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					 SMALL CLAIMS,
  SMALL PEOPLE

        Inner Temple
Personal Injury Bar Association
        17th April 2007




         Jasmine Murphy
        Hardwicke Building
                                                Small Claims, Small People
                                                            17th April 2007

                              INDEX


1    Introduction                                             Page 3


                       The Small Claims Track


2    CPR 27.1 Scope of the Small Claims Track         Page 4
3    CPR 27.2 Some of the Differences                 Page 5
4    CPR 27.4 Preparation for the Hearing                     Page 8
5    CPR 27.8 The Hearing                             Page 14
6    CPR 27.9 Non-attendance of the Parties           Page 18
7    CPR 27.14 Costs                                  Page 21
8    CPR 27.14(2)(g) Unreasonable Behaviour Costs Page 25


                         Infant Settlements


8    CPR 21.10 The Need for Approval of a Settlement          Page 37
9    PD 21.6 Procedure                                        Page 39
10   Preparation                                      Page 42
11   The Hearing                                              Page 44
12   CPR 21.11A and PD 21.8 Payments Out              Page 47
13   CPR 48.5(2) and (3) Costs                        Page 50


14   Conclusion                                       Page 53




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1.   Introduction


     1.1.   This paper and accompanying seminar is designed to assist
            pupils about to commence their second six in civil practice.
            Whereas the first six will have been spent grappling with a pupil
            supervisor’s complex cases, a large proportion of a second six
            pupil’s work is likely to be dealing with low value cases, usually
            arising out of road traffic accidents, which have been allocated
            to the Small Claims Track.


     1.2.   Additionally, for those intending to practice in the field of
            personal injury, Infant Settlement hearings are standard fodder.
            These hearings bring their own set of rules and procedures.


     1.3.   This seminar is not intended to deal with the subjects already
            covered on the Bar Vocational Course such as the basics of case
            preparation or the finer elements of cross-examination. Instead
            this paper intends to highlight some of the quirks and unique
            features of the Small Claims Track and Infant Settlements so
            that they can be put to use to your advantage when the first
            brief comes along.




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                      THE SMALL CLAIMS TRACK


2.    Part 27.1 – Scope of the Small Claims Track
      CPR 27.1
      (1)  This Part -
      (a)  sets out the special procedure for dealing with claims which
           have been allocated to the small claims track under Part 26; and
      (b)  limits the amount of costs that can be recovered in respect of a
           claim which has been allocated to the small claims track. (Rule
           27.14 deals with costs on the small claims track.)
      (2)  A claim being dealt with under this Part is called a small claim.
           (Rule 26.6 provides for the scope of the small claims track. A
           claim for a remedy for harassment or unlawful eviction relating,
           in either case, to residential premises shall not be allocated to
           the small claims track whatever the financial value of the claim.
           Otherwise the small claims track will be the normal track for-
            Any claim which has the financial value of not more than
               £5,000 subject to the special provisions about claims for
               personal injuries and housing disrepair claims;
            Any claim for personal injuries which has a financial value of
               not more than £5,000 where the claim for damages for
               personal injuries is not more than £1,000; and
            Any claim which includes a claim by a tenant of residential
               premises against his landlord for repairs or other work to the
               premises where the estimated cost of the repairs or other
               work is not more than £1,000 and the financial value of any
               other claim for damages is not more than £1,000)

     2.1.   The majority of claims which end up in a contested small claims
            track hearings where counsel is likely to be instructed are road
            traffic accidents where there is unlikely to be any personal
            injury, or if there is injury it will be very minor. Normally the
            only losses are under £5,000 and relate to repairs to the vehicle
            or write off value, hire of replacement car or loss of use and
            miscellaneous expenses.


     2.2.   The small claims track is intended to be a quick and cheap way
            to decide simple, straightforward cases. Litigants in person are
            sometimes encountered, but in the majority of road traffic cases




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each party is being funded by their motor insurance exercising
their rights of subrogation.




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3.        Part 27.2 – Some of the Differences
          CPR 27.2
          (1)  The following parts of these Rules do not apply to small claims-
               (a)    Part 25 (interim remedies) except as it relates to interim
                      injunctions;
               (b)    Part 31 disclosure and inspection;
               (c)    Part 32 (evidence) except rule 32.1 (power of court to
                      control evidence);
               (d)    Part 33 (miscellaneous rules about evidence);
               (e)    Part 35 (experts and assessors) except rule 35.1 (duty to
                      restrict expert evidence), 35.3 (experts – overriding duty
                      to the court), 35.7 (court’s power to direct that evidence
                      is to be given by single joint expert) and 35.8
                      (instructions to a single joint expert);
               (f)    Subject to paragraph (3) Part 18 (further information);
               (g)    Part 36 (offers to settle); and
               (h)    Part 39 (hearings) except rule 39.2 (general rule –
                      hearings to be in public.
          (2)  The other Parts of these Rules apply to small claims except to
               the extent that a rule limits such application.
          (3)  The court of its own initiative may order a party to provide
               further information if it considers it appropriate to do so.

        3.1.     The small claims track is somewhat unique in that large swathes
                 of the CPR do not apply to it. In particular Part 36 regarding
                 offers to settle and the resulting costs consequences do not
                 apply.   As small claims track cases are limited in the costs
                 recoverable, the formality and automatic costs consequences of
                 Part 36 cannot operate correctly.     However it is important to
                 note that the court can take into consideration offers of
                 settlement   when    considering    whether    there    has    been
                 unreasonable      behaviour        which   could    trigger    costs
                 consequences1.


        3.2.     Consequently, there is often very little incentive for the parties
                 to reach agreement on certain issues and make offers to settle.
                 Therefore some cases, which could have settled following a

1
    See CPR 27.14(3)


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       compromise on liability for example, are often contested until
       trial.   This fact combined with the fact that small claims are
       normally looked after by the most junior employee within the
       solicitor’s firm or in-house legal department often means that
       liability has never really been properly considered by anyone
       before the case reaches Counsel.


3.3.   One of the fundamental principles of the CPR is to encourage
       the parties to make offers and the exclusion of the applicability
       of Part 36 does not take away a party’s right to make an offer.
       Following an analysis of liability it may be apparent that there is
       an obvious split on liability or compromise. Be realistic when
       analysing liability. Usually the correspondence relating to offers
       will be included with the papers. If not, do not be afraid to ask
       if any offers have been made in the past.


3.4.   Even if your view of a realistic compromise is rejected by your
       professional and/or lay client and you receive instructions to
       proceed to trial regardless, it is useful to bear in mind possible
       outcomes on liability for three main reasons:
        Advising your lay client realistically in conference before the
           hearing so that they are prepared for the possible outcome;
        If an offer is made before the hearing you have already
           turned your mind to possible settlement parameters;
        If a split on liability is on the cards, you can address the
           judge in closing submissions on the possible liability
           outcomes instead of ignoring it altogether.


3.5.   CPR Part 32 concerning evidence only applies in the respect
       that the court can control the evidence before it – either by
       limiting it to certain issues, or controlling how it is put before the
       court. Directions will be given in this respect – see later.


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3.6.   As a result, the District Judge hearing the case has a wide
       discretion as to the evidence before him. There are a variety of
       approaches to the conduct of the hearing and to the
       introduction of evidence. Some District Judges take a strict view
       and demand that the introduction and preparation of evidence
       should be to the same standard as a fast track trial.             Other
       District Judges are more laidback and will attempt to make the
       best of what is before them without too much complaint.


3.7.   District Judges also tend to be more interventionist on the small
       claims track than in other tribunals. Be prepared for the District
       Judge hearing your case to fall into one of 3 broad categories:
          Sits back and lets counsel run the case
          Takes over and carries out all examination in chief and cross-
           examination
          Has their own unique style


3.8.   The secret is to be flexible and be prepared to appear before a
       District Judge who is a stickler for procedure.             Often the
       information provided in your papers is scant and unhelpful but if
       you have attempted to find out why certain steps have not been
       taken there may still be time to rectify the situation. At the very
       least you may be in a better position to pacify a grumpy District
       Judge.




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4.   Part 27.4 – Preparation for the Hearing


     4.1.   Your brief should consist of:
             Instructions
             Pleadings
             Directions/Orders
             Statements
             Exhibits
             Relevant Correspondence


     4.2.   When the brief first arrives check that all of these documents
            are included. If some are missing there may be an explanation
            in the instructions.      If there is no explanation, ring up your
            instructing solicitor and find out where documents are if they
            appear to be missing.


