J C and a Solicitors Ltd v Andeen Iqbal and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Briggs,Flaux LJ,McFarlane LJ |
| Judgment Date | 16 May 2017 |
| Neutral Citation | [2017] EWCA Civ 355 |
| Docket Number | Case No: A2/2016/1422 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 May 2017 |
[2017] EWCA Civ 355
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CARDIFF CIVIL AND FAMILY
JUSTICE CENTRE
District Judge T M Phillips
b44ym322
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice McFarlane
Lord Justice Briggs
and
Lord Justice Flaux
Case No: A2/2016/1422
Mr Robert Marven (instructed by J C and A Solicitors Limited) for the Defendant/Appellant
Mr Simon Browne QC (instructed by Horwich Farrelly) for the Claimant/Respondent EUI
Hearing dates: 3 May 2017
APPROVED JUDGMENT
The Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents ("the RTA Protocol") provides a scheme for the efficient resolution of personal injury claims arising out of road traffic accidents at proportionate cost and, at its early stages, using mainly electronic means of communication between the claimants' solicitors and defendants' insurers. It came into effect in its original form on April 30 2010, and was substantially up-dated and revised with effect from 3l July 2013, in the light of the recommendations made by Jackson LJ in his Review of Civil Litigation Costs. This appeal concerns the RTA Protocol in its original form, which continues to apply to claims submitted between those two dates. All references in this judgment to the RTA Protocol are to the protocol in its original form. Similarly, references to provisions in the Civil Procedure Rules are to the rules in force in the same period, save where stated otherwise.
The RTA Protocol seeks to resolve claims within its scope in three stages. Stage 1 is designed to ascertain whether, after notification of a claim, the defendant's insurer admits liability. If it does, then Stage 2 is designed to facilitate a settlement of the claim by an agreement between the parties as to quantum. If no settlement is achieved, Stage 3 provides for the dispute as to quantum to be resolved by the court, by a speedy and cost-effective hearing under CPR Part 8.
All three stages of the scheme attract fixed costs, at rates prescribed in Part 45. At the relevant time the fixed costs payable in relation to Stage 1 under the RTA Protocol was £400 + VAT, although it has since been reduced.
This appeal arises out of three materially identical RTA claims which began their short lives under the RTA Protocol. In each case, the defendant's insurer admitted liability and paid the claimant the Stage 1 fixed costs. Thereafter, none of the three claimants took any further steps to advance their claims, in the manner prescribed for Stage 2 and they eventually became statute-barred.
In each case the defendant's insurers then commenced proceedings in the Small Claims Track of the County Court for recovery of the Stage 1 fixed costs, both from the relevant claimant and from their solicitors, namely the appellant J C and A Solicitors Limited ("JC&A"). The insurers in each case were EUI Limited ("EUI") trading under the Admiral name. The original claimants were Ms Karen Stock, Mr Craig Naylor and Mr Mark Leek ("the Protocol Claimants"). The original defendants were Ms Holly Pitts, Mr Lukas Lonsdale Smith, and Mr Adneen Iqbal ("the Protocol Defendants").
Although the Protocol Claimants and Protocol Defendants were all named as parties to the proceedings leading to this appeal, none of them took any active part, and no remedy is sought against any of them.
Because, no doubt, of the commonality of Protocol Claimant solicitors and Protocol Defendant insurers in each case, the three claims for repayment of the Stage 1 costs were heard together by District Judge Phillips, sitting in the County Court at Cardiff. Although, because of the changes to the RTA Protocol made in 2013, the issue as to recoverability of Stage 1 costs is largely historical, the judge was told that some four hundred or more cases raised the same issue. The judge was also told by counsel for EUI that the claim for repayment was not based upon any allegation of improper conduct by JC&A in initiating the relevant claims under the RTA Protocol, or indeed in abandoning those claims after the conclusion of Stage 1. The case for recovery was put purely on the basis that, in fact, none of the claims had been pursued in any way by the Protocol Claimants or by JC&A as their solicitors beyond the conclusion of Stage 1.
Before the judge, the claims were advanced primarily upon the basis that the RTA Protocol itself gave rise to an entitlement to repayment in those circumstances. The claims were put in the alternative on the basis of constructive trust, money had and received and unjust enrichment. The judge did not find it necessary to deal with those alternatives and none of them have been pursued by EUI on this appeal.
