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Small Claims Track Discontinuance advice needed


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Hi,

 

Need a little advice on costs as I am a little confuzzled.

 

I understand that costs on the small claims track can be assessed under CPR 27.14.

 

However, upon discontinuance where a case has not been subject to allocation (but is likely to be allocated to SCT) am I reading it correct that there is no liability under CPR 38.6 (3).

 

What then for the Defendant who has spent an inordinate amount of time preparing a defence etc only to then have a party discontinue???

 

 

Liability for costs

38.6

(1)Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant.

 

(2)If proceedings are only partly discontinued –

 

(a)the claimant is liable under paragraph (1) for costs relating only to the part of the proceedings which he is discontinuing; and

 

(b)unless the court orders otherwise, the costs which the claimant is liable to pay must not be assessed until the conclusion of the rest of the proceedings.

 

Any thoughts?

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Hello vjohn82!

 

Sorry if I have not fully understood the question, but assuming that I have, I think it is useful to be aware that all Claims are effectively Multi-Track until Track has been Allocated.

 

So, the Track that the Claim might have ended up on, is irrelevant.

 

If they pulled the plug and baled out before Allocation, then Small Claims Track cost limits do not apply.

 

Hit them with a full Bill of Costs, and go for it! This may help...

 

One good tip on Litigant in Person Costs, is to know that the 2/3 Cap only applies to your Time Costs. IOW, the LiP Rate of £9.25 an hour.

 

Thus, when drawing up your Bill of Costs, always split it into two main sections, i.e. Time Costs and then Disbursements.

 

There are no limits on Disbursements, provided they are clearly reasonable and in keeping with the work done.

 

Disbursements are things like Postage, Carrier Costs, Printing, Paper, Ink, Telephone Calls, Car Fuel & Car Running Costs (to get to/from anywhere as part of the work done), Photocopying, Scanning, Accommodation, Travel & Subsistence, i.e. anything where you can substantiate a reasonable Disbursement.

 

Thus, it is quite conceivable that a Litigant in Person's costs could exceed that of a Lawyer, because a Lawyer is not allowed to include routine items like Paper and Ink etc. This is because it is assumed they include that as part of their fees, and have Gofer Staff to do the Menial Tasks for them. By comparison, the Court knows that a Litigant in Person would have to do everything themselves, and those tasks usually have a cost.

 

For example, if you use a Car or Bike to get to Court, then establish the mileage to Court and double it (because you also have to get back). Then find out a reasonable average for the cost of Fuel in your area. Then establish a reasonable Miles per Gallon, say, 30mpg for an average vehicle and, from that you can submit a Fuel Cost. Then add a reasonable running cost per mile for a vehicle, perhaps 10p or even 20p a mile, all is OK provided you can argue it. It could be higher if you factor in Road Tax, Depreciation, Running Costs, work out the annual cost, and divide that by 10,000 Miles average, and it may well work out at 50p a mile. Multiply that by the round trip mileage to Court, and that's the Disbursement for that!

 

IOW, if a Lawyer's fees would've been £1,200 and you claim £1,000 for your Time, then the 2/3 Cap would limit you to £800, that being 2/3 of the £1,200 a Lawyer would charge.

 

However, if you can show £600 in Disbursements, then your total fees would exceed the Lawyers, i.e. £800 allowed on Time Costs, and £600 for Disbursements, makes £1,400 in total, and that could be allowed because you are not getting more than the 2/3 Cap on your time.

 

So, make sure anything that is a Disbursement is removed from your Time Costs, and make sure you do charge for every second of your time at £9.25 an hour...the Court will limit you to 2/3 of a Lawyer's fees, but better that than under-claim and get less than you deserve.

 

Finally, there is Case History to support this:

 

Wulfsohn, R (on the application of) v Legal Service Commission [2002] EWCA Civ 250 (8 February 2002)

 

Also...

 

Mealing-McLeod v The Common Professional Examination Board 2000 All ER D 436.pdf

 

 

Cheers,

BRW

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Hi banker... thanks for looking in.

 

Well there was a Summary Judgement hearing scheduled for 22/02/10 - the Claimant discontinued on 18/01/10.

 

I wrote an informal letter to the court requesting permission to apply for costs but they decided to treat it as an application and used the SJ hearing to hear for costs instead.

 

I'm just trying to get my head around the costs rule for discontinuance and having no liability on the SCT as per 38.6 (3).

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Hello vjohn82!

 

Sorry if I have not fully understood the question, but assuming that I have, I think it is useful to be aware that all Claims are effectively Multi-Track until Track has been Allocated.