     4.3.   If the papers arrive in a muddle with no trial bundle it will help
            to organise your thoughts if you separate out the documents as
            listed above and put them into a trial bundle order before
            starting to prepare it.


     4.4.   It is likely that you will only have one copy of all the papers. It is
            quite likely that when you arrive at court that the other side
            and/or the judge will not have all the statements or exhibits. It
            is very likely that no one has thought of preparing a witness
            bundle.


     4.5.   Therefore it is good practice to make at least one and preferably
            two copies of your trial bundle before you start to mark up and
            scribble on what you have.        Punch holes in the bundles and
            keep each bundle together with treasury tags or in a file. If you


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               have been sent original documents, make sure that you keep
               these separate and do not start highlighting them with
               fluorescent orange marker pens.              Make copies of original
               documents for your own personal trial bundle.


      4.6.     At the same time as allocating the matter to the small claims
               track, the District Judge would have given standard directions
               without a hearing. These can be found at the Appendixes to
               Practice Direction 27.        If it appears to the District Judge
               considering the Allocation Questionnaires that there will need to
               be special directions, such as for an expert, there may be a
               preliminary hearing listed to deal with this.             A preliminary
               hearing is a little like a CMC but can be used as a final hearing if
               all parties agree. However the normal course of events is for
               there to be only one hearing – the final hearing.


      4.7.     Documents which each party intend to rely on at trial must have
               been disclosed and served on the other side and the court. If
               the trial concerns a road traffic accident and there are losses
               which are repairs or the write off value of the car there will
               probably be an assessor’s report within the papers. The cost
               of that report may appear in the Particulars of Claim as an item
               of loss. Generally these fees are not recoverable as they are an
               item of costs rather than a loss2. They are not usually viewed as
               an expert’s report so permission is not normally needed by
               virtue of CPR27.5.


      4.8.     One of the standard directions is that original documents shall
               be brought to the hearing. In reality this is not usually insisted
               upon and if you do not have the original documents it should

2
 Clark v Tull and Others [2002] 3 WLR 762. Although this case eventually went to the
House of Lords, parts of the Court of Appeal decision which were not appealed are very
useful in credit hire cases


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        not become too much of an issue. However it is good practice
        to ask your instructing solicitor if they have them and if they can
        send them to you before the hearing.


4.9.    The standard directions encourage the parties to try to agree
        quantum and in a proportion of most cases this will already have
        been agreed between the insurers or solicitors. Make sure you
        have the relevant correspondence about this. If it appears in
        preparation that no useful points can be made attacking the
        level of the other side’s claim, take instructions as to whether
        quantum can be agreed on the day.


4.10.   Normally the directions will direct that statements have to be
        served at least 14 days before the hearing.                   If the
        correspondence does not reveal when instructing solicitors
        served the statements, ring them up and find out. If it was less
        than 14 days try to find out the reason for late service. District
        Judges tend to give short shrift to complaints at the hearing
        about late service of statements but it is always good to be
        prepared in case a point is taken.


4.11.   If there are witness statements from your witnesses, make
        sure that they are signed. If all you have is an unsigned copy,
        ring up your solicitor and ask for a signed one.             If your
        instructing solicitors have never managed to get the statement
        signed, make copies and get your client to sign them at court.
        This will enable signed copies to be given to the other side and
        the judge before you go in to court.      If the client makes no
        changes to the statement and the unsigned copy has already
        been served, there may be no issue taken as there will be little
        prejudice.   If, however, your client wants significant changes




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        made to the statement, be prepared to resist objections from
        both the judge and counsel on the other side.


4.12.   Quite often you will find, instead of a statement, a witness
        questionnaire filled in by hand. As long as it:
        o shows the name and address of the witness; and
        o has a statement of truth; and
        o is signed and dated; and
        o is readable
        there is little room for objection. If there is no statement of
        truth or it does not show name and address, this can usually be
        rectified orally in court. However difficulties will arise if you
        have a deficient statement or accident questionnaire and the
        witness does not attend court.


4.13.   Photographs, either of the scene of the accident or of damage
        to vehicles, can be of vital importance. Faced with two parties
        describing two completely different accidents, the District Judge
        will normally regard the real evidence in the case ie photographs
        as determinative to their decision.


4.14.   If you have been provided with photographs, either originating
        from your client or the other side, make sure the photographs
        are clear. If only one set of originals has been supplied, use a
        colour photocopier as opposed to black and white to make
        copies. Put them in an order and number them so that there
        are 4 bundles: one for the judge, witness, other side and
        yourself. On the day, instructions having been obtained from
        your client, try to agree the photographs with the other side if
        possible.




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        4.15.    What if the case involves an issue where photographs would be
                 useful ie whether one party was in the wrong lane approaching
                 a roundabout, but there are no photographs showing the signs
                 visible on approach from the roundabout? If you have time you
                 could suggest to instructing solicitors that the client goes and
                 takes some photographs and either prints them out or develops
                 them in time for trial.


        4.16.    Photographs are very important for your own analysis of liability.
                 When looking at photographs of the scene look out for road
                 signs, road markings, how busy the traffic is etc.                When
                 considering photographs of damage, think logically: could this
                 damage have been caused by the accident as described by each
                 party?


        4.17.    Tools of the trade include a couple of toy cars and an up to
                 date copy of the Highway Code.             Use the cars and try to
                 recreate the accident according to each party’s account. Often it
                 becomes apparent that the accident just could not have
                 happened in the way one party claims that it did.


        4.18.    Although a breach of the Highway Code is not in itself proof of
                 negligence, it sets out the standard expected of a reasonably
                 competent driver3.        If there have been any breaches of the
                 Highway Code by your client or the other side, be prepared to
                 tackle them. A roundabout is a common scene of accidents and
                 the Highway Code is very clear on the rules of roundabouts and
                 has helpful illustrations.    Additionally the Highway Code gives
                 useful charts showing the recommended distances to keep
                 between cars in moving traffic and also stopping distances.



3
    Slater v Bancroft 19/11/1999 Court of Appeal, Lawtel Doc No. AC8400558


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4.19.   Finally, just a point on interest. As the amounts claimed in the
        particulars of claim are fixed amounts unlike special damages in
        personal injury pleadings, the correct rate is 8%, the judgment
        rate. However, if a different rate ie 6 or 7% is pleaded in the
        particulars of claim, the claimant will generally only recover what
        it has pleaded. Claims for credit hire do not normally attract
        interest as it is unlikely that the claimant will have made any
        payments but if this does arise, check the situation with the
        claimant.


4.20.   It can be confusing at the end of a case to then have to work
        out interest and costs. It is often easier to keep a page in your
        notebook headed up with WIN and another with LOSE.              When
        preparing the case you can note down all the fixed costs, fees
        and interest calculations on those pages so that at the end of
        judgment you can just turn to that page.




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5.       Part 27.8 – The Hearing
         CPR 27.8
         (1)  The court may adopt any method of proceeding at a hearing
              that it considers to be fair.
         (2)  Hearings will be informal
         (3)  The strict rules of evidence do not apply.
         (4)  The court need not take evidence on oath.
         (5)  The court may limit cross-examination.
         (6)  The court must give reasons for its decision.

        5.1.   Make sure that you arrive in plenty of time and take your toy
               cars and the Highway Code with you.          Find your client and
               witnesses if you have them. Take instructions from your client
               and try to have a word with Counsel on the other side. See if
               you can agree quantum/photographs/plans/interest outside
               court.


        5.2.   In some cases you may not have a legally qualified person on
               the other side. A party is entitled to represent themselves and
               on the Small Claims Track is also entitled to bring a lay
               representative to represent them in court. Bear in mind that, if
               you are faced with a lay representative alone, without their
               client, the lay representative has no right of audience4.


        5.3.   Most small claims are listed for between 1 to 2 hours. Cases are
               normally heard in the District Judge’s room. Layout varies but it
               is more likely to be the parties sitting on opposite sides of a
               table with the District Judge at the head of the table than a
               court room type setting.


        5.4.   It is very unlikely that the District Judge will require an opening
               from the Claimant.     If you are the Claimant it is polite to


4
    PD27 3.2


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       introduce the parties to the District Judge and to check he has
       all the relevant pleadings, statements, photographs etc. Inform
       the District Judge as to what matters have been agreed and
       what remains in issue.


5.5.   The normal procedure is that the District Judge will not require
       witnesses to swear on oath to tell the truth. If, however, it is a
       particularly tricky case where there is significant doubt as to a
       witness’s truthfulness either party can always ask for evidence
       to be given on oath.


