Costs remain fixed in the Petty Debts Court

Introduction

Amongst other matters, the Petty Debts Court (the “PDC”) has jurisdiction to hear all civil claims with a value lower than £30,000.00. In April 2018, the Petty Debts Court (the “PDC”) in Jersey introduced the Petty Debts Court Rules 2018 (the “2018 Rules”) and Practice Direction 18/01 (“PD 18/01”) as part of its programme of reforms aimed at increasing access to justice within the Island’s Courts. The 2018 Rules formalised the “Overriding Objective” which, in essence, provides that the PDC should deal with cases justly and at a proportionate level of cost.

The PDC introduced a fixed costs regime in a bid to ensure that the costs incurred in litigating claims of modest value remained proportionate. As drafted, the fixed costs regime appeared to apply to all cases brought before the Petty Debts Court.

There has, for some time, been some debate as to whether the fixed costs regime does (or should) extend to actions for personal injuries and/or clinical negligence. This uncertainty has led to parties engaging in protracted and relatively costly negotiation as to the basis upon which costs should be recovered; i.e. pursuant to the fixed costs regime or on the usual ‘standard’ basis. The significant difference in the level of recoverable costs depending on the basis adopted has meant that sensible commercial compromise has not been easy to achieve.

In its recent judgment in Wilson v Santos and Cimandis Foods Limited (in which BCR Law LLP acted for successful defendants) the PDC has provided a greater degree of clarity as to the basis upon which costs can be claimed in personal injury and clinical negligence claims which are brought in the PDC. The Plaintiff claimed damages in respect of personal injuries which she sustained as a result of a minor road traffic accident. Liability was admitted and damages were compromised between the parties for less than £5,000.00. The parties could not agree on the settlement of costs. The Plaintiff argued that fairness dictated that cost should be awarded on a more generous basis than the usual fixed costs basis. The Defendants argued that the fixed costs regime was of general application to all claims brought in the PDC and should only be displaced in certain circumstances which were clearly defined by PD18/01. Those circumstances did not apply in this case.

The Law

As with the Island’s other Courts, notwithstanding the fixed costs regime, the PDC retains a general discretion to determine by whom, and to what extent costs are to be paid. However, unlike the Island’s other Court’s, that general discretion is tempered in the PDC’s case by Rule 58(2) of the 2018 Rules which provides that a party shall recover costs on the fixed costs basis, unless the Court orders otherwise. PD18/01 lists the circumstances in which the PDC might depart from its usual order of fixed costs. These include:

• Where an offer of settlement is not beaten at trial; or
• Where there is something in the conduct of one of the parties which merits a different order being made. In practice this will include circumstances where:
  o there was no reasonable grounds to bring or defend the proceedings;
  o the proceedings amounted to an abuse of the Court’s process; or
  o the conduct of one of the parties obstructed the just disposal of the proceedings.

It is clear from the terms of PD18/01 that the fixed costs regime applies regardless of whether or not some, or all, of the claim is disputed and whether or not a party retains a lawyer.

The value of the costs that can be recovered under the fixed costs regime is linked to the value of the damages which have been awarded at trial, or which the parties agree should be paid. There are currently three levels of claim for the purposes of assessing costs: claims for £5,000.00 or less; claims for between £5,000.00 and £10,000.00; and claims in excess of £10,000.00 but less than £30,000.00. The greater the value of the claim, the greater the value of the fixed costs that can be recovered.

Analysis

In Wilson, the PDC confirmed that whilst the PDC retained a general discretion as to costs, the wording of Rule 58(2) of the 2018 Rules represented the PDC’s general policy to awards of costs. As such, the general rule is that the fixed costs regime will apply. The PDC will only depart from that general policy when it can be shown that particular circumstances exist which justify an award in excess of fixed costs. There was nothing on the facts of the case which justified an award of costs on a basis other than the fixed costs basis.

Importantly, the PDC recognised that personal injury and clinical negligence claims fell into a special category of claim which distinguished them from the run-of-mill debt claims which were ordinarily prosecuted in the PDC. It was noted that personal injury and clinical negligence claims often required a greater degree of investigation, including the instruction of medical experts, in order to quantify the claim. Such investigations served to increase costs. Accordingly, the PDC held that the Plaintiff would be awarded her costs on a fixed basis but, using the discretion afforded to the PDC, the costs award would be at a higher rate than that which would have otherwise been awarded by strict reference to the value of the agreed value of the Plaintiff’s claim.

Interestingly, the PDC alluded to the fact that it is currently considering amendments to PD18/01 to make separate provision for costs awards in respect of personal injury and clinical negligence claims so as to better reflect the additional time costs incurred in such cases. No indication was given as to the exact nature of the proposed amendments.

The PDC’s decision in Wilson is a welcome one, bringing as it does, a greater degree of certainty to both Plaintiffs and Defendants as to their potential costs exposure in dealing with claims of modest value in the PDC and more particularly those involving personal injuries. The proposed amendments to PD18/01 are also to be welcomed as they will ensure greater access to justice for plaintiffs who wish to prosecute personal injury claims of modest value, whilst ensuring that adverse costs orders against defendant parties do not prove to be disproportionate to the sums claimed.