Peter Savory – Costs: Fixed or Standard Basis on a Portal claim

A recent decision by Master Leonard in Claire Hammond v. SIG plc and Subsidiary Companie [2019] EWHC B7 (Costs) tackled the question of recovery of fixed costs or standard basis costs for a PI claim in the Portal. The claim was originally begun with a Letter of Claim, but then continued with an uploaded CNF to the Portal with the value as “up to £25,000”. The Claimant had originally indicated to the Defendant they would not be making use of the Portal due to potential value, but eventually did so at the Defendant’s request. In any event, liability was not admitted and the claim then exited the Portal.

Proceedings were issued, but a Defendant Part 36 offer of £36,500 was accepted prior to allocation. The acceptance note included the words “In addition our costs are payable on standard basis…”, no issue was taken at that point, the Claimant served a costs bill on the standard basis totalling over £57,000 and only in its Points of Dispute did the Defendant then assert that the Claimant was only entitled to fixed costs, absent a successful application to fall within the ‘exceptional’ provisions of CPR 45.29J.

Master Leonard first considered when the claim started and held that a Letter of Claim does not start a claim under the Protocol, that can only be by a CNF. In this case the claim had been within the Protocol, albeit upon request. It was contrary to the provisions of CPR 45 Section IIIA if a Claimant could avoid them simply by sending a Letter of Claim before a CNF. “From the moment of entry of any claims into the Portal the CPR 45 fixed costs regime will apply, unless the case can be shown to fall within one of the specified exceptions”.

There were submissions as to the conduct of the parties, in particular whether the Claimant was “in some way coerced into submitting the claim to the Portal”. The Defendant was not in a position to insist on the use of the Portal, the Claimant could have refused and issued under Part 7. The Claimant also sought to rely on the statement about costs included within their Part 36 acceptance note, but the Master held that Part 36, being a self-contained code, was not amenable to adjustment by reference to principles of contract.

As to exceptionality, the Master first referred to Qadar v Esure Services Ltd [2016] EWCA Civ 1109 wherein the Court of Appeal held that allocation to the multi-track was the point of escape from the fixed costs regime; to provide certainty and to solve a lacuna in the CPR since remedied. Following on from this observation, the Master highlighted that in the present case, having started the case in the Portal, the Claimant then said it was unsuitable and should be seen subsequently as exceptional. This would go against the certainty the Court of Appeal sought to provide by their ruling in Qadar.

Recoverable costs were accordingly limited to those set out in CPR 45 Section IIIA.

Travel: Exceptional circumstances in flight delay claims

Litigation continues in Europe as to what is, and what is not, an exceptional circumstance in airlines being able to rely upon the Article 5(3) exception to paying compensation within Regulation 261/2004. Recent County Court experience suggests that claims are getting more numerous, not less, and different issues continue to arise. Two recent European judgments reinforce the division between events inherent in an airline’s operation and those outside its control.

Germanwings GmbH v Wolfgang Pauels (Case C-501/17) considered a loose screw which caused damage to an aircraft tyre, such that the aircraft was delayed. It was assumed the screw had been on the runway and encountered upon landing. The Court carefully considered that tyres are a crucial part of an aircraft, subject to regular checks and maintenance, and are at permanent risk of damage for any number of reasons. Considering the speed at which pre-take-off checks need to be made, to ensure the safety of passengers, and that the runway was not within the control of the airline, it was determined that malfunction of a tyre caused solely by a foreign object on the runway was an extraordinary circumstance. The question as to whether or not Germanwings used all the resources at its disposal to avoid delay thereafter was left to the referring court to decide.

Two months later, in June 2019, judgment was handed down in André Moens v Ryanair Ltd (Case C-159/18). The issue was petrol on the runway at Treviso airport. It was noted as a preliminary point that the referring court had not provided information as to whether or not the petrol had come from the carrier operating the flight, Ryanair. Following the judgment in Germanwings, where an object causing damage or delay did not come from the operator, it was held that petrol causing closure of the runway was an extraordinary circumstance and no compensation was payable. Given the closure was binding on any and all departures, there was effectively no necessity to consider whether the airline could have used its resources to avoid delay. The Court did not determine where the petrol had come from and the ruling specifically stated “when the petrol in question does not originate from an aircraft of the carrier that operated the flight”. Meanwhile, Lisbon has asked for a preliminary ruling (LE v Transport Aéros Portugueses S.A. Case C-74/19) as to delay of both outward flight due to diversion, and then the inbound flight to have been provided by the same aircraft. The Court is asked to consider whether a passenger, biting other passengers and assaulting crew members to such an extent that the captain diverted to the nearest airport, was an extraordinary circumstance.