5.6.   The strict rules of evidence do not apply in that the District
       Judge may be somewhat relaxed about the introduction of
       hearsay evidence. This is helpful if one of your witnesses does
       not attend the trial to give evidence and be cross-examined. If
       he has provided a signed, dated witness statement with
       statement of truth and this has been properly served on the
       other side and the court you can ask the judge to view this as
       hearsay evidence and place appropriate weight upon it.


5.7.   Although the strict rules of evidence do not apply, the standard
       directions normally state the court may decide not to take into
       account a document or the evidence of a witness if no copy of
       that document or no copy of a statement or report by that
       witness has been supplied to the other parties.


5.8.   Therefore witnesses who turn up on the day without having
       provided a statement before will not usually be allowed to give
       evidence. Additionally, in the situation where a witness does not
       attend but has provided a witness questionnaire which has no
       statement of truth, the judge may exercise his discretion not to
       allow that evidence at all.


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5.9.    Issues as to whether certain evidence should be allowed should
        be flagged up to the judge before commencing calling the
        Claimant’s evidence. These issues can either be dealt with first
        or when that witness is due to be called.


5.10.   As previously stated, some District Judges have their own
        unique style of conducting a small claims hearing.           Practice
        Direction 27.4 identifies some different styles that District
        Judges can use. These include asking questions of witnesses
        himself before anyone else or hearing all the evidence in chief
        before allowing any cross-examination. District Judges are often
        quite interventionist so be prepared for the District Judge to ask
        direct questions of the witnesses and of you. The District Judge
        can also limit cross-examination and will be aware of keeping
        the matter to its time limit.


5.11.   After all the evidence has been heard, brief closing submissions
        will be made with the Defendant going first.     After submissions
        the District Judge will normally go straight into his judgment.


5.12.   Immediately after judgment has been given, it may be apparent
        that for some reason there is scope for appeal. If so, the best
        way forward is to ask the Judge to give, or expand upon, his
        reasons for his decision. If you still feel that these reasons do
        not satisfy you, you can always ask for permission to appeal.
        However permission is rarely given.


5.13.   It has sometimes happened that the District Judge, after hearing
        the evidence, has felt unable to come to a conclusion on liability
        and finds that although there was an accident, neither party was
        negligent.    In Cooper v Floor Cleaning Machines &


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                 Crompton5 the Court of Appeal dealt with the correct
                 procedure to be followed if this happens.     The District Judge
                 should raise his provisional view that neither party proved its
                 case at the end of submissions. This would allow the parties to
                 carry out a more detailed analysis of the facts as it would be an
                 exceptional situation for a judge to conclude that neither party
                 had been negligent.




5
    [2003] 2004 RTR 14


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6.    Part 27.9 – Non-attendance of Parties
      CPR 27.9
      (1) If a party who does not attend a final hearing
              (a) Has given written notice to the court and the other party at
                  least 7 days before the date of the hearing date that he will
                  not attend;
              (b) Has served on the other party at least 7 days before the
                  hearing date any other documents which he has filed with
                  the court; and
              (c) Has, in his written notice, requested the court to decide the
                  claim in his absence and has confirmed his compliance with
                  paragraphs (a) and (b) above,
      The court will take into account that party’s statement of case and any
      other documents he has filed and served when it decides the claim.
      (2) If a claimant does not
              (a) Attend the hearing; and
              (b) Give the notice referred to in paragraph (1),
      The court may strike out the claim.
      (3) If
              (a) A defendant does not-
                       i. Attend the hearing; or
                      ii. Give the notice referred to in paragraph (1); and
              (b) The claimant either-
                       i. Does attend the hearing; or
                      ii. Gives the notice referred to in paragraph (1),
      The court may decide the claim on the basis of the evidence of the
      claimant alone.
      (4) If neither party attends or gives the notice referred to in paragraph
          (1), the court may strike out the claim and any defence and
          counterclaim.

     6.1.   CPR 27.9 provides for notice to be given if a party cannot
            attend, but this is a provision which is rarely used.           What
            happens in the situation when it is 9.55am, your client has not
            yet arrived and no notice has been given. What do you do? By
            this stage you probably have already telephoned your solicitor to
            ask them to call any telephone numbers they have for your
            client. If they have a mobile number for your client, it is always
            useful to take it and there is nothing to stop you trying the
            mobile number yourself. Explain the situation to your opponent
            and the usher. If your client is on his way to court try to be put


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       towards the back of the list.       If the judge calls you in be
       prepared to explain the situation and ask for more time.


6.2.   If it is clear that your client is not going to turn up, what then?
       CPR 27.9 does not apply as the client, although not present in
       person, is represented by you.         However, if you are the
       claimant, you will have difficulties in proving your case without a
       live witness.


6.3.   You will need to take instructions as to whether your
       professional client wishes to proceed in court and try to prove
       your case on the basis of the statements or whether you are
       instructed to make an application to adjourn. Bear in mind that
       the court is likely to order you to pay the costs of the
       adjournment – usually counsel’s fees and witness expenses.
       Alternatively this may be the encouragement to try and settle
       outside court. If you are the defendant, however, bear in mind
       that in some cases you may wish to continue in the absence of
       your lay client to put the claimant to proof on liability and
       quantum.


6.4.   An alternative, but not recommended, strategy has been used to
       take advantage of CPR 27.11 which allows for judgment to be
       set aside and a rehearing listed if a party neither attends court
       nor is represented.       Counsel has taken instructions to be
       uninstructed so that his client is no longer represented. This
       may give the client a chance to try to get judgment set aside
       and the case reheard.


6.5.   However this is a risky tactic and one that could easily fail when
       the court later comes to consider whether there was a good
       reason why there was no representation. In fact this has been
       held   to       be   unreasonable   behaviour    attracting     costs


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                 consequences in Ilyas v Walker6. In this case the defendant
                 did not attend the hearing and was his counsel withdrew from
                 the case so that CPR 27.11(1) could be used to get judgment
                 set aside.      The district judge found that the defendant had
                 clearly acted unreasonably by failing to appear.


        6.6.     If the other side does not attend court, is not represented and
                 has not given the notice outlined in CPR 27.9(1) then CPR 27.9
                 applies.     If the claimant does not attend the defendant can
                 make an application to the judge for strike out of the claimant’s
                 case. An application for costs due to unreasonable behaviour
                 could then be made – see later.


        6.7.     If the defendant does not attend, the court will decide the case
                 on the claimant’s evidence alone.      This does not guarantee
                 success for the claimant but in most cases as long as the
                 claimant can prove his case, in the absence of any rebuttal it will
                 usually be an easy victory.




6
    [2002] CL February 2003 43


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7.   Part 27.14 – Costs on the Small Claims Track

     CPR 27.14

     (1) This rule applies to any case which has been allocated to the small
     claims track unless paragraph (5) applies.

     (Rules 44.9 and 44.11 make provision in relation to orders for costs
     made before a claim has been allocated to the small claims track)

     (2) The court may not order a party to pay a sum to another party in
     respect of that other party's costs, fees and expenses, including those
     relating to an appeal, except—

     (a) the fixed costs attributable to issuing the claim which—

     (i) are payable under Part 45; or

     (ii) would be payable under Part 45 if that Part applied to the claim;

     (b) in proceedings which included a claim for an injunction or an order
     for specific performance a sum not exceeding the amount specified in
     the relevant practice direction for legal advice and assistance relating
     to that claim;

     (c) any court fees paid by that other party;

     (d) expenses which a party or witness has reasonably incurred in
     travelling to and from a hearing or in staying away from home for the
     purposes of attending a hearing;

     (e) a sum not exceeding the amount specified in the relevant practice
     direction for any loss of earnings or loss of leave by a party or witness
     due to attending a hearing or to staying away from home for the
     purposes of attending a hearing;

     (f) a sum not exceeding the amount specified in the relevant practice
     direction for an expert's fees; and

     (g) such further costs as the court may assess by the summary
     procedure and order to be paid by a party who has behaved
     unreasonably.

     (3) A party's rejection of an offer in settlement will not of itself
     constitute unreasonable behaviour under paragraph (2)(g) but the



                                     22
                                                    Small Claims, Small People
                                                                17th April 2007

 court may take it into consideration when it is applying the
 unreasonableness test.

  (4) The limits on costs imposed by this rule also apply to any fee or
 reward for acting on behalf of a party to the proceedings charged by a
 person exercising a right of audience by virtue of an order under
 section 11 of the Courts and Legal Services Act 1990 (c.41) (a lay
 representative).

 (5) Where —

 (a) the financial value of a claim exceeds the limit for the small claims
 track; but

 (b) the claim has been allocated to the small claims track in
 accordance with rule 26.7(3),the small claims track costs provisions will
 apply unless the parties agree that the fast track costs provisions are
 to apply.

