An extremely interesting judgment looking at various aspects the interpretation of the post October 2023 Fixed Recoverable Costs regime. In MIL Collections Ltd v My Shop 4 Ltd & Ors [2025] EWCC 38 (04 July 2025) DJ Field considered what Fixed Recoverable Costs apply where there are multiple Defendants and where some of those Defendants were Litigants in Person. Specifically the court looked at whether there was an entitlement to FRC where a claim was struck out and if so what that entitlement would be, together with the approach to multiple Defendants and Litigants in Person. The upshot is that here each Defendant was awarded costs, even though there are provisions in Part 45 for circumstances where multiple Claimants may be limited to one set of fixed recoverable costs and a 25% uplift upon the same.
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Speed Read
As ever the key points are summarised below:
1. Where a claim is struck out then the Defendant will be entitled to Fixed Recoverable Costs. Here the court awarded Fast Track Fixed Recoverable Costs as per Table 12 in PD 45.
2. Where there are multiple Defendants then each Defendant is entitled to separate Fixed Recoverable Costs though the court retains discretion to only order a portion of the Defendants' costs to be paid.
3. Where Litigants in Person are completely unrepresented in matters to which FRC applies then assessment of their costs should take place in accordance with CPR 46.5(3). This is subject to a cap of 2/3s of the applicable FRC. Litigants in Person should provide evidence of any financial loss incurred in responding to the litigation and a statement of costs or similar schedule setting out the time spent engaging with the litigation.
4. Where Litigants in Person are partially represented (i.e. represented for some of the claim) then for any stages where there is self-representation and solicitor representation the FRC will also be capped at 2/3s. For any stages where the LiP is completely represented these stages should apply as per the FRC. Here the sums payable to the solicitor proved financial loss and therefore the full cap was allowable (the FRC entitlement less 1/3).
5. If you are going to ask the court to apply the sanction for Unreasonable Behaviour you must have evidence that the conduct has specifically increased costs. Under the Fixed Costs Determination / Summary Determination process, the Precedent U (Statement of Fixed Costs) prescribes that an N260 (Statement of Costs) should be prepared in such circumstances.
The claim is also a reminder as to the discretion of the court on both allocation and assignment. Here the claim passed the stage whereon directions had been given but was found to have concluded before the date listing trial. The total costs allowed for the 13 Defendants came out at £4,904.34.
Background
By way of background the claim related to the recovery of debts against 13 Defendants. The claims varied in amount and the Defendants' largely adopted the same Defence. The total value of the 13 consolidated claims was around £335,000. The court allocated the consolidated claim to the Fast Track, Complexity Band 1 recording that "the court notes that, since the claims are consolidated and will be listed for excess of 1 day, there may be exceptional grounds upon more than the fixed costs under Table 12 of PD 45 may be awarded".
The Claimant's Particulars of Claim were found to be defective and an unless order was made. Unfortunately for the Claimant the Amended Particulars of Claim were also held to be deficient and on this basis it was held that the unless order had not been complied with. The claim was automatically struck out. The Claimant subsequently submitted a failed relief from sanctions application.
All parties to the claim were unrepresented until 19 May 2025, acting as Litigants in Person previously. The 1st to 11th Defendants' sought two thirds of the fixed costs in Table 12 pursuant to CPR 45(2)(a) and the 12th & 13th Defendants sought the costs of the hearing for the failed relief application and their fixed costs in full following the strike out of the claim.
The court had to consider the following issues:
a. The extent to which the fixed costs provisions apply at all in relation to a claim which is struck out;
b. The applicable amount of fixed costs (it not being clear whether the appropriate stage in Table 12 of Practice Direction 45 is determined by reference to the order for a trial date or by reference to the trial being actually listed);
c. Whether, where there is more than one defendant, each defendant is entitled to recover fixed costs in their own respect.
d. Any entitlement to fixed costs in respect of unrepresented parties.
