We have recently been involved in a case for one of our commercial clients that was allocated to the fast track in a local County Court. It is not a venue in which we, or our clients, often find ourselves, but given the outcome and the costs order it is worth relating the experience.
The fast track is the usual track for modest claims of between £10,000 and £25,000. It is designed to provide a quicker, simpler procedure to the multi-track for lower value cases that do not require detailed preparation and a lengthy trial (even though the procedural steps to be completed are virtually identical). The aim is for fast track cases to be compromised or tried within a period of 30 weeks from the allocation and giving of directions. As litigators know very well, given the relatively low value of claims, costs recovery is likely to be limited once the court has applied the proportionality test. In addition, recoverable trial costs are very limited and when they increase, do so by small increments only. This incentivises the parties to settle such lower value disputes, but can prove to be a difficult balancing exercise for solicitors when their costs to trial can easily become disproportionate to the sums in dispute.
When faced with the claim against our client in this matter, we first had to strike out one part of the case against a defendant who patently should never have been a party in the first place. Having dealt with that initial issue, the client quite sensibly sought to resolve the matter on a pragmatic commercial basis (while complying with a challenging timetable of directions) and several without prejudice save as to costs (WPSATC) offers were made. However, the claimant was having none of it and wanted their day in court. They duly got it and the costs incurred exceeded the sums alleged to be in dispute. A full day’s hearing later, the claim was dismissed and our client was awarded costs. Importantly, having been forewarned about recovery of costs in the fast track, our client nevertheless got a costs order reflecting a recovery of some 95% of the costs they incurred.
What we learned from the case was that costs are always in the discretion of the court and, where appropriate, awards will be made that do not necessarily follow the black letter rules of procedure. Although we were not able to quiz the judge on the rationale behind the costs order, we believe that the judge considered that all the preparation for the trial had been necessary and that both we and our client had conducted ourselves properly throughout.
We also believe that one of the persuasive factors was our ability to demonstrate that settlement on generous terms had been attempted on a number of occasions and, as such, our client was forced into the last resort of a trial through no fault of our own. On this occasion, accepting that such outcomes cannot be predicted with certainty, justice was done for our client rather than what may have been a pyrrhic victory.
Whilst it is correct to proceed on the basis that costs recovery in the fast track is likely to be limited, it is not inevitably so. The importance of making genuine WPSATC attempts to settle the matter cannot be underestimated; even if a client is not prepared to gamble with the cost consequences of a Part 36 offer being accepted, there is still some value in making a WPSATC offer and keeping the position on settlement under close review.
Winston Churchill said, ‘to jaw-jaw is always better than to war-war’, but if that is not within your control then there is a prospect that the costs recovery under the fast track will receive some judicial empathy.