 (6) Where the parties agree that the fast track costs provisions are to
 apply, the claim and any appeal will be treated for the purposes of
 costs as if it were proceeding on the fast track except that trial costs
 will be in the discretion of the court and will not exceed the amount set
 out for the value of claim in rule 46.2 (amount of fast track trial costs).

7.1.   Costs on the Small Claims Track are strictly limited as set out
       above. A successful claimant in a typical road traffic claim can
       usually only recover:
         Fixed commencement costs
         Court fees
         Witness travel expenses
         Witness loss of earnings/leave
         Any expert’s fees


7.2.   Fixed commencement costs are found in Table 1 of CPR Part
       45. The amount of fixed costs is also shown on the claim form
       itself. It is quite usual for the amount of fixed costs shown on
       the claim form to bear no resemblance to what can actually be
       claimed. If your instructing solicitors have put a higher figure
       than shown in the Table on the claim form it is good practice to



                                 23
                                                 Small Claims, Small People
                                                             17th April 2007

       clarify why they have and warn them in advance that, if
       successful, you will only recover fixed costs in accordance with
       Part 45.


7.3.   Court fees will certainly include the issue fee and also an
       allocation fee if the claim is over £1,500. The issue fee varies
       according to the value of the claim and will also be shown on
       the claim form.   www.hmcourts-service.gov.uk provides up to
       date figures for issue fees and allocation fees if you want to
       check what the fee at the time was.


7.4.   Witness expenses are allowed to compensate witnesses,
       including a party, for their expenses in travelling to court or
       staying away from home (for example paying the babysitter?).
       There is no limit on the amount of expenses that can be claimed
       but the court will only order the losing party to pay reasonably
       incurred expenses. Take instructions about whether the witness
       wants you to claim this and also how much should be claimed
       before you go into court.


7.5.   If the expenses are quite high or the witness cannot stay until
       the end of the case, either try to agree their expenses with the
       other side before court or ask the witness about their expenses
       in attending court in examination in chief. Alternatively, if the
       expenses are modest and there is unlikely to be much of an
       issue to be taken, you could wait until judgment has been given
       and if successful, make an application for the witness expenses
       then. If there is no issue taken on the amount by the losing
       party, the judge will normally allow the expenses without
       needing to hear from the witness themselves.




                               24
                                                               Small Claims, Small People
                                                                           17th April 2007

        7.6.     Loss of earnings or loss of leave of a party or a witness
                 are restricted by virtue of CPR PD 27 7.3(1) to £50 per person
                 per day.    A recent amendment to the Rules formalised the
                 practice of compensating witnesses for loss of leave in the same
                 way as loss of earnings if they took a day’s holiday to attend
                 court. Take instructions from the individual about whether they
                 want to claim this as you may find that that they only work part
                 time, are unemployed or are being paid by their employer
                 anyway without losing any holiday time to attend court. If they
                 do wish to claim some loss of earnings, find out their net
                 earnings, what they take home a week/month to calculate a
                 daily rate. Unless agreed, the judge will want to know what the
                 witness does for a living, whether they work part time or full
                 time and their net earnings.        As above, this can either be
                 brought out in examination in chief or at the end of the case
                 after judgment has been given.


        7.7.     Expert’s fees are limited by virtue of CPR PD 27 7.3(2) to
                 £200.


        7.8.     If the defendant succeeds in having the claimant’s claim
                 dismissed all that can be claimed is witness expenses and
                 witness loss of earnings. The same applies for a successful Part
                 20 Claimant7. As the defendant, there will have been no issue
                 fee paid, no allocation fee as the claimant pays this, and the
                 fixed costs are the fixed commencement costs that the claimant
                 would only be able to recover as they commenced the claim.




7
    Hibbert v Bates CC [2002] CL 03/57 and Shah v Oliver [2004] CL 05/364


                                           25
                                                              Small Claims, Small People
                                                                          17th April 2007



8.        CPR 27.14(2)(g) Unreasonable Behaviour Costs


        8.1.       The only way to recover costs in excess of those outlined in the
                   earlier section would be if it can be proved that the other side
                   behaved unreasonably. CPR 27.14(2)(g) makes provision for a
                   party to recover additional costs, which would be summarily
                   assessed, if the other side has behaved unreasonably. In a case
                   which merits such an application, district judges are often quite
                   glad to be given the opportunity to penalise an unreasonable
                   party.   Current Law usually has a selection of small claims
                   decisions which give a flavour of the type of situation where a
                   district judge will consider making such an order.


        8.2.       Rejection of an offer of settlement is the only instance of
                   behaviour given in the Rules8 that may be taken into
                   consideration by the court when considering whether there has
                   been unreasonable behaviour. This is a recent amendment to
                   the rules which clarified the practice of the court to take into
                   account offers made by the parties, even though Part 36 does
                   not apply:


           8.2.1. Clohessy v Holmes [2003] CL 04/418
                     The defendant had made a pre-action offer to settle on a
                     75%/25% liability basis in favour of the claimant. The facts
                     of the accident were available and were consistent from the
                     outset of the case. The claimant rejected the offer and when
                     he later tried to resurrect it, the defendant refused. At trial
                     the claimant’s case was dismissed.        The defendant was
                     granted £400 costs because the court found that it was clear
                     from the outset that the claim would fail. If the claimant had

8
    CPR 27.14(3)


                                            26
                                                    Small Claims, Small People
                                                                17th April 2007

         made a proper assessment of liability he would have realised
         that.        To reject an early, favourable offer and then to
         commence proceedings constituted unreasonable behaviour.


  8.2.2. A & B Investments v Promise Bank Ltd [2005] CL
         06/Jan
         In a claim worth only £375, the claimant had offered a 50/50
         split on liability 25 days before trial which the defendant
         rejected.       At trial the court made a finding of 50/50 split
         liability.    The claimant was awarded unreasonable conduct
         costs as the defendant’s conduct had been unreasonable
         given the size of the claim, the reasonableness of the offer
         and the amount of costs claimed. The judge clearly felt that
         his time had been wasted and referred to the overriding
         objective, effective use of court time and the court’s
         resources.


8.3.   Late settlement by a defendant has been held to be
       unreasonable behaviour:
  8.3.1. Taylor v KD Coach Hire [2000] CL 447
         This small claim included an element of personal injury. The
         defendant had not responded to pre-action correspondence
         and only after the claimant had issued and summary
         judgment had been obtained did the defendant seek to settle
         the case and pay the claimant’s fixed costs.         The claimant
         continued to the assessment of damages hearing and sought
         summary assessment of costs due to the defendant’s
         unreasonable behaviour. The District Judge found that the
         defendant had acted unreasonably but only ordered the
         defendant to pay fixed costs. On appeal the Circuit Judge
         found that it was unreasonable for the defendant to wait until




                                  27
                                                Small Claims, Small People
                                                            17th April 2007

      after issue of proceedings before negotiating and summarily
      assessed the claimant’s costs.




8.3.2. Linton v RD Williams Haulage Ltd [2001] CL 516
      After filing a defence denying liability, the defendant made an
      offer of 75% 4 weeks before trial and to settle the whole of
      the claim one week before trial. The claimant accepted that
      offer but sought their costs. The District Judge found that
      the defendant had behaved unreasonably in leaving it so late
      to settle. A reasonable defendant, if looking at the economies
      of the case as a reason for settling, should do so as soon as
      possible and this was especially true in road traffic accidents.


8.3.3. West Yorkshire Printing Co Ltd v Edwards [2002] CL
      February 2003 41
      After disputing liability, the defendant sent a cheque for the
      claim in full plus fixed costs two days before the hearing. The
      claimant advised the defendant that it would still be attending
      to seek its costs for unreasonable conduct but the defendant
      did not attend the hearing. The District Judge found that the
      defendant had behaved unreasonably by having defended the
      case on a factual basis and then without explanation settled it
      2 days before the final hearing.     The defendant had been
      notified of the claimant’s intention to make this application
      and the duty was upon the defendant to attend and show
      cause.


8.3.4. Gillies v Goulding [2002] CL March 2003 57
      After months of negotiation the claimant was forced to issue
      proceedings for damage to his parked and unattended car.
      The defence disputed quantum and asserted that the


                            28
                                                  Small Claims, Small People
                                                              17th April 2007

         proceedings had been issued prematurely. The defence was
         then struck out as disclosing no ground for defending the
         claim. The defendant then sought to set aside that order, the
         claimant opposed it and sought unreasonable conduct costs.
         Four days prior to the hearing the defendant offered to settle
         the claim in full but refused to pay the claimant’s costs. The
         claimant succeeded in their application for costs as the judge
         found that the defendant should have acknowledge liability
         and dealt with quantum, the defendant’s admission came far
         too late and the behaviour was totally unreasonable.


