New RTA scheme rules and win a bottle of champagne

A reader helpfully posted a comment on an earlier post mentioning the fact that the New RTA Claims Process start date as been put back to 30 April 2010.  I have received the same information from a number of other reliable sources.  The postponement appears to be due to problems with the electronic portal.  The MoJ website did not, at the time of writing, have any announcement on the subject.  The RTA PI Claims Process portal site has quietly changed the start date but made no specific mention of the change.  This is no doubt due to the ironic fact that the tag line at the top of the web page has the words: "Will your business be ready to meet the deadline…".  The ticking clock has also been wound back.  Oh, the irony.

Now, when the new scheme does finally start, it will be largely run by junior claims handlers at the defendant end and paralegals at the claimant end.  This is meant to be a simple scheme for low value RTA claims.  The new rules are therefore no doubt designed to be easy to understand.  If you have not seen them yet the draft rules can be viewed here: new rules for the RTA Claims Process.

Allowing for how simple these rules are meant to be, I’m going to pose a simple question.  If the claimant is a child, damages are not agreed, the matter proceeds to a Stage 3 hearing and the claimant has beaten the defendant’s offer, the costs recoverable by the claimant are governed by the new CPR 45.34.  So the question is: what costs are payable, and by virtue of which draft rule, to a claimant child where damages are not agreed, the matter proceeds to a Stage 3 hearing and obtains judgment for an amount equal to or less than the defendant’s offer?

First correct answer wins a bottle of champagne (but you won’t be able to win if you post anonymously).  Remember, this is a very simple scheme and I’ll be very disappointed not to have a correct answer within 30 minutes of posting.

26 thoughts on “New RTA scheme rules and win a bottle of champagne

  1. As there is no specific provisions in relation to children where the offer is not beaten, the only answer can be that costs will be payable by the claimant pursuant to CPR 45.38 as follows :-

    (a) where the claim is determined—
    (i) on the papers, Stage 3 Type A fixed costs; or
    (ii) at a hearing, Stage 3 Type A and B fixed costs;
    (b) disbursements allowed in accordance with rule 45.30; and
    (c) a success fee in accordance with rule 45.31(4).

    CPR 45.34 is irrelevant as the rule only applies if the claimant has beaten the offer.

    I'm pretty sure this is not what was intended by the courts but it seems to me the only logical reading of the rules

  2. 2.15pm and only two responses. Very disappointing.

    Pete B may be right but needs to point me to the rule/s that creates this odd result.

    Jon Farthing is clearly right so far as the Defendant's costs are concerned, but the question is what costs is this poor little claimant going to recover where liability for the accident has been admitted by the insurer?

  3. wish i had the spare time to waste, sadly i do not – hopefully all will be clearer in due course (not holding my breath)

    paul elder

  4. The question is, "what costs are payable, and by virtue of which draft rule, to a claimant child where damages are not agreed, the matter proceeds to a Stage 3 hearing and obtains judgment for an amount equal to or less than the defendant's offer?"

    I've only had a 2 minute flick through the various rules, so please excuse my ignorance if this answer is wrong.

    Practice Direction 8B provides at paragraph 13.2 that the Claimant is entitled to costs paid in accordance with 45.34(2), and the Claimant is therefore entitled to recover:
    (a) Stage 1 and 2 fixed costs
    (b) Stage 3 Type A, B and C fixed costs
    (c) disbursements in accordance with 45.30; and
    (d) A success fee in accordance with 45.31(6),

    This practice direction appears to override the requirement in 45.34(1)(c) that settlement must be more than the Defendant's RTA Protocol Offer. Of course, the Claimant will then be liable for costs payable to the Defendant under 45.38, and therefore liable for Stage 3 Type A (and Type B costs if the matter proceeded to hearing), plus disbursements under 45.30, plus any success fee payable under 45.31(4).

  5. Simon, not a bad effort for 2 minutes work.

    However, 13.2 applies in the circumstances identified by 13.1. That requires, at 13.1(3), an application to have been made to the court for approval of the settlement. In my example, there has been no application for approval because the parties have not agreed the quantum.

