Cost News

Jack Andrew

 

Woodward -v- Hyder

The above heading represents an interesting question sometimes asked by clients. If a fixed costs case is unsuccessful from a Claimant’s perspective, is the Defendant entitled to costs on an hourly rate basis or are they fixed?

 

Woodward -v- Hyder

Well, the recent Court of Appeal decision in Woodward -v- Hyder (November, 2018) provides for some interesting reading. In this case, the Claimant’s Solicitors had proceeded with an interim application for which they were ultimately unsuccessful. The corresponding rules for interim applications are contained within CPR 45.29H, as follows: –

(1) Where the court makes an order for costs of an interim application to be paid by one party in a case to which this Section applies, the order shall be for a sum equivalent to one half of the applicable Type A and Type B costs in Table 6 or 6A.

(2) Where the party in whose favour the order for costs is made—

(a) lives, works or carries on business in an area set out in Practice Direction 45; and

(b) instructs a legal representative who practises in that area,
the costs will include, in addition to the costs allowable under paragraph (1), an amount equal to 12.5% of those costs.

(3) If an order for costs is made pursuant to this rule, the party in whose favour the order is made is entitled to disbursements in accordance with rule 45.29I.

(4) Where appropriate, VAT may be recovered in addition to the amount of any costs allowable under this rule.

The above CPR was thus firmly engaged in the case, although, in the first instance decision after the Claimant’s application was determined to be unsuccessful, the Defendant were awarded costs and they were assessed in the sum of £2,443.00, ignoring the provisions of CPR 45.29H. This practice however is not uncommon and during contested pre-action disclosure applications for instance, Defendant’s will routinely serve cost schedules.

The above decision however makes it abundantly clear in the absence of any exceptional circumstances type argument, the Defendant too are subject to fixed costs and as such the Defendant’s award was reduced from £2,443.00 to the sum equivalent to one half of the applicable Type A and Type B costs as contained in Table 6A of Part 45.

 

Conclusion

Certainly, with respect to interim applications the question is solved, however there remains outstanding questions whether fixed costs extend in other circumstances, such as when a Defendant Part 36 offer is accepted out of time; should they be limited to the corresponding column of Table 6B/C/D akin to how the Claimant would be under CPR 36.20 (4) (a)?