconceived, as the claimant had a right to claim damages from a tortfeasor without any requirement to mitigate her loss by reliance on the public purse:
53 Having reviewed these authorities, we can now express our conclusion on this issue. We can see no reason in policy or principle which requires us to hold that a claimant who wishes to opt for self-funding and damages in preference to reliance on the statutory obligations of a public authority should not be entitled to do so as a matter of right. The claimant has suffered loss which has been caused by the wrongdoing of the defendants. She is entitled to have that loss made good, so far as this is possible, by the provision of accommodation and care. There is no dispute as to what that should be and the council currently arranges for its provision at The Spinnies. The only issue is whether the defendant wrongdoers or the council and the PCT should pay for it in the future.
54 It is difficult to see on what basis the present case can in principle be distinguished from the case where a claimant has a right of action against more than one wrongdoer or a case such as The Liverpool (No 2)  P 64 where a claimant has a right of action against a wrongdoer and an innocent party. In The Liverpool (No 2) , those two cases were treated alike. In our judgment, the present case should be treated in the same way. It is true that in the present case, the claimant’s right against the council is the statutory right to receive accommodation and care. But the fact that there is a statutory right in the claimant to have his or her loss made good in kind, rather than by payment of compensation, is not a sufficient reason for treating the cases differently.
Dyson LJ as he then was went further:
89. There is much to be said for the view that it is reasonable for a claimant to prefer self-funding and damages rather than provision at public expense, on the simple ground that he or she believes that the wrongdoer should pay rather than the taxpayer and/or council tax payer. In other words, it is not open to a defendant to say that a claimant who does not wish to rely on the State cannot recover damages because he or she has acted unreasonably. In Freeman, Tomlinson J came close to embracing this view at . We heard no argument on this approach to the mitigation issue and we express no concluded view about it.
Similarly, to the position regarding public funding, the availability of insurance to a claimant cannot be relied upon by a tortfeasor to reduce his own liability to a claimant. As noted in the case of Bee v Jenson (No 2)  EWCA Civ 923 at paragraph 9:
Ever since Bradburn v Great Western Railway  LRD 10 Exch 1 defendants have to accept that a claimant’s insurance arrangements are irrelevant and cannot be prayed in aid to reduce their liabilities.
Further it has long been established that benevolent contributions made by friends, relatives, or the public of large for the purposes of reducing a claimant’s loss, do not serve to reduce a tortfeasor’s liability to pay damages but are disregarded in the calculation of loss. Per Parry v Cleaver  AC 1 the speech of Lord Reid:
It would be revolting to the ordinary man’s sense of justice, and therefore contrary to public policy, that the sufferer should have his damages reduced so that he would gain nothing from the benevolence of his friends or relations or of the public at large, and that the only gainer would be the wrongdoer. We do not have to decide in this case whether these considerations also apply to public benevolence in the shape of various uncovenanted benefits from the welfare state, but it may be thought that Parliament did not intend them to be fore the benefit of the wrongdoer.
As regards moneys coming to the plaintiff under a contract of insurance, I think that the real and substantial reason for disregarding them is that the plaintiff has bought them and that it would be unjust and unreasonable to hold that the money which he prudently spent on premiums and the benefit from it should enure to the benefit of the tortfeasor.
It is clear law that a claimant can choose from remedies available to him, including who to sue, and whether to sue, and it will avail a defendant tortfeasor nothing to argue that the claimant should have pursued another party, or claimed a non-tortious remedy. A choice of legal remedy is simply not regarded as a question of mitigation, nor is a claimant’s choice judged on the criteria of reasonableness.
Similarly, if the claimant had available to him insurance which would defray his loss, it would not serve to reduce the defendant’s liability to pay damages and it is submitted costs by one penny, by reason of the doctrine of subrogation and the applicable legal principle expressed in Bee v Jenson (No 2).
Yet further if the claimant received charitable donations, they would not reduce his claim for damages, and it is submitted that if his legal costs were paid for him by a friend or relative, including the court fees so that the claimant personally did not pay the court fees, again this would not reduce the defendant’s liability to pay costs.
Perhaps the highpoint of the countervailing arguments for a defendant is derived from the line of authority culminating in Surrey v Barnet and Chase Farm Hospitals NHS Trust  EWCA Civ 451 where when a claimant switched from Legal Aid to a conditional fee agreement with ATE insurance, the Court of Appeal disallowed additional liabilities: it may be submitted that this supports an argument that if there is a lower costs regime available to the claimant why should the defendant pay more?
The case of Surrey might be thought to be readily distinguishable on several grounds:
(a) That case was concerned with the recoverability of additional liabilities, rather than the recovery of unexceptional costs such as court fees. It is noteworthy that it was not argued and could not be argued that base costs including court fees should be irrecoverable as again, the statutory scheme of Legal Aid creates an exception to the indemnity principle so that costs are recovered from a defendant, even though a claimant may well pay no contribution to his own costs.
(b) The ratio of Surrey concerned not the reasonableness of incurring additional costs through a change in the funding regime, still less whether a defendant should necessarily pay additional costs, but the effect of unreasonable advice and whether that vitiated the claimant’s decision rendering the choice unreasonable.
(c) The context of Surrey therefore is that it is not authority for any proposition of law that a claimant must adopt the cheapest funding model for the funding of the claimant’s case for the ultimate benefit of a defendant. It is concerned with advice, and expressly in Surrey the decision contemplates that in certain circumstances it can be reasonable for claimant to adopt a more costly funding scheme.
Although framed above as an argument of legal principle to be considered under rule 44.4 CPR, the same considerations might be framed as an argument of public policy, to be rightly taken into account when a judicial discretion is exercised. This can be put pithily.
The reason why there is a fee remission scheme contained in the Civil Proceedings Fees Order is to increase access to justice for indigent litigants. It is not there to provide a windfall for the insurance industry, nor to deprive the courts of their proper fees, where there is an insured defendant well able to pay those fees.
As a matter of public policy, it runs with the grain of the law on damages, that a claimant should be able to visit the financial consequences of the defendant’s wrongdoing upon the defendant and not be forced to throw himself upon the State.
Conversely, if court fees are not recoverable in cases where claimants are indigent, and qualify for the remission scheme, this does not serve to reduce the costs of justice at all, but simply means that the public purse must bear the cost of the litigation.
There are of course other arguments for a defendant paying party, but to date they appear not to have been made.
It remains to be seen whether disputes about court fees rumble on, or whether the issue subsides and the arguments move on.