    It does seem clear that CPR 45.38 applies in terms of the defendant's costs.

    Bottle of champagne still up for grabs.

  6. MMMM – the Claimant must include a settlement offer in the Settlement Pack Form -7.26 and7.27 of the PAP (Pre Action Protocol.

    The Defendant must either accept or make a counter offer – 7.31 to 7.34 of the PAP.
    (offers to automatically include fixed costs as set out in 7.37 of the PAP)

    If they fail to agree then Claimant sends Ct Proceedings Pack. (7.55 of the PAP).

    The Protocol offer is deemed to be made on the 1st business day after the Ct proceedings pack is served on the Defendant.

    So – we go to 45.38 – the Defendant is entitled to Stage 3 A+ B fixed costs plus disbursements / success fee lus interest fro date of service (see above) in accordance with PT 36.21 (2) (a) and (b).

    The Claimant is entitled to Stage 1 and 2 fixed costs in accord with the Pt 36 rules and provisions plus 7.37 of the PAP(i hope!!!!)

  7. Paul, I'm afraid 7.37 of the PAP is of no assistance. In my question the offer has not been accepted and so it is irrelevant that the offer is deemed to include an offer to pay Stage 1 + 2. Part 36 may, or may not, hold the answer but to get that tempting bottle of champagne you need to point me to the exact part of the rule that deals with this situation.

  8. 36.14(1)(a) and the courts discretion under 36.14 (4) will decide if any costs are payable. It would seem that 45.31(6)(b) leading onto 45.34(5)(d) allows for an uplift on those costs costs, if any.

    Pete B

  9. Pete, I am afraid that 36.14(1)(a) and 36.14(4) are entirely disapplied by 36.16(1).

    45.31(6)(b) deals with the level of success fee recoverble but what does the success fee attach itself to?

    45.34(5)(d) does not apply because of 45.34(1)(c).

  10. Have they completey missed this and therefore there are no rules to which 45.31(6)(b) can be applied? Or Claimant gets costs and success fee regardless under 45.33(2)(b). If neither of these, I will give up and go back to my day job… no, wait, this is my day job!!


  11. There appears to be a lack of specific rule in relation to Stage 1 and Stage 2 costs where the Claimant is a child.

    Stage 1 fixed costs

    6.18 Except where the claimant is a child, the defendant must pay the Stage 1 fixed costs in rule 45.29 where—
    (1) liability is admitted; or
    (2) liability is admitted and contributory negligence is alleged only in relation to the claimant’s admitted failure to wear a seat belt,
    within 10 days after sending the CNF response to the claimant as provided in paragraph 6.11 or 6.13.

    Similar rules apply for Stage 2 i.e. except where the Claimant is a child

    7.61 "Except where the claimant is a child" the defendant must pay to the claimant—

    As has already been pointed out Stage 3 Defendant costs are detailed in rule 45.38 but not Claimants.

    The only positive that i can find for the claimant is in the aim of the protocol:

    3.1 The aim of this Protocol is to ensure that—
    (1) the defendant pays damages and costs using the process set out in the Protocol without the need for the claimant to start proceedings;
    (2) damages are paid within a reasonable time; and
    (3) the claimant’s legal representative receives the fixed costs at the end of each stage in this Protocol.

    Therfore there is no rule which states that the Claimant is entitled to recover costs if the Claimant is a child.


  12. Pete, 45.33(2) only applies where settlement at Stage 2 (see 45.33(1)(b). My example is settlement at Stage 3.

    "Completely missed this"? How likely is it that with the scheme only a few weeks away from launch something as basic as this has been overlooked from the rules? That would be very worrying indeed. If the rules committee have managed to get something this simple wrong then what more subtle problems lurk under the surface waiting to be discovered? Isn’t it more likely that you haven’t looked hard enough?

    Come on everyone. Costs muppets are going to have to deal with these rules on an everyday basis. That bottle of champagne is still waiting in my fridge.

