Is a trial advocacy fee recoverable under the fixed-costs scheme (Civil Procedure Rule 45 Part IIIA) if a case settles on the day of trial but before the trial actually commences? This was the novel issue which came before Coulson J (pictured) in the High Court in Mendes v Hochtief (UK) Construction Ltd [2016] EWHC 976 (QB).

The rules

Rule 45.29A identifies the circumstances in which the Part IIIA rules apply and include claims started under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (RTA protocol). Rule 49.29C sets out a table of fixed costs where a claim no longer continues under the RTA protocol. This table provides details of the following circumstances in which fixed recoverable amounts may be claimed:

  • If parties reach a settlement prior to the claimant issuing proceedings under Part 7 (section A);
  • If proceedings are issued under Part 7, but the case settles before trial (section B);
  • If the claim is disposed of at trial (section C); and
  • Trial advocacy fees (section D).

Facts and submissions

The case concerned a personal injury under the RTA protocol and therefore the costs were subject to the fixed-costs regime. The matter eventually settled on the day the trial was due to commence and the recorder was invited to assess costs in accordance with Part IIIA. He awarded two elements of the fixed costs in accordance with the CPR: £2,655 and 20% of the damages. However, he refused to award the fixed trial advocacy fee. He concluded that, because the case was settled before the final contested hearing had commenced, no such sum was recoverable. It was this decision which the claimant appealed to the High Court.

The appeal

The claimant argued that the recorder was wrong in reaching his conclusions. The claimant referred to section B of table 6B in rule 45.29C and contended that the settlement reached could not be said to have arisen under any of the circumstances covered in that section and therefore the court had to deal with costs under section C instead. In any event, the claimant argued that the claim had been disposed of at trial and so the relevant advocacy fee was recoverable.

The defendant countered by arguing that the trial advocacy fee was only recoverable under section C if the trial had commenced. In support of this argument, the defendant relied on the definition of ‘trial’ under rule 45.29C(4)(c), arguing that, since a trial meant ‘the final contested hearing’, it could not be said that this claim had been disposed of at a final contested hearing. Thus, the relevant trial advocacy fee was not recoverable.

Coulson J agreed with the claimant’s argument that consideration of the fixed costs in this case could not have arisen under section B. This case did not, Coulson J noted, settle prior to the date of trial. Even allowing for the definition of ‘trial’ as a reference to ‘the final contested hearing’ the point remained the same: the settlement did not occur prior to the date of the final contested hearing. That was always the trial date and the case did not settle prior to that date.

Coulson J held: ‘On that basis, as a matter of interpretation, the three stages in section B of table 6B must each be taken to have been completed by the time the recorder came to deal with costs. That necessarily points the way to the costs being dealt with under the next section, section C.’

The defendant’s argument that the date on which the trial is listed to be heard may not be the date of the final contested hearing (for example, the trial may be adjourned) was dismissed by Coulson J, who held that the date of the final contested hearing is not the date the trial was listed to be heard, but the date the final contested hearing took place, or would have taken place, but for the settlement on that date. If a trial is adjourned or relisted, it will be the adjourned or relisted date that matters for these purposes.

The judge also rejected the defendant’s argument that this element of the fee was for trial advocacy which did not occur so cannot be recoverable. He held that that made an artificial distinction between preparation of advocacy and attendance at trial on the one hand, and actual performance of advocacy on the other.

Coulson J illustrated the weakness in the defendant’s argument when he said: ‘And what if the trial goes ahead and the judge does not call on counsel or the solicitor-advocate for the claimant because the other side’s case is so poor? He or she would not perform any advocacy in such circumstances so, if the defendant is right, he or she would not be entitled to be paid. That would be an absurd result.’

Coulson J also agreed with the claimant that there were sound policy reasons for concluding that the interests of justice would be better served if the advocate was not penalised financially for negotiating a settlement at the door of the court. The defendant’s contention that counsel would have ‘skimmed off’ the trial advocacy fee when it was not properly recoverable was strongly rejected by Coulson J, who argued that recoverability of the trial advocacy fee ‘hardly amounts to some sort of windfall’.

The decision is significant because it is the first authority which deals with the issue of whether a trial advocacy fee is recoverable under the fixed-costs scheme. It makes clear that a trial advocacy fee is recoverable under the fixed-costs scheme.

Coulson J’s considered judgment provides helpful guidance on the interpretation of the fixed-costs scheme as well as upholding and protecting the policy of settlement.

Masood Ahmed of the University of Leicester is also a member of the Civil Procedure Rule Committee

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