How to dupe a claimant where the claim is on the ‘blurred lines’ of the small claims / fast track

Example

Claim worth £9k+, not the most complex but an expert would probably help on causation (e.g. mechanical services engineer or fire expert).

What happens?

  • Particulars challenged with robust defence.
  • Defendant makes an offer to settle in open correspondence on a global basis (e.g. £7.5k – £8k)
  • Notice of provisional allocation to small claims track sent by Court.
  • The defendant completes the D/Q stating the small claims track is appropriate and no expert is needed

How to dupe the claimant

  • Make a Part 36 offer by completing the MOJ Part 36 offer form and serve this on the claimant’s solicitor 9say £6k-£7k)
  • After the claimant’s solicitor accepts the offer send them the settlement cheque for damages
  • Then, wait a week and tell them you are paying £555 only for the issue fee and fixed small claim costs

How is this possible?

Due to a stupid quirk in the rules:

  • CPR r 44.9 states a costs order will be deemed to have been made on the standard basis if a Part 36 offer is accepted after commencement of proceedings
  • CPR r 27.2(1)(g) provides that Part 36 does not apply to small claims and CPR r 27.14 is restrictive in providing that small claims are subject to the fixed costs regime of CPR r 27.14 and CPR Part 45.
  • CPR r 46.13(3) states that when the court is assessing costs on the standard basis which concluded without being allocated to track it may restrict costs to the costs that the claim would have been allocated to if allocation had taken place.

As the Court sent notice of provisional allocation to the small claims track it means the Court is already against the claimant.

While the claimant will have an authority for costs, CPR r 46.13(3) was an amendment to the pre-1st April rule and now includes cases where there has been no allocation. Prior to this in such cases the O’Berne v Hudson process applied and we had to go through bills line-by-line ascertaining whether costs were reasonable having reference to the fact it would have been a small claim. As provisional allocation indicates that at the allocation hearing this would have been allocated to the small claim, but only in the fast track with a particularly suave tongued barrister. On assessment the Court will go through the same thought pattern.

It’s unlikely a claimant will run the fast track argument due to the risk involved, and coupled with the limited time they would have spent on the claim expecting it to be a small claim with fixed costs, they won’t have front loaded in the same manner as a fast track claim as the Part 36 offer was not expected.

I am interested in whether others have seen anything like this?  Would be helpful to have a first instance decision.

Over and out.

Legal Orange.

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One thought on “How to dupe a claimant where the claim is on the ‘blurred lines’ of the small claims / fast track

  1. Pingback: CIVIL PROCEDURE, COSTS & SANCTIONS: LINKS TO RECENT ARTICLES AND POSTS | Civil Litigation Brief

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