  8.3.5. Casalli v Patel [2004] CL 05/378
         Despite the defendant moving abroad and being very unlikely
         to attend trial, his solicitors filed a defence and counter claim
         keeping liability in issue. 9 days before trial the defendant
         settled the claim in full and withdrew the counterclaim but
         refused to pay more than the claimant’s fixed costs.           The
         claimant issued an application for unreasonable conduct costs
         which were granted on the basis that the defendant’s
         solicitors should not have issued a defence and counterclaim
         when it was clear that the defendant had no real intention of
         defending the claim since moving abroad. The court said that
         this was not a case of actions being ―a little dilatory‖ (perhaps
         the court was referred to Price v Partington [2003] – see
         below).    The conduct complained of had been well outside
         the norm of standard negotiating tactics and totally without
         merit.


8.4.   However, contrast the above cases with the following cases
       where late settlement was not found to be unreasonable
       behaviour:
  8.4.1. Stringer v Kordan [2000] CL 446


                               29
                                               Small Claims, Small People
                                                           17th April 2007

      After filing a defence denying that an accident took place, the
      defendant gave instructions that he wished to settle the
      claim. An offer to settle the claim in full with fixed costs was
      communicated to the claimant 17 days before the hearing
      and re-iterated twice subsequent to that. The claimant said
      that they would not be prepared to accept the offer and
      would attend the hearing to argue for their costs to be
      summarily assessed due to late settlement. At the defendant
      made a cross application for their costs due to the claimant’s
      unreasonable behaviour in forcing them to attend the
      hearing.    The District Judge dismissed both applications as
      neither party had behaved unreasonably. For behaviour to be
      unreasonable, the defendant’s conduct must go somewhat
      further to take it outside the norm of the usual tactics of
      negotiation.


8.4.2. Lockley v Lea [2001] CL 518
      The defendant filed a defence to the claimant’s claim but two
      weeks before the hearing date but after the exchange of
      witness statements a settlement, discounted for contributory
      negligence, was reached.      The claimant refused to accept
      fixed   costs,   arguing   that   the   defendant    had     acted
      unreasonably in settling at a late stage.         District Judge
      refused to award anything more than fixed costs as the
      defendant had behaved entirely reasonable and responsibly in
      settling the case after having the opportunity to peruse the
      evidence.


8.4.3. Price v Partington [2003] CL 04/419
      The defendant had denied liability until the day before trial
      when he offered to settle the claim on a full liability basis.
      The court held that the claimant was entitled to fixed costs


                            30
                                                                Small Claims, Small People
                                                                            17th April 2007

                     only. To make a finding of unreasonable conduct where a
                     party had been a little dilatory or had failed to consider a
                     matter which, with hindsight, it should have done was
                     difficult. If the instant case had gone to trial and the court
                     had found wholly for the claimant, it would have been very
                     unlikely that an award of costs would have been made
                     against the defendant9.


        8.5.      Late discontinuation by the claimant can also amount to
                  unreasonable behaviour:
           8.5.1. Mahmood v Watson [2001] CL 531
                     On the morning of the contested hearing the defendant’s
                     solicitors received notice of discontinuance by the claimant.
                     The defendant had also counterclaimed against the claimant
                     but no mention was made of the counterclaim in the notice.
                     The defendant attended the hearing and the claimant did not.
                     The defendant succeeded on the counterclaim and also their
                     application for costs as defending the counterclaim and then
                     discontinuing the claim at a very late stage and not attending
                     the counterclaim was unreasonable behaviour.


           8.5.2. Safecar Security Services Ltd v South Hams DC [2002]
                     CL March 2003 58
                     The claimant failed to comply with directions and the day
                     before the final hearing discontinued the claim.                 The
                     defendant applied for costs on the ground that the claimant
                     had acted unreasonably. The application succeeded and the
                     District Judge found that the claimant had not attempted to
                     progress the matter in the proper manner nor cooperated in
                     an attempt to settle.         It was also unreasonable for the
                     claimant to discontinue in the knowledge that the matter had

9
    But compare this case to Casalli v Patel [2004] CL 05.375


                                              31
                                                 Small Claims, Small People
                                                             17th April 2007

         been allocated to small claims and therefore no costs
         consequences would follow.


  8.5.3. Bentley v Howell [2005] CL 06/Jan
         Two days before trial the claimant discontinued his claim and
         offered to pay the defendant’s counterclaim but no costs.
         The defendant applied for his costs in full and succeeded.
         The court referred to Mahmood v Watson [2001] awarded
         costs on the basis that the claimant had acted unreasonably
         because:
                    He had issued proceedings early and in breach of
                     the Pre-Action Protocol;
                    He had failed to disclose any evidence, despite
                     being asked on several occasions and ordered by
                     the court;
                    He had entered judgment in default in the near
                     certain belief that the defendant intended to
                     defend the claim;


8.6.   Conduct of the parties at trial or before can sometimes
       lead to a finding of unreasonable behaviour:


  8.6.1. Devine v Franklin [2002] EWHC 1846 (QB) Lawtel Doc
         No. 103794
         This was a case which made its way to the High Court after
         one of two neighbours warring over a Leylandii hedge drove
         his car into the other neighbour as he was getting out of his
         car. Gray J said that ―he took a pretty dim view of the entire
         dispute and the inability of the parties to behave in an adult
         manner‖. Although the matter had been allocated to the fast
         track only £695 damages were awarded for injury but the
         claimant received £7,000 in costs. On the defendant’s appeal


                                  32
                                             Small Claims, Small People
                                                         17th April 2007

      against costs, the High Court found that there had been
      exaggeration of the claim and that this was really a small
      track claim. Therefore the claimant should get his fixed costs
      but in addition the claimant was awarded £1,000 costs for the
      defendant’s unreasonable behaviour, namely the manner in
      which he drove his car immediately prior to the collision, his
      wish to have the case allocated to the multi track and his
      challenge to video evidence.




8.6.2. Fieldhouse v Dunn [2003] CL 04/321
      The defendant, who was in person, denied having been
      involved in a road traffic accident and said he knew nothing
      about it. At trial the court found that the defendant had been
      involved in the accident and that the accident was the
      defendant’s fault.   The judge awarded counsel for the
      claimant’s brief fee on the basis of the defendant’s
      unreasonable behaviour because the judge did not believe the
      defendant when he said he knew nothing about the accident.


8.6.3. Rennie v Spa Contractors Electrical [2005] CL 06/Jan
      In a landlord and tenant dispute the district judge found in
      favour of the claimant, describing the defendant’s evidence as
      ―discreditable‖ and ―wholly unreliable‖. Unreasonable conduct
      costs were awarded against the defendant on the basis that
      its evidence was not believed and its approach before and
      during trial was to challenge everything, causing unnecessary
      delay and expense. The defendant appealed that decision,
      arguing that unreasonable behaviour was limited to matters
      of procedure.   The defendant’s appeal as dismissed.         The
      rules did not limit unreasonable behaviour to matters of
      procedure and the district judge had a wide discretion. If a


                           33
                                                 Small Claims, Small People
                                                             17th April 2007

         district judge considered that in defending a claim one party
         had put the other to unnecessary expense he would be
         entitled to award unreasonable behaviour costs.


8.7.   Bringing or defending a claim unreasonably has been
       considered as unreasonable behaviour:


  8.7.1. Barron v Lawler [2001] CL February 2002 66
         The claimant’s claim was dismissed after the claimant’s
         evidence in court was different to that set out in his defence
         and witness statement and the damage to the vehicles and
         photographic evidence did not support his case either. The
         district judge granted the defendant his costs as he found
         that the unreasonable conduct was on the part of the
         claimant’s solicitors because if they had asked themselves
         whether there was any reasonable prospect of success the
         action would not have continued.


  8.7.2. Hilton v STI Ltd (T/a Stonell Direct) [2005] CL 06/Mar
         In 2005, in a contract case, the claimant sued the defendant
         which had taken over a company in 2004 that the claimant
         had bought unsatisfactory stone tiles from in 1997.           The
         defendant provided the claimant with documents to show it
         had taken over the now defunct company in 2004 and that
         the contract excluded liability for any contract pre-dating the
         purchase of the business. The claim against the defendant
         was eventually dismissed and unreasonable conduct costs
         awarded against the claimant for proceeding against the
         wrong defendant when she had been told that it was the
         wrong defendant.


