Infant Approval Hearing Costs and Fixed Costs

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If you are instructed on a case involving a child and it falls within the fixed costs regime, you have no doubt found yourself caught in the web of determining which additional costs, if any, are recoverable. The answer depends upon which costs regime applies. This blog addresses the differences to claims falling under the post-October 2023 rules. It is vitally important to understand these differences as a Practitioner.

First up our summary of costs entitlement, followed by a deep dive.

What costs am I entitled to? - Speed Read

MOJ Portal

Under CPR 45.31, if the court approves the settlement the Claimant is entitled to £650 plus VAT. Additional costs may be permissible where there is more than one approval Hearing.

Disbursements arising from a particular feature of the dispute or requirement of the rules are also permissible in principle. These are subject to the wide ambit of judicial discretion.

Fast Track

No express additional fixed costs. Reasonably incurred disbursements permissible (where non-Portal), if commenced on the Portal (and exited) then disbursements due to a particular feature or requirement of the rules are permissible in principle.

Intermediate Track 

Stage 15 of Table 14, PD 45 permits the following additional fixed costs:

A) Complexity Band 1 -  £1,239 plus VAT

B) Complexity Band 2 - £1,445 plus VAT

C) Complexity Band 3 - £1,755 plus VAT

D) Complexity Band 4 - £2,065 plus VAT

Disbursements as per CPR 45.60, "the court may allow any disbursement which has been reasonably incurred, other than a disbursement covering work for which costs are already allowed".

Deep Dive

MOJ Portal

In claims subject to the MOJ Portal costs regime, the costs of approval advice and attendance at an infant approval Hearing generally form part of the Stage 3 costs. These are additional costs.

This is expressly dealt with at CPR r45.31 which provides that where the court approves the settlement the Defendant shall pay:

(i)the Stage 1 and 2 fixed costs;

(ii)the Stage 3 Type A, B and C fixed costs; and

(iii)disbursements allowed in accordance with Section IX of this Part.

Stage 1 and 2 costs would be payable anyway, the additional Stage 3 costs are £650 plus VAT and apply to RTAs and EL/PL claims.

What is clear is that the rules recognise that additional work is required to obtain court approval, however modest the sums allowed for that work may be. In addition, CPR 45.58 permits a claim for “any other disbursement reasonably incurred due to a particular feature of the dispute or any requirement of these Rules.” There is a cogent argument to make that approval advice and the approval hearing are both a requirement of the rules and therefore any counsel input ought to be recoverable in principle.

This is a shift from the pre-October 2023 rules which allowed additional disbursements incurred due to a ‘particular feature of the dispute’ which caused concern amongst many when the Court of Appeal in Aldred v Cham ruled that age was a characteristic and not a particular feature of the dispute.

Aldred, however, exposes some of the rougher edges of the fixed costs regime. The Court examined what work was already encompassed within the fixed costs allowed, and a common argument advanced by paying parties is that counsel's fees relating to an Infant Approval are already captured by the fixed recoverable costs.

It also raises important public policy issues. If such fees are ultimately found not to be recoverable in addition to fixed costs, a legitimate question arises as to whether these claims can continue to be run commercially. If the answer is ultimately no then real access to justice concerns surface.

As it was rightly addressed in the original Court of Appeal decision in Santiago v MIB, costs should be viewed through the prism of access to justice.

Intermediate Track Fixed Recoverable Costs

The Intermediate Track under PD 45, Table 14 includes a specific bolt-on for approval work at S15. It ranges from £1,239 under CB1 to £2,065 plus VAT on CB4. There may be some scope to argue disbursements using CPR 45.60, "the court may allow any disbursement which has been reasonably incurred, other than a disbursement covering work for which costs are already allowed". However, this provision only permits the court to allow a disbursement for work that is not already covered by the costs allowed. Given there are separate fixed bolt-ons for approval work then you would need to distinguish any disbursement claim from the work covered by the fixed bolt-on, not an easy task.

Fast Track Fixed Recoverable Costs - The Odd One Out

Is it right that a minor can only recover the same costs as a litigant who requires no court approval, prospectively opening the door to higher shortfalls simply by reason of vulnerability alone?