The Decisions
The court considered each of the four issues and held as follows:
1. Do Fixed Costs Apply where a claim is struck out? Where a claim is struck out before a Trial a Defendant is entitled to their Fixed Recoverable (either Fast or Intermediate Track) with reference to the stage of the proceedings at which the strike out took effect.
2. What amount of Fixed Costs apply? Here the order allocating the claim to the Fast Track dated 28 April 2025 had provided that "the trial of this claim shall take place on the first available date (to be advised by separate order) after 24 June 2025 with a provisional time estimate of 2 days". The claim was struck out on 13 May 2025 and the notice listing the case for trial was made on 19 May 2025. The Court determined that this could not be considered the listing of the claim for trial to reach stage B(3) of Table 12 (Fast Track FRC) which applies where the claim concludes "on or after the date that the court lists the claim for trial but before trial". DJ Field stated that:
48. The 12th and 13th Defendants draw a distinction between the "listing" of a trial and the "fixing" of a trial. They refer by analogy to paragraph 6.58 of the Chancery Guide:
"Trials are normally listed with a commencement date floating within a 3-5 day period, referred to as a trial window, but the court may (exceptionally) consider listing the trial for a fixed start where certain criteria are met. These will include such matters as the length of the trial, the number of parties and witnesses, and the need for parties or witnesses to travel from abroad to attend trial"
49. The difficulty with that submission is that in the vast majority of Fast Track cases, the first case management order will provide for both allocation and provision for the trial to be listed either within a window or on the first available date after a particular date. Indeed the standard orders produced by the damages claim portal and the online money claims portal are drafted in this way.
50.Were this' submission to be correct, it would be mean that in the vast majority of cases the stage between allocation and listing would be non existent. That cannot have been the intention of those drafting PD45. The increase in fixed costs between stage B(2) and B(3) must be intended to reflect that it is roughly between the allocation order and the notice of trial that the parties be undertaking work on disclosure and witness evidence and so on.
51. I consider therefore that, in the circumstances of this case, the trial was listed on 19 May 2025 and the case concluded by automatic strike out before that date, on 13 May 2025. As such, the applicable stage in Table 12 is B(2)."
3. What entitlement to Fixed Recoverable Costs do multiple Defendants have? As I have written about previously whilst there are specific rules governing the approach to multiple Claimants the position with multiple Defendants is more ambiguous. The court reflected this in its considerations. In short it determined that where there a multiple Defendants they would each be entitled to their own separate Fixed Recoverable Costs, though the court would have the discretion to make an order that a party pays only a proportion of another party's costs. DJ Field considered this point as follows:
56. Since those drafting the new Part 45 chose not to expressly address the fixed costs entitlement of the multiple Defendants (as they have done with Claimants), the correct approach is that which was undertaken by HHJ Glenn in Melloy: to read the relevant rules in the context of the purpose of the extended fixed recoverable costs regime.
57. CPR 45.1(3) provides that the court cannot make an award which is less than or more than the fixed costs in PD45, save where it makes an order in the form contemplated by CPR 44.2(6)(a) (i.e an order that a party pay a proportion of another party's costs). Beyond that exception and any other exceptions expressly set out in Part 45 the court may only award the fixed costs.
58. There is nothing within the wording of CPR 45.44, 45.45 nor Table 12 which can fairly be read to indicate one way or the other as to whether in multi-Defendant cases each Defendant should be entitled to fixed costs.
59. The answer therefore must be drawn from the following principles:
a. If the rule makers intended to deviate substantially from principles which would ordinarily apply in respect of costs, this would be dealt with expressly in the rules;
b. CPR 45.44, 45.45 and Table 12 should be read in the context of the remainder of Part 45 and PD 12; and
c. So far as is possible, CPR 45.44, 45.45 and Table 12 should be read in a way which is consistent with the purpose of the Fast Track fixed costs regime, being to provide a means to quantify costs entitlement that is certain and easily calculated and which limits recoverable costs to those which are proportionate.