  8.7.3. Card v Metroline [2005] CL 06/Sep


                               34
                                                  Small Claims, Small People
                                                              17th April 2007

         The claimant sued the defendant on the basis that his car had
         been damaged in a hit and run. The claimant had identified
         the defendant because two notes were left on his windscreen
         indicating that four people had witnessed the accident.
         However, at trial the claimant just relied on these notes and
         hearsay evidence and did not call the witnesses. The district
         judge held that there was no proper evidence on which he
         could rely and dismissed the claim.     The defendant got its
         costs as the claimant had behaved unreasonably as the case
         was a non-starter.




8.8.   Litigants in person are not immune from the consequences of
       a finding of unreasonable behaviour either:
  8.8.1. Hayes v Airtours Holidays Ltd [2001] CLYB 512
         The claimant represented himself and lost his holiday claim
         against the defendant.     The defendant asked for its costs
         due to the claimant acting unreasonably by failing to serve
         concise particulars of claim, failing to comply with directions
         and producing 40 documents on the day of trial which were
         irrelevant and turned a 2 and a half hour trial into 2 days.
         The claimant was ordered to pay the difference between the
         actual cost of trial and those costs that would have been
         incurred in a 2 and a half hour trial. Although allowance was
         made for the fact that the claimant was in person, he had
         failed to put his case in order after a CMC and omitted to put
         appropriate evidence before the court which amounted to
         unreasonable and disproportionate conduct.


  8.8.2. Snow v Price [2002] CL March 2003 59
         The defendant, a club, initially asserted that it had evidence
         proving that there was a written contract but failed to disclose


                               35
                                                  Small Claims, Small People
                                                              17th April 2007

         it and at trial stated that no written contract existed. The
         defendant was represented by the president of the club and
         was unable to produce any of the evidence it relied upon in
         support of its defence.         The district judge awarded
         unreasonable conduct costs to the claimant.          The district
         judge stated that although such an order was unusual in a
         small claims hearing where a party was not legally
         represented, the defendant had had ample opportunity to
         disclose the evidence it relied on. At worst there had been a
         deliberate attempt to conceal the truth, at best a cavalier
         approach to the defence.


  8.8.3. Performing Right Society Ltd v Fioravant [2004] CL
         06/Jan
         In a royalties case where the defendant was a litigant in
         person, the defendant was found to have acted unreasonably
         by continuing to defend the case after receiving a very clear
         letter from the claimant’s solicitors explaining its position.
         When the defendant lost (a foregone conclusion said the
         court) costs were awarded against the defendant after the
         date of the claimant’s solicitor’s letter. It was said that the
         court can only assist a litigant in person so far. This case was
         followed in a similar case Performing Right Society Ltd v
         Insole [2006] CL 06/Nov which took the same approach
         on similar facts.


8.9.   It is clear from these cases that it is a matter of the district
       judge’s discretion whether a party’s conduct is unreasonable or
       not. Deliberate flouting of directions or late action taken in a
       case when it was totally unnecessary could lead to the discretion
       being exercised. Although Barron v Lawler could be used by
       the successful party in almost every road traffic case to justify


                               36
                                                    Small Claims, Small People
                                                                17th April 2007

        an application for costs due to unreasonable behaviour, the
        district judge is usually looking for behaviour that goes above
        and beyond the normal range of behaviour.


8.10.   It should be clear from the instructions or the correspondence
        whether there is to be an application for unreasonable behaviour
        either made or opposed, especially now that the court has been
        directed to take into consideration offers. If this is a case where
        this may arise, a statement of costs should be included in the
        papers and it is good to make copies of the costs statement and
        also some relevant cases to take along to court.


8.11.   However, the situation may arise unexpectedly when an
        application for costs due to unreasonable behaviour could be
        made. For example, if a party fails to attend court, or causes an
        adjournment it may be appropriate to seek the costs of trial
        which will normally be your brief fee and any expenses of
        witnesses who have attended.


8.12.   The application will be two fold: establishing unreasonable
        behaviour and then summarily assessing costs.




                                 37
                                                              Small Claims, Small People
                                                                          17th April 2007



                    INFANT SETTLEMENT HEARINGS
9.    CPR 21.10 – Need for Approval of a Settlement
      CPR 21.10
           (1) Where a claim is made
                  a. By or on behalf of a child or patient; or
                  b. Against a child or patient,
           No settlement, compromise or payment and no acceptance of
           money paid into court shall be valid, so far as it relates to the
           claim by, on behalf of or against the child or patient, without the
           approval of the court.
           (2) Where
                  a. Before proceedings in which a claim is made by or on
                      behalf of, or against a child or patient (whether alone
                      or with any other person) are begun, an agreement is
                      reached for the settlement of the claim; and
                  b. The sole purpose of proceedings on that claim is to
                      obtain the approval of the court to a settlement or
                      compromise of the claim the claim must
                                1. Be made using the procedure set out in
                                    Part 8 (alternative procedure for claims);
                                    and
                                2. Include a request to the court for
                                    approval     of    the     settlement    or
                                    compromise.
           (3) In proceedings to which Section II of Part 45 applies, the
               court shall not make an order for detailed assessment of the
               costs payable to the child or patient but shall assess the costs
               in the manner set out in that Section. (Rule 48.5 contains
               provisions about costs where money is payable to a child or
               patient.)

     9.1.   There are three main reasons why a compromise involving a
            child or patient needs to be approved. Firstly, as the court has
            to be satisfied that the compromise is fair, it protects children
            and patients from any mistakes by their legal advisers or
            pressure to settle a case quickly which could mean that the
            claim is settled for far less than it is worth.


     9.2.   Secondly, a court-approved compromise protects the defendant
            as it is the means by which the defendant may obtain a valid



                                       38
                                                           Small Claims, Small People
                                                                       17th April 2007

                discharge from the child or patient’s claim.       Thirdly, if the
                amount is approved by the court it ensures that the money is
                protected and properly looked after by being invested by the
                Court Funds Office on behalf of the child until she reaches
                majority.


        9.3.    The case of Drinkall v Whitwood10 clarified the status of a
                compromise before approval where one of the parties is a child.
                In this case where the child claimant was injured when she was
                knocked off her bicycle, the defendant made a Part 36 offer on
                liability before proceedings were issued. That offer was almost
                immediately accepted on the claimant’s behalf. About eighteen
                months later the defendant reneged on this agreement because
                it wanted a higher degree of contributory negligence.            The
                claimant issued and relied on the letters as proving that there
                was a binding settlement.     The defendant said that until the
                agreement was approved there was no valid compromise
                agreement as the claimant was a child.


        9.4.    The Court of Appeal found that a settlement agreement with a
                child was only a proposed agreement until approved by the
                court and therefore the defendant could renege on it until it had
                been approved. Giving the leading judgment Lord Justice Simon
                Brown made the observation that those acting for child
                claimants may think it prudent to issue proceedings to obtain
                the court’s approval for any partial settlement of the claim so as
                to avoid this potential problem that the defendant may later
                seek to repudiate it.




10
     [2004] 1WLR 462


                                        39
                                                            Small Claims, Small People
                                                                        17th April 2007



10.    PD 21.6 – Procedure
       PD 21.6.2
       In order to approve the settlement or compromise, the information
       concerning the claim that the court will require will include:
       (1)   whether and to what extent the defendant admits liability;
       (2)   the age and occupation (if any) of the child or patient;
       (3)   the litigation friend’s approval of the proposed settlement or
             compromise;
       (4)   in a personal injury case arising from an accident –
             (a)     the circumstances of the accident
             (b)     any medical reports
             (c)     where appropriate, a schedule of any past and future
                     expenses and losses claimed and any other relevant
                     information relating to personal injury as set out in the
                     practice direction which supplements Part 16 (statements
                     of case); and
             (d)     where considerations of liability are raised –
                     (i)    any evidence or police reports in any criminal
                            proceedings or in an inquest; and
                     (ii)   details of any prosecutions brought.
       PD 21.6.3
       (1)   An opinion on the merits of the settlement or compromise given
             by counsel or solicitor acting for the child or patient should,
             except in very clear cases, be obtained.
       (2)   A copy of the opinion and, unless the instructions on which it
             was given are sufficiently set out in it, a copy of the instructions,
             must also be supplied to the court.
       (3)   A copy or record of any financial advice must also be supplied to
             the court.