What is curious about Fast Track fixed recoverable costs is that if you follow Table 12 under Practice Direction 45 there is no prescribed sum for either approval Advice or an approval Hearing.

This is curious because both the MOJ Portal and Intermediate Track regimes contain express allowances for infant approval work. It is unclear why no equivalent provision exists for Fast Track cases.

CPR 45.59 addresses disbursements permissible on the Fast Track. Amongst the list of recoverable expenses it permits:

"(b)in any other claim to which Section VI applies, any disbursement which has been reasonably incurred, other than a disbursement covering work for which costs are already allowed in Section VI."

So in principle if you instruct Counsel for Advice and to attend any approval hearing you could argue that it is a reasonably incurred disbursement.

If the claim started under the MOJ Portal and then exited the Portal then the disbursement rules governing CPR 45.58 apply. 45.58(f) permits recovery of:

"(f)any other disbursement reasonably incurred due to a particular feature of the dispute or any requirement of these Rules."

Again, this arguably opens the door to the recovery of counsel's fees for approval advice and attendance at an approval Hearing.

But what if the approval advice is prepared by the solicitor, or the solicitor personally attends the approval Hearing? On the Fast Track you're out of luck unless you can invoke the tests for costs exceeding FRC due to either vulnerability or exceptional circumstances. Infancy alone is unlikely to trigger exceptional circumstances, whilst the test for vulnerability requires you to spend 20% or more time on the case due to the vulnerability alone (CPR 45.10). Protected Parties are exempt from FRC but children are not.

So on Fast Track there are disbursement arguments but Aldred v Cham showed that under the former fixed costs regime the Court can view such work as following under the existing fixed costs and as such outsourcing to counsel would not be recoverable in addition.

The situation is highly unsatisfactory. If the solicitor does the advice and attends the approval Hearing then the starting point is that there is nothing additional and if you instruct counsel then the recovery is subject to judicial discretion.

If you're confused, you're not alone: the obvious question

Why are there express carve-outs in the Portal and Intermediate Track regimes, but not in the Fast Track?

And why should a claimant lose entitlement to additional fixed costs simply because a claim exits the MOJ Portal and proceeds under the Fast Track fixed recoverable costs regime?

Why is Fast Track different?

Sir Rupert Jackson's Review of Civil Litigation Costs: Supplementary Report 2017 concluded by recommending that there should be fixed recoverable costs for "applications to approve settlements for children and protected parties".

Part 45 excludes Protected Parties but Jackson's recommendation for FRC for infant approval does not appear to have been incorporated into the Fast Track rules.

Another comparison is the proposals published for fixed costs in Clinical Negligence with a settlement value of less than £25,000. The proposals at least included a fixed bolt-on for cases involving Protected Parties or Children of £1,800. A recognition of the fact that such cases do entail additional work.

These two points exemplify and expose the tensions. A recognition that additional work is generated in cases involving children yet no simple or express way has been incorporated into the Fast Track.

Access to Justice?

Whichever side you sit on, Claimant or Defendant, it must be universally acknowledged that these are claims involving some of the most vulnerable litigants and therefore supporting access to justice is of paramount importance.

The Impact Assessment for the extension of the fixed recoverable costs is remarkably quiet on the impact upon Children though acknowledges certain vulnerabilities may require additional support. The Impact Assessment for the under £25,000 FRC for Clinical Negligence recognises there are additional costs and states that "these higher costs may lead to claims from these individuals becoming unviable for solicitors or potentially under-investigated, leading to under-compensation for claimants."

So there are additional costs for children cases and it seems an obvious gap in Fast Track. It remains to be seen whether the Ministry of Justice will address this issue. However, by leaving the issue unresolved, there is a real risk of undesirable consequences for access to justice.

Do you have a dispute concerning approval costs in a fixed costs matter, then get in touch with us! We are always happy to talk any aspect of costs. If you have any issues or concerns over solicitor client charges or deductions then please get in touch for an informal chat - call 01482 534567 or email info@carterburnett.co.uk