Costs on the Small Claims Track by Sponsor BsQ

Costs on the Small Claims Track by Sponsor BsQ

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Written by sponsor bSquared costs law

 

As many of you will know, the scope for recovering costs on the small claims track are notoriously limited and CPR 24.14 (2) sets out those costs that are recoverable with reference to fixed costs under CPR 45. These are largely limited to a fixed fee for commencing the claim, court fees and some limited disbursements.

 

However, CPR 27.14 (2) (g) also allows the recovery of “such further costs as the court may assess by the summary procedure and order to be paid by a party who has behaved unreasonably”. This issue was considered recently by the Court of Appeal inDammermann v Lanyon Bowdler LLP [2017] EWCA Civ 269 (12 April 2017).

  

The Appellant brought a claim against the Respondent to challenge the level of fees that they had incurred in representing United Trust Bank Ltd in selling the Appellant’s home as a result on defaults on his mortgage payments. The Appellant’s claim failed at first instance and also on appeal and the Respondent’s applied for their costs on the basis that the Appellant had “behaved unreasonably”, in particular by pursuing his appeal and failing to accept an offer of £1,000 made by the Appellant. As a result, the Appellant was ordered to pay the costs of the appeal.

 

The Appellant then sought to appeal the costs decision and this was heard by the Court of Appeal.

  

In allowing the appeal and overturning the costs order made in the Court below, it was held that the Appellant’s conduct did not amount to having “behaved unreasonably” for the purposes of CPR 24.14 (2) (g) for two main reasons:

 

  • The Judge who gave permission to appeal was the very same Judge who heard the appeal itself

  • The point on which the Appellant lost the appeal was an obscure one

The Court of Appeal went on to consider the “proper meaning” of CPR 24.14 (2) (g) but it was conceded that this was a difficult task as it is stated at para 30 “we doubt if we can usefully give general guidance in relation to the circumstances in which it will be appropriate for a court to decide whether a party "has behaved unreasonably" since all such cases must be highly fact-sensitive”.

  

They went on to say that “the meaning of "unreasonably" cannot be different when applied to litigants in person in Small Claims cases. Litigants in person should not be in a better position than legal representatives but neither should they be in any worse position than such representatives.”

 

Whilst not being particularly authoritative on the point, this case shows that the threshold of “behaving unreasonably” in a small claims matter is a high one and practitioners should think carefully before making an application for an award for costs on this basis as it could ultimately prove to be a waste of time and money.  

 

bSquared costs law are experienced in dealing with all aspects of costs disputes arising out of civil litigation. Contact us to request your free litigation costs recovery guide. To discuss how we can support your firm or for free initial advice on any cost law matters, feel free to contact us on:

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