A Court of Appeal ruling on road traffic accident cases is expected to spare 800,000 claimants a year from incurring ‘totally disproportionate’ costs.
In Phillips v Willis, Lord Justice Jackson (pictured) ruled that a district judge ‘did not have the power’ to make an order in April 2014 which transferred the case out of the stage 3 portal procedure and into the small-claims track.
Jackson said the ruling that further evidence was necessary to resolve the outstanding dispute between the parties was 'irrational’.
The judgment states that around 800,000 cases a year are dealt with under the rules the Court of Appeal was being asked to construe.
The case involved an accident in June 2013, for which claims for treatment and general damages were agreed. But the claimant issued a claim form under part 8 of the Civil Procedure Rules in Gateshead County Court after both parties failed to reach a settlement over car hire charges.
On 9 April 2014, the district judge informed the parties that the action would proceed under part 7 of the CPRs ‘since the only issue between them was the proper amount of car hire charges’.
The claimant appealed the order, which was dismissed by His Honour Judge Freedman, a circuit judge, three months later.
Jackson said the claimant appealed the circuit judge’s order ‘on grounds which have undergone fairly drastic amendments’ over the last two years.
He said: ‘These grounds of appeal now present a bewildering kaleidoscope of red, green and black. Despite all that colourful pleading, there is really only one issue in this case. That is the issue identified by the circuit judge.
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‘The issue is whether the district judge had power under paragraph 7.2 of practice direction 8B to order that the claim should continue under part 7.’
The judgment states that the sum claimed in the action was only £3,486; the amount turning on the damages issue was just £462.
Jackson said the costs that the district judge caused the parties to incur ‘were totally disproportionate to the sum at stake’.
‘First, the parties would have to pay a further court fee of £335 as a result of the district judge’s order,’ Jackson continued. ’Secondly, the parties would incur the costs of complying with the district judge’s elaborate directions.’
Jackson said the district judge ‘did not have the power to make the order which he made in April 2014’. He allowed the appeal and ‘set aside’ the district judge’s order. Lord Justice Floyd and Lady Justice Macur agreed.
Newcastle firm Winn Solicitors, which represented the claimant, said the ‘revised’ ruling would benefit all users of the RTA portal, which opened in 2010.
Winn Solicitors legal director Ghazala Bashey said: ‘The practice of county courts routinely and unnecessarily transferring cases from the portal to part 7 small-claims track when they were actually capable of being dealt with at a stage 3 hearing is inefficient, disproportionate and unjust.’
Bashey said this often led to a ‘significant delay’ in the conclusion of proceedings. It also gave defendants ‘a second bite of the cherry’ to raise new issues ‘at a very late stage in subsequent proceedings’ that had not previously been raised in portal proceedings.