      10.1.   If a settlement has been reached before proceedings have been
              issued, the correct procedure is to use Part 8 to commence a
              claim for approval of a settlement. If no settlement has been
              reached, Part 7 can be used to issue a claim in the normal way
              and if settlement is reached after issue, an application can then
              be made for approval of that settlement.


      10.2.   The brief to attend an infant settlement should include:
               Pleadings
               Litigation Friend’s certificate of suitability



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                                                                17th April 2007

         Medical Report
         Counsel’s Advice
         Either a consent order or correspondence showing that a
           compromise has been reached and the terms.


10.3.   If there has been agreement on liability which involves a split on
        liability, this agreement will need to be approved by the court as
        well as quantum. Therefore documents relating to liability will
        need to be supplied and Counsel should also have considered
        whether the proposed split on liability is reasonable or not within
        the Advice.


10.4.   On a first reading of the papers, some problems may become
        apparent. For example, your instructing solicitors may not have
        obtained an Advice from Counsel. In most cases the judge will
        not approve the settlement unless he has seen an Advice from
        Counsel in accordance with the Practice Direction recommending
        the proposed settlement.       Explain this to your instructing
        solicitors and suggest that you prepare an Advice.


10.5.   It also sometimes happens that the proposed settlement that
        you have been instructed to ask the court to approve is lower
        than Counsel advised in the Advice. In this situation you will
        need to form your own opinion on quantum. It may be that the
        proposed settlement figure is a little low but still reasonable and
        Counsel has just valued the case a bit too high. Take copies of
        cases along to court and be prepared to explain your opinion to
        the judge if asked.


10.6.   Additionally you could ask your instructing solicitors to contact
        the defendant and alert them to the fact that there is a risk that
        the judge may not approve the settlement. Then the defendant


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        can either choose to increase their offer or to send a
        representative to court to be available to negotiate in case the
        judge thinks that the settlement is too low.


10.7.   If the situation arises that you consider the proposed settlement
        figure is too low, as you have a duty to your client, you may
        have to advise the solicitor that you cannot recommend the
        settlement to the client or to the court. Your instructing solicitor
        may then have to negotiate a higher amount or, failing which,
        get the matter re-listed for an assessment hearing. This would
        also apply if the Advice was that the settlement was reasonable
        but you consider the amount is clearly not enough, or if no
        Advice had been obtained and you think that the claim is worth
        more.


10.8.   If there is no consent order and you can find no correspondence
        from the defendant confirming the proposed compromise in your
        papers and the defendant is not going to attend the hearing, it
        is unlikely that the district judge will approve a compromise as
        there is no evidence of a compromise before him.                You will
        need to ask your instructing solicitor to get the defendant’s
        solicitors   to   fax   through   either   a     consent     order     or
        correspondence agreeing the compromise or alternatively, send
        a representative to attend court to confirm the agreement.


10.9.   On a read through of the papers you may note that the medical
        report refers to ongoing symptoms and gives a prognosis for full
        resolution within a certain period of time but that period of time
        has not yet expired.      The district judge will be unwilling to
        approve a settlement where there are ongoing symptoms unless
        they are very minor or infrequent. Ask your instructing solicitors
        to take instructions from the litigation friend about the child’s


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symptoms and if the symptoms are ongoing it may be best to
adjourn the hearing until those symptoms have resolved.




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11. Preparation


    11.1.   Although the practice direction orders that a copy of Counsel’s
            opinion must be supplied to the court, in about 50% of cases,
            this will not have been done before the hearing. It is advisable
            to take a photocopy of the opinion along with copies of the
            cases referred to, with the awards updated, as well as a
            photocopy of the medical report.


    11.2.   The standard wording of the order that the judge will make if he
            approves the settlement is to be found in the N292 form. Either
            take a few fresh copies of that or alternatively, type up your
            own draft order following the wording as set out in the N292.


    11.3.   For the money to be invested in the Court Funds Office, the
            judge needs to complete the relevant Court Funds Office Forms.
            These can be found in the forms section of the White Book or
            Green    Book   or   online   at   www.hmcourts-service.gov.uk.
            Previously the only form was the CFO 320 - Initial Application in
            Respect of a Fund in Court. However the Court Funds Office
            now also requires that the form CFO 212 - Request for
            Investment Decision be completed and signed by the District
            Judge.


    11.4.   The CFO 212 is similar to the CFO 320 but includes further
            details which, if not supplied, can cause investment of the
            money to be delayed. It is suggested that you keep a supply of
            blank photocopied forms and take both a blank CFO320 and
            CFO212 with you to complete at the hearing. If you forget the
            forms however, the court office can normally supply you with
            one.


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                                                     Small Claims, Small People
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11.5.   For the district judge to be able to approve the settlement and
        fill in the forms, he will need to see the original birth certificate
        or passport.    If you have not seen correspondence from your
        instructing solicitor to the litigation friend reminding them to
        bring this, ask your instructing solicitor to telephone the
        litigation friend before the hearing to remind them to bring it.




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12. The Hearing


    12.1.   Although the rules do not specifically say that the child must
            attend the infant approval hearing, the normal procedure is for
            the child to attend with the litigation friend. Unless there is a
            very good reason why the child cannot attend, district judges
            are reluctant to approve a compromise in the absence of the
            child.


    12.2.   Before the hearing instructions will need to be obtained from the
            litigation friend on :
             Whether they are in agreement with the medical report and
                whether the symptoms have made a full resolution.
             Whether the litigation friend is happy with the proposed
                compromise.      Often it is easiest to go through Counsel’s
                Advice with them.
             Whether there is to be any application for payment out of
                part or the entire fund – see later.
             Whether the child is liable for income tax/has any other
                income/liabilities


    12.3.   The child and the litigation friend will also need to be advised
            about investment in the Court Funds Office and the fact that the
            fund will attract interest. If the amount is over £5,000 and there
            are 5 years or more before the child is 18 the Court Funds Office
            may invest some of or the entire fund in unit trusts.         These
            investments carry greater risk than just keeping the money in
            the special account. The 212 form has a box which has to be
            ticked to say that the litigation friend is aware of this so you
            should discuss this with the litigation friend before the hearing.
            If they are unwilling to have some of the fund invested in higher


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                                                   Small Claims, Small People
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        risk funds there is a space on the form for restrictions on
        investment where the litigation friend’s wishes can be put.      The
        forms CFO 320 and 212 can then be completed with the
        information provided, leaving the rest of the form for completion
        by the District Judge.


12.4.   In about 25% of cases the litigation friend forgets to bring the
        birth certificate which is needed as the judge has to tick a box
        on the forms saying that he has seen it. If there is a long list
        and they live nearby the litigation friend may wish to pop home
        to collect it or get someone to bring it round. Alternatively the
        district judge can approve the amount and forestall signing the
        order and sending off the forms until the litigation friend has
        dropped the birth certificate in to the court.     If the litigation
        friend brings a passport instead of a birth certificate this is
        almost always accepted by judges.


12.5.   It is quite common for the child to reveal that, contrary to your
        instructions and medical prognosis, they still have ongoing
        symptoms. Usually in that case, settlement is inappropriate and
        after taking instructions and advising your client, you will
        probably need to adjourn the settlement to obtain further
        medical evidence. If the defendant is represented they may well
        make an application for their costs of attending the settlement.
        Whether the defendant is successful will depend on the steps
        taken by the claimant’s solicitors to find out whether the child’s
        symptoms have resolved or not.         If the defendant is not
        represented and the case is adjourned the fairest costs order
        may be costs reserved.


12.6.   The hearing will be quite informal and will usually be in the
        district judge’s chambers.       The defendant is not usually


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                                                      Small Claims, Small People
                                                                  17th April 2007

        represented and will sometimes have sent a letter to the court
        confirming that it is happy with the settlement.                As the
        claimant’s representative you should introduce the parties and
        make sure that the judge has all the medical reports and
        counsel’s advice, and if not, supply him with copies. Remind the
        judge of the amount which you are seeking approval of and
        provide him with the birth certificate, forms and draft order.


12.7.   If the judge has had an opportunity to read all the documents
        and has no difficulties approving the settlement, the whole
        hearing can take about 5 minutes.         On the other hand some
        judges like to chat to the child and the litigation friend for a little
        while. The judge will be primarily interested in knowing whether
        the symptoms have all resolved and whether the litigation friend
        is happy with the amount of the settlement.           The judge will
        normally ask the litigation friend and the child these questions
        directly.


12.8.   If the judge approves the amount he will normally complete the
        forms for payment into court while you are there and may seek
        assistance with some of the questions from you.               There is
        helpful advice in the notes to the Green Book and you can also
        ask the Court Funds Office for their leaflets which explain the
        terms mentioned in the CFO212.