60. Taking those principles in turn:
a. Outside of the fixed recoverable costs regime, where a claim is unsuccessful and there are multiple Defendants, the general rule would be that each Defendant should be awarded their costs of the proceedings. There is nothing in the CPR 45 or PD45 which would expressly disapply that general approach.
b. Whilst CPR 45.54 does expressly provide for the circumstances in which multiple Claimants may be restricted to one set of fixed costs, there is no equivalent provision for Defendants. Had those drafting the rules intended that multiple Defendants should share a single entitlement to fixed costs (or similar) then an equivalent provision would have been included within the rules.
c. Whilst allowing each Defendant to recover the fixed costs in Table 12 increases costs and therefore risks costs becoming disproportionate, leaving a discretion or ambiguity as to whether multiple defendants (who may be separately represented and have opposing interests) will each have an entitlement to fixed costs would be contrary to the purpose of providing certainty and simplicity.
61. In my judgement, having regard to the above, in a case to which Part VI of Part 45 applies in which there are multiple Defendants, each Defendant is entitled to their fixed costs as set out in Table 12 of PD45, subject to the court's discretion to make an order under CPR 44.2(6)(a) that a party pay only a proportion of another party's costs.
62. Whilst not expressly stated within Part 45, it must be that in deciding whether to make an order for a party to pay only a proportion of another party's costs, the court should take into account those matters in CPR 44.2(4), namely:
"all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply."
63. I do not consider that the fact that an award of two sets of fixed costs might produce a windfall for the Defendants is a relevant circumstance which should carry significant weight. As HHJ Glenn held in Melloy, "Whilst that may be so, it is of the essence of any fixed costs regime that there will be swings and roundabouts. The outcome cannot inform the construction except in the most exceptional case".
64. Much more relevant in my judgment are the following circumstances and matters of conduct:
a. The claims began as separate claims by the Claimants and were only consolidated as a result of an order of the court's own motion for reasons of efficient case management as described earlier in this judgment;
b. When issuing each of those claims, the Claimant will have been aware that in the event the claims were unsuccessful, it would be liable for the Defendants' fixed costs in each of those claims; and
c. The court could have ordered that the case should be case managed and tried together, rather than that they be consolidated. In these circumstances fixed costs would undoubtedly have been payable to each successful Defendant. It would be arbitrary if there were substantially different consequences depending on whether the claims had been consolidated or simply case managed and tried together; and
d. The claims have been struck out for breach of an unless order. At its core, the reason that the unless order was made, that it was breached, and that the application for relief was refused was that the Claimant chose to embark upon this litigation at a time when it held insufficient information and documents to undertake any form of assessment of the merits of the claims or to properly plead those claims. Such conduct militates against the making of an order under CPR 44.2(6)(a) to alleviate the consequences of the fixed costs regime.
65. Taking those circumstances and conduct into account, I am satisfied that the appropriate order is that each Defendant is entitled to an award of costs in its favour to reflect the general rule that an unsuccessful party shall pay the successful party's costs.
4. Fixed Recoverable Costs entitlement of Litigants in Person / Unrepresented Individuals - The court finally considered the entitlement of Litigants in Person to FRC. Part 45 provides that Litigants in Person will be entitled to no more than 2/3s of the fixed recoverable costs permissible. This is consistent with the 2/3s rule in non-fixed costs proceedings involving litigants. Here the court held that the 2/3s of fixed recoverable costs was a limit and not a fixed entitlement. DJ Field held that the net result was that it would be necessary to carry out an assessment of the costs of what each of the 13 Defendants were entitled to pursuant to CPR 46.5.
The position as to the various Defendants differed and had to be considered accordingly.
- For the 12th & 13th Defendants they had engaged solicitors to assist with their case and on this basis the court held that the Fixed Recoverable Costs less 1/3 would be recoverable namely £2,581 plus VAT for the stage reached limited to £1,720.67 plus VAT.