 

So, the Track that the Claim might have ended up on, is irrelevant.

 

If they pulled the plug and bailed out before Allocation, then Small Claims Track cost limits do not apply.

 

BRW.

 

Is there any case law or CPR where cases are multi-track before allocation?

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Hello vjohn82!

 

Is there any case law or CPR where cases are multi-track before allocation?
I regret I can't point you to where it lives, but it'll be buried in CPR somewhere. Try here:

 

Part 44 GENERAL RULES ABOUT COSTS

 

This bit may help, i.e. 44.11(1):

 

Costs following allocation and re-allocation

44.11

 

(1) Any costs orders made before a claim is allocated will not be affected by allocation.

 

(2) Where -

 

(a) a claim is allocated to a track; and

 

(b) the court subsequently re-allocates that claim to a different track,

 

then unless the court orders otherwise, any special rules about costs applying -

 

(i) to the first track, will apply to the claim up to the date of re-allocation; and

 

(ii) to the second track, will apply from the date of re-allocation.

 

(Part 26 deals with the allocation and re-allocation of claims between tracks)

See also the related Practice Directions here:

 

PRACTICE DIRECTION ABOUT COSTS

SUPPLEMENTING PARTS 43 TO 48 OF THE CIVIL PROCEDURE RULES

 

Also, Judge Patricia Pearl mentions this on page 124 of the Fourth Edition of her excellent book...

 

Small Claims Procedure:

A Practical Guide

 

Fourth Edition

 

ISBN 978 1 85811 394 4

This is what she says:

 

(2) What happens if there is a hearing on a case which qualifies for the Small Claims track before allocation? (for example the hearing for a summary judgment)

 

The District Judge is not restricted by the no costs rule when deciding how to deal with the costs (rule 44.9 and PD 44 para 5.1(1)) but will be concious of the discretion guidelines (see page 117).

CPR Rule 44.9 is below:

 

Costs on the small claims track and fast track

 

44.9

 

(1) Part 27 (small claims) and Part 46 (fast track trial costs) contain special rules about -

 

(a) liability for costs;

 

(b) the amount of costs which the court may award; and

 

© the procedure for assessing costs.

 

(2) Once a claim is allocated to a particular track, those special rules shall apply to the period before, as well as after, allocation except where the court or a practice direction provides otherwise.

I can't see a clear match for the "PD 44 Para 5.1(1)" that she mentions, so that could be a typo in the book, or CPR has changed since the book was written. There does not seem to be a Para 5.1(1), just a 5.1 and a 5.11, neither of which have a (1) linked to them!

 

I've had full costs awarded on a Summary Judgment Application that I made before Allocation, i.e. where the issue was otherwise heading for Small Claims Track. Because Track had not actually been Allocated when I won the issue, I received full costs...no question. Judge was quite aware, and I hardly needed to point out this was the case.

 

I hope this helps.

 

Cheers,

BRW

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Subbing. Excellent info, BRW.

“The industry is rotten to the core, whether it is in-house recovery and collection, or where agents are used, or where the debt has been sold.” Andrew Mackinley MP, House of Commons, 22 April 2009

 

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Great info BRW... thanks.

 

That was pretty much what I found when investigating it - it seems consideration whether a party was unreasonable prior to discontinuance is an important factor in the Judge's discretion.

 

I think I can more than cover that...

 

What is your take on a Witness Statement being privileged etc? There's lots about on google etc to say that they are not confidential and therefore I can tell the world... but if you have an opinion on it I would be glad to hear it.

 

Cheers,

 

VJ

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  • 1 year later...

Any advice please? Have issued a claim for £4.8k. Case allocated to Small Claims Track after I requested and defendent both stated in allocation questionaire. Defendant isntructed a large firm of solictors and then made application to court to have the case 1) struck out or 2) moved to Multi Track. Judge stayed case and pending Mediation or Office of Independent Arbitration but the later was not possible as we only wanted to go this route on basis of both parties bearing own costs and defendants want about £9k in costs. Judge did not have the case strcuk out.

 

Am thinking of discontinuing as defendent wants case moved to Multi Track and have said it will cost me £3ok - £40k if I lose.

 

Solictor now states CPR ( Rule 38.6) that “a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant”. These costs would need to be agreed, and if agreement could not be reached then they would be assessed by the Court.

 

As I said case is in Small Claims Track. I thought that provided my case is reasonable the most I can lose on solioctors fees is £80.00 I do feel I have a fair case but not 100% certain I can win. I would just like some advice on implications if I give up now (which is not my preferred route).

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