  13. Abdi, "lack of a specific rule"? Don’t you start as well. The fact that it is hard to find a needle in a haystack is surely not proof that there is no needle to be found. Are you putting your neck on the line and saying the rule committee has messed up or rather that the rule committee intended a child claimant in this situation to recover no costs?

  14. Mmmmm (again) Could it be that the Claimant's entitlement for Stage 1 and 2 costs arises under the entitlement to claim these costs contained in the consequential amendments to Pt 27 ie 27.14(2) (h).

    We know that matters such as this are not allocated to a track in accord with PD 8B – 17.1.

  15. Paul, I'm afraid Pt 27 only applies if matter is allocated to small claims track (27.14(1)). In my example I’m assuming this is not the case. Quite why, in that situation, the claimant should ever get the new scheme costs, just because of their earlier belief as to the value of the claim, is a bit of a mystery.

  16. Second bite at the cherry…

    Since none of the provisions in Part 45 apply, Part 48.5(2) applies. The Court must order a detailed assessment of the costs payable by the child.

    Have I cracked it??

  17. Simon, for a moment that looked good. However, on reading the consequential amendments I see that 48.5(2)(b)(ii) has been amended so that 48.5(2)(b) does not apply to the new Section VI.

  18. It could be argued that 48.5(2)(b) doesn't apply.

    It seems, however, that all of the new rules only apply to child cases where a settlement has been reached. Therefore, I think that in the second example the claim wouldn't be suitable for Stage 3 Procedure; it would continue under Part 7, get allocated to a track etc….

  19. As anonymous noted, there are no express rules awarding Stage 1 & 2 costs in this situation.

    Moreover the words of the protocol at 6.18 and 7.40 expressly exclude the interim, pre-action payment of these costs where the claimant is a child. However, once the claim enters Stage 3, the 'rules' in the protocol about interim costs of course have no real relevance. Of course, where an interim payment has been paid it must be accounted for.

    Turning then to the SI which enacts the relevant CPR rules (which, so far as is relevant, override anything inconsistent with them in the PD). These statutory rules do not expressly award fixed costs for Stages 1 & 2 in this scenario. They do however specify a success fee on Stage 1 & 2 fixed costs in this situation by virtue of 45.31(6)(a). Moreover it is clear from 45.35(b)(i) that the draftsman had in mind that a child claimant who has properly followed Stage 1 and Stage 2 is entitled to the relevant Stage 1 & 2 fixed costs.

    As a matter of statutory interpretation, the courts will fill this lacuna in the rules. They will do so on the basis of what must be implied in the SI in order for the express words of the rules to make sense and to be effective. Therefore the courts will find that the SI enacting the rules implies, without spelling out, that Stage 1 and Stage 2 fixed costs are due, (plus 12.5% success fee), after Stage 3 quantum proceedings have started, where the claimant is a child, and where defendant's protocol offer is not ultimately beaten.

    If the MOJ tell you the answers are all in the rules, on this particular point they are wrong, except in the sense that the principle of statutory interpretation to be applied is not likely to be hugely controversial.

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  21. r36.21(1) This rule applies where, on the determination by the court, the claimant obtains judgment against the defendant for an amount of damages that is –
    (a) less than or equal to the amount of the defendant’s RTA Protocol offer;
    (b) more than the defendant’s RTA Protocol offer but less than the claimant’s RTA Protocol offer; or
    (c) equal to or more than the claimant’s RTA Protocol offer.
    (2) Where paragraph (1)(a) applies, the court will order the claimant to pay –
    (a) the fixed costs in rule 45.38; and
    (b) interest on those fixed costs from the first business day after the deemed date of the RTA Protocol offer under rule 36.18.
    (3) Where paragraph (1)(b) applies, the court will order the defendant to pay the fixed costs in rule 45.32.
    (4) Where paragraph (1)(c) applies, the court will order the defendant to pay –
    (a) interest on the whole of the damages awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date specified in rule 36.18;
    (b) the fixed costs in rule 45.32; and
    (c) interest on those costs at a rate not exceeding 10% above base rate.

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