- For the 1st to 11th Defendants the court rejected their argument that they should receive an award equivalent to the cap of two thirds of the fixed costs. DJ Field stated to to do so he'd have to be satisifed that either "the Defendants had incurred financial losses in this sum, paid for legal services in this sum or that they are likely to have spent at least 91 hours engaging with the litigation (£1,720.67 / £19.00 = 91 hours)."
Here the court held that on the evidence available and given the stage of the proceedings reached that it was "more likely than not that each Defendant [...] had to spend at least 7 hours on this litigation". Consequently, costs in the sum of £133 (7 hours at £19.00 per hour) was allowed.
5. Were the Defendants entitled to an uplift on the Fixed Recoverable Costs due to the Claimant's conduct? The court did not award an uplift for unreasonable conduct (equivalent to 50%) on the basis that the Defendants had not raised this issue previously and secondly the Claimant had already been penalised through the striking out of their claim and thirdly there was no evidence to show the Claimant's conduct had specifically increased the costs of the 12th & 13th Defendants or the time which had been spent by the other Defendants.
The court ordered the Claimant to pay the Defendants' costs within 14-days, totalling £4,904.34 for the 13 Defendants.
Practical Points
A number of practical issues arise which Practitioners should be aware.
Firstly where a claim is subject to Fixed Recoverable Costs and is struck out then adverse costs will apply. Here the court specifically looked at Table 12 for the Fast Track but it ought to be anticipated that the same conclusion can be transposed to the Intermediate Track.
Secondly, in claims involving multiple Defendants the starting point will be that each Defendant is entitled to separate Fixed Recoverable Costs unless the court considers that an order should be made that a party only pays a proportion of another party's costs taking into account matters under CPR 44.2(4).
Thirdly, that the costs entitlement of a Litigant in Person under FRC will be assessed as per CPR 46.5 and the court will have regard to any evidence of financial loss and statement of costs or schedule setting out the time spent engaging with the litigation. It is important for any Litigants in Person to ensure, even in a fixed costs case, this evidence is available at any hearing or trial where costs may be dealt with.
Further, the costs entitlement of a Litigant in Person will be capped at 2/3s of the applicable Fixed Recoverable Costs where that Litigant was unrepresented for any part of a stage. If they are represented for the entirety of a stage then this would entitle them to the full FRC of that stage. This means the arithmetic could quickly get complex.
Fourthly, where a Litigant in Person has sought some legal representation then this would be accepted as some evidence of financial loss and will likely assist an argument that the full extent of the cap should be allowed. This strengthens the need for a schedule of costs of some description.
Fifthly, if you're applying for unreasonable conduct and therefore an uplift on the recoverable costs then you need to have evidence that the paying party's conduct has given rise to additional costs. Indeed, this is likely why the Precedent U specifies on it that where the unreasonable behaviour sanction is sought the receiving party should prepare an accompanying N260.
Finally, the case highlights the power of the court's discretion, here the totality of the value of the claims exceeded £300,000 and involved 13 separate Defendants. Despite this the claim was allocated to the Fast Track and assigned to Complexity Band 1 curtailing the parties' recoverable costs to Fixed Recoverable Costs. The total costs allowed were £4,904.34 for all work undertaken by all 13 Defendants.
For the 12th & 13th Defendants they were permitted Fixed Recoverable Costs of £1,720.67 (2/3s of the applicable FRC). They had submitted N260s from their solicitor confirming that they were each liable to pay the solicitor £3,923. The net result is that the 12th & 13th Defendants succeeded in striking out the Claimant's claim but have still been left with a shortfall of £2,202.33 each for the privilege. Shortfall is obviously not a new phenomenon but the point is that if the Litigant in Person had been represented throughout then the full Fixed Recoverable Costs would have been recoverable (in principle).
If you have any queries about a Fixed Recoverable Costs claim then do not hesitate to get in touch. You might also find our unlimited Fixed Costs Retainer service of interest (starting from £500 per month), more information is available here. 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 either via phone 01482 534567 or e-mail info@carterburnett.co.uk
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