The judge found in favour of EUI's claim for repayment on the basis that, upon its true construction, the RTA Protocol conferred a right of recovery of the Stage 1 fixed costs wherever, for whatever reason, the claim was not thereafter pursued by the claimant. He said, at paragraph 34, that:
"The whole system is based upon the premise that there will be a claim made for personal injury, and that any claim will proceed from Stage 1 to Stage 2."
He concluded that:
"It was always the intention that Stage 1 costs would only be paid on the basis that the claim proceeded to Stage 2, …"
The judge derived some assistance from the fact that, in 2013, the RTA Protocol was amended so as to provide for a liability to pay Stage 1 costs only after the submission by the claimant of a settlement pack, including a medical report, during Stage 2. He concluded that the general rule that the loser pays the winner, now enshrined in CPR rule 44.2(2)(a) led to the same conclusion because, in the absence of any payment of damages, the claimant could hardly be said to be the winner, even though liability had been admitted.
On this appeal, Mr Marven for JC&A challenges the judge's analysis on two main grounds. First he submits that the judge was wrong on his construction of the RTA Protocol. There being no express provision for repayment of the Stage 1 costs in the relevant circumstances, he says that no such right can properly be implied. Secondly he submits that, in any event, there is no basis upon which an obligation to make repayment can be imposed on the Protocol Claimant's solicitors, who will have received the Stage 1 costs pursuant to their contract of retainer with the Protocol Claimant, for work done on the case, the entitlement to Stage 1 costs under the RTA Protocol being that of the Protocol Claimant.
Mr Marven's submissions for JC&A were broadly supported in brief by helpful written submissions from the Law Society and from the Association of Personal Injury Lawyers ("APIL"). Mr Simon Browne QC for EUI supported the judge's analysis. I shall refer in more detail to his main submissions in due course.
On the central question, namely the interpretation of the RTA Protocol, I have reached the opposite conclusion from the judge. In order to explain my reasoning, I must first set out those provisions of the RTA Protocol (in its 2010 form) which bear most directly upon the issue of construction, while recognising that the answer must of course depend upon a reading of the RTA Protocol as a whole, in its context.
Under the heading Definitions, paragraph 1.1(1) provides that, in the Protocol:
"'Claim' means a claim, prior to the start of proceedings, for payment of damages under the process set out in this Protocol;"
Other parts of the definitions paragraph show that the Protocol is limited to claims for damages for bodily injury caused by, or arising out of, road traffic accidents.
Paragraph 1.1(14) provides that:
"'Admission of liability' means the defendant admits that –
(a) The accident occurred;
(b) The accident was caused by the defendant's breach of duty:
(c) The defendant caused some loss to the claimant, the nature and extent which is not admitted;"
Under the heading "Aims", paragraph 3.1 provides that:
"The aim of this Protocol is to ensure that –
(1) The defendant pays damages and costs using the process set out in the Protocol without the need for the claimant to start proceedings;
(2) Damages are paid within a reasonable time; and
(3) The claimant's legal representative receives the fixed costs at the end of each stage in this Protocol."
Paragraph 4.5 provides that the fixed costs then set out in CPR 45.29 (now 45.18) apply in relation to a claimant only where the claimant has a legal representative.
Prior to 2013, the RTA Protocol applied only to claims for damages in the bracket from £1,000 to £10,000: see paragraph 2.1. The upper limit was increased to £25,000 in 2013, and the government has consulted upon a proposal to raise the lower limit to £5,000.
Under the heading 'Claimant's reasonable belief of the value of the claim', paragraph 5.9 provides that:
"Where the claimant reasonably believes that the claim is valued at between £1,000 and £10,000 but it subsequently becomes apparent that the value of the claim is less than £1,000, the claimant is entitled to the Stage 1 and (where relevant) the Stage 2 fixed costs."
This provision addresses the fact that a claim for personal injury damages below £1,000 falls into the Small Claims Track, which makes no provision for costs, apart from court fees and some disbursements, save in narrowly specified circumstances.
At the relevant time CPR 45.40 made provision for taking into...
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