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13. Applications for Payment Out


    PD 21.8.1
    Money recovered or paid into court on behalf of or for the benefit of a
    child or patient shall be dealt with in accordance with the directions of
    the court under rule 21.11.

    PD 21.8.2
    the court:
      (1)   may direct the money to be paid into the High Court for
            investment
      (2)   may also direct that certain sums be paid direct to the child or
            patient, his litigation friend or his legal representative for the
            immediate benefit of the child or patient or for expenses
            incurred in his behalf; and
      (3)   may direct the applications in respect of the investment of the
            money be transferred to a local district registry.

    13.1.   If the amount is very small or the child is almost 18, there may
            be no point in investing it in the Court Funds Office. PD21.10.4
            suggests that in this kind of situation the court can order that
            the money be paid direct to the litigation friend to invest in a
            savings account for the child’s use and pay the balance to the
            child when he is 18.


    13.2.   Very often the child will come to the hearing clutching a wish list
            of presents that they would like to buy with the money that has
            been agreed on their behalf. Alternatively the settlement may
            include items of special damage which the litigation friend has
            incurred. CPR 21.11(2) provides that the district judge can direct
            that the money be wholly or partly paid into court and invested
            or otherwise dealt with.


    13.3.   Application can be made orally at the hearing for some or all of
            the money to be paid out of the fund for these purposes. Items
            of special damage such as care, travel expenses and medical


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                                                     Small Claims, Small People
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        expenses are usually non-contentious. However, district judges
        are usually unwilling to allow money out to the child to purchase
        items which would fall within the normal ambit of parental
        responsibility.      Holidays, clothes, X-boxes, mobile phones and
        computers are not normally allowed. Items with an educational
        value are more likely to be allowed but district judges are still
        keen to protect the fund.


13.4.   If the child and the litigation friend want some money from the
        fund now to buy something for the child, it is best to explain the
        purpose of the money and the likelihood that the district judge
        will not entertain an application for money out of the fund for
        such purchases. However, if your client may still instruct you to
        make the application regardless. Sometimes it helps if the child
        hears the refusal from the district judge, and alternatively, the
        district judge may allow some money out.


13.5.   Take instructions about how much the item will cost and it helps
        if the child has brought some proof of this ie the relevant page
        from the Argos catalogue. Usually the district judge will ask the
        child and/or the litigation friend further questions about the
        items.


13.6.   If the district judge decides to allow payment of certain sums
        out of the agreed settlement figure this can be achieved in one
        of two ways.         If the money has been paid into court, your
        instructing solicitors will need to send the form N200 to the
        client for them to fill in with their bank details etc and send to
        the court to effect payment out. If the agreed amount has yet
        to be paid into court by the defendant, the order can state so
        much to be paid into court and so much to be paid direct to the
        litigation friend.


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                                                    Small Claims, Small People
                                                                17th April 2007



13.7.   The Rules have recently been amended to deal with the
        situation where the litigation friend has incurred expenses in
        bringing the claim which are unrecoverable as costs.           These
        generally arise in conditional fee cases when the litigation friend
        has taken out a loan to fund the after the event insurance
        premium following an agreement with a claims handler such as
        the now defunct Claims Direct. The litigation friend is usually
        left liable for the balance between the amount of insurance
        premium paid (normally around £1,000) and the amount
        recoverable on a costs assessment (normally around £350) and
        the interest that has accrued on the loan (normally at very high
        rates).


13.8.   CPR 21.11A and PD21.8A now set out strict rules that need to
        be followed in such a case. The litigation friend has to file a
        witness statement setting out the nature and amount of the
        expense and the reason the expense was incurred. The court
        will then assess whether the expense has been reasonably
        incurred and is reasonable in amount bearing in mind the facts
        and circumstances as they reasonably appeared to the litigation
        friend when the expense was incurred. The court also has to
        bear in mind the factors set out in CPR 44.5(3).


13.9.   If the court does allow some of the child’s money to be paid to
        the litigation friend to cover such expenses CPR 21.11A(6) states
        that if the damages are less than £5,000 the litigation friend can
        only receive up to 25% of the damages unless the court orders
        otherwise. There is an absolute bar to the court ordering more
        than 50% of the damages.




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13.10. If you are instructed to make an application but there is no
       witness statement from the litigation friend, you should point
       this out to your instructing solicitor and ask them to rectify the
       situation. However, if no witness statement is prepared in time,
       the judge may be prepared to hear oral evidence from the
       litigation friend.




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14. Costs


    14.1.   The general rule is contained in CPR 48.5(2). This states that
            the court must order a detailed assessment of the costs payable
            by the child, or litigation friend, to his solicitor and at the same
            time the court will assess any costs payable to that party in the
            proceedings. There is an important exception to this if the case
            falls within the provisions of Section II of CPR 45 – see below.


    14.2.   The time estimate allowed for most infant settlements is not
            usually sufficient to include summary assessment.            Detailed
            assessment also obviates the need for the defendant to attend
            the infant settlement.


    14.3.   However CPR 48.5(3) states that there need not be a detailed
            assessment in the circumstances set out in s.51 of PD48.
            These situations are:
                if there is no need to do so to protect the child
                where another party, the defendant, has agreed to pay a
                 specified sum in respect of the costs of the child and the
                 solicitor acting for the child has waived the right to claim
                 further costs;
                where the court has decided the costs payable to the child
                 by way of summary assessment and the solicitor acting for
                 the child has waived the right to claim further costs;
                where an insurer or other person is liable to discharge the
                 costs which the child would otherwise be liable to pay to
                 his solicitor.


    14.4.   Therefore, if costs are already agreed prior to the hearing, the
            agreed amount of costs should be recorded in the order followed


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                                                             Small Claims, Small People
                                                                         17th April 2007

                 by the words that the claimant’s solicitor waiving their right to
                 claim further costs.


        14.5.    If costs are still in issue at the infant settlement hearing, it is
                 possible that the district judge could summarily assess the costs,
                 although this is unlikely. The standard wording in the N292 is
                 the defendant to pay the claimant’s costs to be assessed with
                 permission to request assessment to be dispensed with and the
                 Claimant’s solicitor waiving any claim to further costs. This
                 therefore sends the matter off for detailed assessment but
                 leaves the door open for costs to be agreed before detailed
                 assessment takes place.


        14.6.    The provisions in Section II of Part 45 concerning fixed
                 recoverable costs in case arising out of a road traffic accident
                 occurring after 6 October 2003 also apply to infant settlements.
                 CPR 21.10(3) states that if this Section applies to the case, costs
                 will be assessed at the end of the infant settlement hearing in
                 accordance with CPR 45.8.       Usually your instructing solicitors
                 will be aware of this and will have prepared some kind of
                 schedule of costs which it will have sent to the court. Therefore
                 be prepared to deal with the simple calculations set out in CPR
                 45.9 – 45.10 and have costs dealt with there and then.


        14.7.    There has been some argument whether Section II of Part 45
                 applies when the proposed compromise of the child’s damages
                 is less than £1,000. This is because Section II on applies ―if a
                 claim had been issued for the amount of the agreed damages
                 the small claims track would not have been the normal track for
                 that claim‖11.


11
     CPR 45.7(2)(d)


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                                                            Small Claims, Small People
                                                                        17th April 2007

        14.8.    It does seem anomalous that there would be no restriction on
                 costs for a £500 claim whereas there are restrictions on costs for
                 a £1,100 claim. There is also an argument that a disputed case
                 involving a child would normally not be allocated to the small
                 claims track. The situation currently, however, remains unclear.


        14.9.    Although the defendant will normally have made a Part 36 offer
                 or payment in before the infant settlement takes place, there
                 cannot be valid acceptance until the court has approved the
                 settlement12.      Therefore the issue of whether the claimant
                 should be awarded their costs beyond the 21 day period for
                 acceptance of a Part 36 offer does not usually arise.




12
     CPR 21.10(1) and CPR 36.9(2)


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                                                          Small Claims, Small People
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15.   Conclusion


      15.1.   Preparation is the key to a successful small claims track trial or
              infant settlement hearing.     Although the case may change
              completely once you meet the witnesses or hear the evidence in
              court, if you have prepared fully, you will have considered all the
              possible outcomes and avenues and will be ready to adapt.


      15.2.   Although these cases are a far cry from traumatic brain injury or
              industrial disease cases, the experience gathered from your
              practice in small claims and small people will provide an
              essential foundation for the future.




      Jasmine Murphy
      Hardwicke Building
      17th April 2007




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