Multi-Track Allocation Retrospectively Disapplies Fixed Costs (even where Part 36 offer was accepted late)
Posted on 14th April 2025 at 22:36
If a claim is commenced on the Portal under the pre October 2023 fixed costs rules and settles prior to allocation then fixed costs apply as per Qader. But what applies when a Part 36 offer, where the relevant period expires before allocation, is subsequently accepted late after allocation to the Multi-Track. The High Court has considered this issue in the case of Attersley v UK Insurance Ltd [2025] EWHC 884 (KB) (11 April 2025) with the Defendant essentially contending fixed costs should apply on the basis this is what would have applied at the time the offer was made whilst the Claimant contended that the allocation to the Multi-Track retrospectively disapplied the fixed costs rules. There was also an argument around the interpretation of Part 36.20.
There remains a cautionary warning whilst the High Court ultimately found that fixed costs would be retrospectively disapplied by the Multi-Track allocation, the Claimant would also be deprived of costs post-expiry and have a liability for costs post-acceptance (subject to QOCs). Prospectively this could be a costly outcome and in some circumstances assessment of costs may be less advantageous than fixed costs.
Here the matter was an RTA claim which had commenced through the Portal and was subsequently issued by Part 7 with a value of up to £150k. Around a year before allocation the Defendant made a Part 36 offer of £45k which was accepted shortly after allocation to the Multi-Track.
In short the decision can be summarised as follows:
- Once a claim is allocated to the Multi-Track under the pre October 2023 rules fixed costs are disapplied. Allocation has retrospective effect. Fixed costs were never intended to apply to Multi-Track claims.
- Position remains unclear for post October 2023 rules as per our previous blog.
- It was not appropriate to assess the costs at a level commensurate with fixed costs (as per Williams). Late acceptance of a Part 36 offer was different to an unreasonable failure to follow the protocol. Part 36 already has a sanction for late acceptance in that the Claimant is deprived of some of its costs and has a liability for some of the Defendants.
The court considered as follows:
"How do CPR 45.29B and 36.20(4) mesh together in this case? On the one hand, the claim had been allocated to the multi-track at the time of the offer's acceptance which would, on the face of it, take the case out of the scope of Section IIIA of Pt 45 and consequentially Pt 36(20)(4) entitling the claimant to assessed costs. On the other hand, when the offer had been made and when the notice of acceptance should have been served, Section IIIA of Pt 45 and Pt 36(20)(4) were engaged as the case was not allocated to the multi-track at that particular moment in time, entitling the claimant only to fixed costs subject to any exceptional circumstance she might be able to establish under Pt 45.29J."
Further it was stated that:
"It was common ground that if the claimant had accepted the offer by the date for acceptance she would have only been entitled to her fixed costs subject to CPR 45.29J (claims for an amount of costs exceeding fixed recoverable costs in exceptional circumstances). It was also common ground that ordinarily the claimant should pay the defendant's costs from the end of relevant offer period onwards, although since this was a claim for personal injury it would be unenforceable because of the QOCS regime (Qualified One Way Costs Shifting). No justification had been put forward explaining why the claimant had not accepted the offer in time so as to displace the normal order."
It was held that:
"I agree with the conclusion of the judge below that the fixed costs regime is disapplied retrospectively on allocation to the multi-track for the reasons he states at [14] and [15] of his judgment. This is clear from the wording proposed by Briggs LJ in Qader [56] and adopted; the fixed recoverable costs only apply "for so long as the claim is not allocated to the Multi-Track". The effect is then, that costs payable when the Part 36 offer were accepted are costs on the standard basis."
And further that:
"The general rule set out in 45.29A that cases that have started in, but have then exited a relevant Protocol, are subject to the fixed costs regime is subject to an exception if and once a case has been allocated to the multi-track: the fixed costs regime applies only "for as long as the case is not allocated to the multi-track." (CPR 45.29B). It therefore follows that on allocation to the multi-track costs fall to be assessed in accordance with Pt 44 and are not fixed and calculated by reference to the tables. So far so good for a plain and ordinary meaning to be gleaned from the words from a literal interpretation. But when the provisions of Part 36 come into play and the general rule as to the costs consequences of the timing of acceptance of a Part 36 offer does not apply "where the recoverable costs are fixed by these Rules" (36.13(3)) it becomes a little harder to follow. The wording of CPR 36.20(1): "This rule applies where – (a) a claim no longer continues under the RTA or EL/PL Protocol pursuant to rule 45.29A" does not refer to rule 45.29B. Mr Roy describes this as an unambiguous and unqualified self-contained definition of the scope of CPR 36.20 and is therefore not subject to CPR 45.29B.
I am however dubious about Mr Roy's literal construction points. An equally possible, and to my mind more natural reading of the provisions arrives at the contrary conclusion. The plain and natural meaning of the words of 45.29A and B is that the general rule that cases that have started in, but then exited a relevant Protocol are subject to the fixed costs regime (45.29A), is subject to an exception when a case has been allocated to the multi-track. The fixed costs regime applies only "for as long as the case is not allocated to the multi-track." (CPR 45.29B). It therefore follows that on allocation to the multi-track costs fall to be assessed in accordance with Pt 44 and are not fixed and calculated by reference to the tables. When a Part 36 offer is made, the provisions of Part 36 come into play. The general rule as to the costs consequences of the timing of acceptance of a Part 36 offer are set out in Pt 36.13. The general rule does not apply where the recoverable costs are "fixed by these Rules" (36.13(3)). Part 36.20 is one such exception to that general rule where Section IIIA of Part 45 applies. The wording of CPR 36.20 is explicit, it sets out the "Costs consequences of acceptance of a Part 36 offer where Section IIIA of Part 45 applies". However, since the effect of 45.29B is to disapply the fixed costs regime where an ex-Protocol case has been allocated to the multi-track, section IIIA of Pt 45 does not apply. It is therefore an exception to the exception and costs fall to be assessed under the principles in r. 36.13.
Under the principles in 36.13, the claimant was therefore entitled to her costs to be assessed up to the end of the relevant period. CPR 36.20 did not therefore apply to this case at the moment when the Pt 36 offer was accepted."
The High Court concluded as follows:
"I allow the appeal. The claimant's costs must now be assessed, if not agreed, up to the end of the relevant period on the standard basis in the normal manner under Part 44 in the County Court at Southend where both parties will be able to make the various points they wish to rely on and appropriate findings can be made. It is not appropriate for this court to lay down any guidance, general principles or presumptions about how the assessment of costs in cases of this nature should be conducted."
The decision gives certainty that where a claim is allocated to the Multi-Track the costs implications must apply retrospectively even if an offer was made pre-allocation and accepted late after allocation. It remains open to the court to consider conduct issues but late acceptance is not necessarily unreasonable conduct.
There remain questions about the approach for post October 2023 cases where the application of Qader appears to have fallen away.
And practitioners need to remain alive to the adverse costs consequences of late acceptance.
Nonetheless, this is an interesting decision and highlights the retrospective effect of a Multi-Track allocation on the basis upon costs can be claimed.
Should you have any queries arising from this article or upon costs generally then please do not hesitate to get in touch with our friendly team. You can also discuss details of our unlimited Fixed Costs retainer service which is priced from only £500 per month for any and all fixed costs disputes within in your firm. Please email FRC@carterburnett.co.uk for details or call 01482 534567 for an informal discussion.
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