Fixed Recoverable Costs –When does a Disbursement Arise from a Feature of the Dispute?
From the introduction of the very first of set of Fixed Recoverable Costs rules for Personal Injury claims back in October 2003 (RTA claims settled pre-issue for under £10,000.00) the costs that can be claimed have never been absolutely fixed. Those rules included the ability to claim and be awarded profit costs exceeding the fixed amounts if there are “exceptional circumstances” and that escape clause is repeated in the most recent set of fixed recoverable rules for claims that no longer continue under the Pre Action Protocol for Low Vale Personal Injury Claims and the Pre-Action Protocol for Resolution of Package Travel Claims.
When it comes to disbursements under the Fixed Recoverable Costs Rules, the amounts that can be claimed and awarded have never been fixed, save for elements of the medical records and medical report fees in soft tissue RTA claims. Instead, the rules have restricted the disbursements that can be claimed by stating that the Court may allow a claim for a disbursement of a type listed in the rule but will not allow a claim for any other type of disbursements. The types of disbursements listed are broadly the same across all three types of fixed recoverable costs and include such categories as the costs of obtaining medical records and reports, other types of reports such as engineers and police, DVLA & MID searches and court fees.
In addition, the three versions of the Fixed Recoverable Costs rules relating to disbursements (CPR 45.12, 45.19 & 45.29I) all include a general category of “any other disbursement that has arisen due to a particular feature of the dispute” (the wording is slightly different for disbursements in claims that do not continue under the protocol but is essentially the same). It is the interpretation of this general category that has, since 2003, given rise to years of argument and contrary decisions at first instance and in the lower Courts as to what disbursements can be claimed under that definition.
One of the main themes of these arguments was whether a disbursement that was incurred due to a characteristic of the Claimant, such as being a minor or unable to speak English, meant that the disbursement arose from a feature of the dispute. The most frequent example of that theme was in relation to interpreter’s/translator’s fees for assisting with Claimants who did not speak English, such as translating witness statements or attending a medical appointment with the Claimant to act as an interpreter. Many paying parties would attempt to investigate whether the Claimant genuinely needed an interpreter or could understand enough English to process the claim without assistance but some maintained the position that the fact a Claimant could not speak English was a particular characteristic of that party but not a feature of the dispute itself.
Many of these arguments were either resolved through negotiations or upon provisional and detailed assessments in local County Courts and the SCCO by District Judges and Costs Masters. A few of those decisions were subsequently appealed to Circuit Judges and some of them were reported but none were binding so the debate rumbled on. By way of some examples, in Madej v Maciszyn  Costs Master Campbell was firmly of the opinion that the need to incur a translator’s fee due to the Claimant not being able to speak English was a feature of the dispute so that it could be claimed whereas in Olesiej v Maple Industries  HHJ Wood QC was equally resolute that such a fee was not a feature of the dispute and could not be claimed under the general category. In the much more recent case of Dover v Finsbury Food Group PLC , Costs Master Brown implied that translator’s fees could be claimed as a feature of the dispute when he said in relation to a dispute concerning Counsel’s fee that “Thus, this clause (CPR 45.29I(2)(h)), might more obviously be read as applying to interpreter’s fees or the like”. Costs Master Brown did, however, express this view “tentatively” because he was aware that the Court of Appeal was shortly to publish a judgement that would finally give an authoritative answer on this point which had remained unresolved for 16 years.
THE COURT OF APPEAL DECISION
In Aldred v Cham  EWCA Civ 1780, the Defendant’s insurers decided to pursue the interpretation of when a disbursement is a feature of a dispute all the way to the second highest Court in the land, even though the actual disbursement in question was only £150.00 plus vat. The disbursement did not relate to a translator’s fee but to Counsel’s fee for an advice on settlement that was required for an Approval Hearing due to the Claimant being a minor. The claim had settled after it had dropped out of the pre-action protocol for low value PI RTA claims so the Fixed Recoverable Costs were to be assessed under CPR 45IIIA which, unlike claims that settled within the protocol, did not include a specific allowance for a specialist Counsel or Solicitor’s advice for use at the approval hearing. Therefore, the Claimant sought to recover the fee for Counsel’s advice as a disbursement arising from a particular feature of the dispute i.e. that the Claimant was a minor and so had to have the advice for the purpose of the approval hearing. Having heard argument on this point and considered the lower Courts case law, including Madej and Olesiej, the Court of Appeal decided that Counsel’s fee was not claimable as a disbursement arising from a particular feature of the dispute.
In given the unanimous judgment of the Court, Lord Justice Coulson said “Having considered these careful judgments, I prefer the approach of HHJ Wood QC. The fact that, in a particular case, a claimant is a child, or someone who cannot speak English, or who requires an intermediary, is nothing whatever to do with the dispute itself. Age, linguistic ability and mental wellbeing are all characteristics of the claimant regardless of the dispute. They are not generated by or linked in any way to the dispute itself and cannot therefore be said to be a particular feature of that dispute.” He went on to say “The particular features of the dispute in an RTA claim will commonly be matters such as: how the accident happened, whether the defendant was to blame for the accident, the nature, scope and extent of the injuries and their consequences, and other matters of that kind. For example, the particular circumstances of the accident may be sufficiently unusual to require an accident reconstruction expert, or the injuries may be so complex that they require a number of different experts' reports. Such additional involvement of experts may also require specific advice from counsel. Depending always on the facts, such costs may be said to be a disbursement properly incurred as a result of a particular feature of the dispute. In contrast, the cost of counsel's advice in the present case was not necessitated by any particular feature of the dispute, and was instead required because it is an almost mandatory requirement in all RTA cases where the claimant is a child. It was therefore caused by a characteristic of the claimant himself and does not fall within the exception”.
Barring a highly unlikely successful appeal to the Supreme Court, this judgment puts to bed the longstanding dispute as to whether disbursements incurred due to the particular characteristic of the Claimant such as age or ability to speak English can be claimed under the Fixed Recoverable Costs rules. In future, such disbursements will not be allowed in cases where Fixed Recoverable Costs apply and Solicitors acting for Claimant’s with such characteristics will need to consider at the outset how these fees will be funded or what alternative arrangements can be made to pursue the claim. Potential Claimant’s will need to be warned that such irrecoverable disbursements might have to come out of their damages, which could be a difficult proposition in very low value claims or possibly translation and interpreting will need to be organised via family members or friends who can speak English and the Claimant’s own language. Whatever the solution, one certainty is that the very low levels of fixed recoverable costs that can be claimed will not allow Solicitors to fund such disbursements out of their share and still be able to run such cases profitably.
This article was written by Nick Kitchen, who is a Legal Executive and senior costs practitioner working at the Exeter branch of Burcher Jennings