Keoghs Insight

Author

Mark Sanderson

Mark Sanderson

Solicitor

T:01204 678782

Credit hire in the MoJ Portal

AWARE19/07/2017
Credit Hire Aware 12

The Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents, or The MoJ Portal or “the protocol”, has been part of the system, in one guise or another, for over 7 years (April 2010). It has seen some revision, to expand the value of claims taken in and extend into other compensable areas. Lord Justice Jackson is a staunch supporter, given it supports his costs cutting measures1. He has also commented that “…the RTA process is carefully designed to whittle down the disputes between the parties as the case passes through the various stages.” Perhaps not all practitioners and users of the protocol process may agree with this statement, but it is clearly a common view of their lordships, with Lord Justice Briggs saying: “First and foremost, the RTA protocol is a clear, detailed and precise code, negotiated between sophisticated stakeholder groups under the auspices of the Civil Justice Council, into which the Court should be slow to imply terms.2

While the court should be slow, it has perhaps not been as slow as Briggs LJ may have liked. In Mullholland v Hughes, a conjoined appeal heard before HHJ Freedman, the court considered the Portal process and three key points for the appellant.  While two of those points (whether the payment at the close of Stage 2 was an admission, and should the claimant have to repay the interim payment where damages are less) were held to be incorrect, the learned judge found that due to the confines of the drafting of the protocol, (as well as consideration of part 16 of the CPR) that a defendant must raise its arguments within the remit of Stage 2, if it is to pursue them at Stage 3.  This is not, perhaps, what stakeholder groups envisaged when they drafted “the defendant must also explain in the counter-offer why a particular head of damage has been reduced. This explanation will assist the claimant when negotiating a settlement and allow both parties to focus on those areas of the claim that remain in dispute.3”, or when they referred to Part A of the Court Proceedings Pack containing only the “…supporting comments and evidence from both parties on any disputed heads of damage…4”.

It is perhaps telling that the head of damage to which HHJ Freedman provided his decision was that of credit hire, in particular the first rule of credit hire, need, - it isn’t self-proving. It is unlikely that the same issue would have arisen in relation to personal injury, given that the process was purpose designed for resolving personal injury (and arguable designed to avoid vehicular related damages).

As a consequence of HHJ Freedman’s decision, defendants, and those representing them, are now having to produce a “pleading” to explain why a head of damage has been reduced. Given that the courts are the given arbiters of the Protocol, it was perhaps inevitable that a pleading would become standard within a system that was designed to escape that eventuality. While HHJ Freeman’s decision in Mulholland predated that of Jackson LJ in Phillips, maybe it was the ratio behind Mulholland that prevented Jackson LJ from affirming it, (despite the suggestion to the bench in Phillips by the appellant). The Mulholland decision is at odds with Jackson LJ’s view point when he stated, in reference to CPR 8B, “This modified procedure is designed to minimise the expenditure of further costs and in the process to deliver fairly rough justice.”

These decisions of the Court of Appeal and the county court do not cause much concern for the personal injury handler/practitioner, until “Vehicle Related Damage” rears its head. In those cases, what is good sauce for the goose must be good sauce for the gander? If the defendant raises an issue within the negotiation, then the claimant needs to respond or the claim fails.

As need is rule one, when a defendant raises it and a claimant fails to respond, it is not open to the Judge to create a situation that permits a claimant the opportunity in Part 7 to perfect.  In the case of Hussain v Khaliq, at first instance, the district judge was confronted with the conundrum where need had been raised as an issue by the defendant, but not dealt with by the claimant. The District Judge decided she was able to dismiss the hire claim, but saw that would be the proverbial windfall for the defendant. On the other hand, if she imposed a finding of need, in essence finding need was self-proving, that would be appealed. The District Judge therefore not wishing to operate the “Judgment of Solomon” elected to deal with the other disputed losses, issue judgment for those heads before transferring the hire to Part 7 for resolution.  The defendant appealed the decision.

The claimant accepted the point that the action should have remained in Part 8, but wanted the action to be heard at a further Part 8 hearing, with a decision that provided no order as to costs of the appeal. No agreement could be reached on those terms so the appeal proceeded to a hearing. The appeal was determined by HHJ Platts. The claimant was represented by a letter, having declined to be orally represented and the defendant by counsel. HHJ Platts provided his judgment. He was initially captivated by the claimant’s argument that the action should be remitted for a further hearing; however having considered Part 8B, in particular para 6.3, it was plain to see that the clear focus of the protocol was for the judge to determine the case on the comments and evidence provided within the ambit of those rules. He agreed with the parties that the Judge was wrong following Philips v Willis to transfer the case out for the purpose of a party providing evidence to points raised within Stage 2. HHJ Platts concluded that if the case was remitted the district judge who heard the case would be in no better position that he or the district judge who heard the case at first instance.  The inevitable consequence being the claim for credit hire must be dismissed in the absence of any evidence proving need.

In terms of costs, the judge made the following observations. He determined that the claimant could have conceded the issue. He then focused on the issue of QOCS. He determined that QOCS should not apply to this case for two reasons.

  1. The personal injury element had been determined by the district judge and so no longer an issue between the parties. The appeal was determining the issue of credit hire, therefore the costs should be enforceable against the claimant.
  2. If he was wrong in relation to the former point, then it was possible for the enforcement of those costs to be brought against the credit hire company, pursuant to CPR 44.16(2)(a).

Points for insurers

If there is no evidence from the claimant on an issue, then ensure that it is raised. If a point is not taken or intimated by either party after it has been raised within the comments at Stage 2, then it  cannot be pursued at a Stage 3 hearing. This also extends to documentary evidence. If you have evidence as to a point, ensure that the same is uploaded and referred to within the comments.

Future issues for determination

Para 7.32 requires that the claimant provides the evidence it intends to rely upon at the outset with the Stage 2 pack. In cases where credit hire is an issue, where the claimant has not provided the evidence at the outset, i.e. impecuniosity or need, is that evidence permitted to be provided at a later date when it was clear it should have been provided at the outset?

Furthermore, should the submission of further comments and evidence, permitted by the Portal software, be permitted by the claimant once the total consideration period has expired? Our view is that it should not but watch this space.

1) Since the 2013 amendment which saw the Fixed Recoverable Costs Regime come into force and the expansion of the Protocol scheme to claims for Personal injury up to £25,000
2) Briggs LJ para 31 of J C and A Solicitors Limited v Iqbal and EUI Limited [2017] EWCA Civ 355.
3) 7.41 of “the Protocol”
4) 7.64(2)(a)  of “the Protocol”