Protected Parties and Fixed Costs

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This blog examines the position regarding Protected Parties and Fixed Costs under both the post-October 2023 Fixed Recoverable Costs regime and the pre-October 2023 rules. A number of scenarios are considered, and the answers are not always straightforward.

Protected Parties are among the most vulnerable court users and will generally require additional time and support from their legal representatives. Fixed costs can present a barrier to access to justice for such individuals. If the recoverable costs are set too low, legal representatives may be unable to provide a viable service, or Protected Parties may be left with a more significant shortfall than a non-Protected Party in an equivalent case.

It’s therefore important for litigators working on Protected Party cases to understand the costs implications. This is what this blog seeks to consider and address.

Post October 2023 - Are Protected Parties exempt from Fixed Costs?

The extension of Fixed Recoverable Costs in October 2023 saw extensive changes to Part 45 of the Civil Procedure Rules. Broadly speaking a Protected Party will be exempt from Fixed Recoverable Costs where the post-October 2023 rules apply. There is one limited and discrete exception.

CPR 45.1(6) provides that:

“Section VI, Section VII and Section VIII of this Part do not apply where a party is a protected party.”

Put more simply, Fast Track Fixed Recoverable Costs, Intermediate Track Fixed Recoverable Costs and Noise-Induced Hearing Loss Fixed Recoverable Costs are disapplied, meaning costs will generally be assessed on the standard basis.

Notably, there’s no reference to the MOJ Portal.

The Pre-Action Protocol for Low Value Personal Injury (Employers’ Liability and Public Liability) Claims 4.3(2) is clear that the Protocol does not apply where the Claimant or Defendant is a Protected Party. In other words, EL and PL claims involving a Protected Party cannot be brought through the Portal. As such, the starting point will usually be allocation to either the Fast Track, Intermediate Track or Multi-Track and by extension the FRC exemption under CPR 45.1(6) would apply for FT and IMT matters whilst for MT matters FRC would not apply anyway.

The Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents from 31 July 2013, however does not exempt Claimant Protected Parties. At 4.5(4) a claim under this Protocol is only exempt where the Defendant is a Protected Party. It is not quite this straightforward as 4.1A(2) sets out that where a claim consists of or includes a claim for whiplash injury the “Protocol does not apply where the claimant is a protected party”.

At this stage you might be wondering what this all means and why it is relevant. If a Protected Party were not exempt from the MOJ Portal then that means that Portal Fixed Costs could apply. The CPR 45 exemption only applies once the claim exits the Portal. It is important, therefore, to discern when bringing an RTA claim if it is exempt or not. The costs consequences could be significant for all parties.

The RTA Protocol indicates that a Claimant Protected Party is only exempt from it where the claim consists of or includes a claim for whiplash injury. Section 1.1(20) defines ‘whiplash injury’ as:

(20) ‘whiplash injury’ or ‘whiplash injuries’ means an injury or injuries of soft tissue in the neck, back or shoulder suffered because of driver negligence as defined in section 1 of the Civil Liability Act 2018 and as further applied by section 3 of that Act to claims where the duration of the whiplash injury or any of the whiplash injuries—

(a) does not exceed, or is not likely to exceed, two years; or

(b) would not have exceeded, or would not be likely to exceed, two years but for the claimant’s failure to take reasonable steps to mitigate its effect.

So Post October 2023, a Protected Party is exempt from fixed costs so long as Portal fixed costs do not apply and those can only feasibly apply to specific claims under the RTA Protocol. The only exit mechanism therefore, if Portal fixed costs do apply, is to bring a claim for costs exceeding fixed recoverable costs on the grounds of exceptional circumstances, as per CPR 45.9. The test for vulnerability does not apply to Portal claims. There are questions marks as to whether a court would find that vulnerability is an exceptional circumstance but there are compelling access to justice arguments as to why it ought to be.

What about if my client loses capacity during the claim? - Pre-and-Post October 2023

It’s possible that a claim starts under the MOJ Portal or within the Fast or Intermediate Tracks and the Claimant loses capacity.

It is not clear if the exemption under CPR 45.1(6) would apply retrospectively.

The unreported decision in Hilton v Proudfoot and Another, Middlesbrough County Court, Claim No E03 YX 717, 15 April 2019 may point us in the direction of how the court may address such a scenario.

In Hilton the Claimant passed away after commencement of the claim on the MOJ Portal. In relation to RTA and EL/PL claims a case brought by or against a Deceased person cannot be dealt within the relevant MOJ Protocols. The court, therefore, had to consider whether fixed costs applied (given the claim had been brought on the Protocol in the first place prior to the Claimant’s death) or whether the death meant the Protocol couldn’t apply and therefore it could not be fixed costs.

The court found a halfway house. Chiefly, fixed costs would apply whilst the claim remained validly within the Protocol but once the Claimant had passed away the Protocol claim was in effect stayed or terminated and as such it followed that fixed costs could not apply to it.

Prima facie, the court may adopt a similar approach where capacity is lost during the claim and, as a result, the claim could no longer have been validly pursued within the Protocol. This approach presumably reflects the fact that such cases are more complex and therefore require additional work and time from legal representatives.

This can also be applied to pre-October 2023 cases as a claim which is not suitable or capable of running through the Portal would generally speaking sit outside fixed costs as the only way into FRC would be to commence in the Portal and exit it. If the claim is not suitable for the Portal or can’t be brought into it then the conclusions in Hilton have force.

Post-October 2023 - What if my Protected Party client dies or regains capacity during proceedings or has fluctuating capacity?

This raises another interesting question. Assuming the case is initially exempt from FRC by virtue of CPR 45.1(6), that exemption only applies while a party remains a Protected Party. If the party subsequently regains capacity, it is likely that the exemption would fall away.

A Hilton-style approach may be adopted, whereby the exemption applies only for the period during which the party is a Protected Party, with fixed costs applying thereafter. This could lead to some interesting gymnastics when it comes to working out what fixed costs actually apply.

There is also the possibility of seeking costs exceeding FRC by virtue of exceptional circumstances or vulnerability.

A third avenue is to seek Multi-Track allocation on the grounds of CPR 26.9 which gives the court discretion on allocation where there are additional factors making a claim unsuitable for a different track.

All three options are likely to have merit, particularly where there is fluctuating capacity. It would become incredibly complex to apply and disapply different costs regimes based on whether or not a party had capacity at a given time.

Pre-October 2023 - What fixed costs apply to a Protected Party?

The position is broadly similar to that post-October 2023, in that so long as the Protected Party is exempt from the relevant Protocol, fixed costs cannot apply. This means it would only be limited cases under the RTA Protocol (see Post October 2023 - Are Protected Parties exempt from Fixed Costs?) where fixed costs may feasibly apply. There remains the option in those cases to seek costs under what was CPR 45.29J which allows a claim for greater than fixed costs where there are exceptional circumstances.

The Court of Appeal decision in Santiago v MIB [2023] EWCA Civ 838‍ emphasised the importance of viewing costs through the prism of access to justice for a non-English speaking litigant. It is to be hoped that the same approach will be adopted when determining disputes concerning Protected Parties and Fixed Costs.

We are always happy to talk any aspect of costs. If you have any issues or concerns over the court fee changes then please get in touch for an informal chat - call 01482 534567 or email info@carterburnett.co.uk