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Stage 1 Costs and the ‘£400 Club’

By May 17, 2017January 29th, 2021Costs, For Business

The Court of Appeal has ruled that solicitors should be able to claim protocol costs for claims which did not go beyond the first stage.

In a judgment that has been eagerly awaited by personal injury lawyers, Lord Justice Briggs said law firms were entitled to £400 costs for claims which dropped out before Stage 2.

In a rare piece of good news for Claimant personal injury lawyers, the Court of Appeal in J C and A Solicitors Ltd v Andeen Iqbal & Another
 [2017] EWCA Civ 355 ruled there was no pre-action protocol or the Civil Procedure Rules for repayment of Stage 1 fixed costs, where the claim had been discontinued.Retention of pre-July 2013 Stage 1 costs by Claimant lawyers in cases that do not progress to Stage 2 has for some time been a bone of contention for Defendant firms and insurers. The Court of Appeal based their decision on their being no provision in either the CPR or the pre-action protocol that Stage 1 costs had to be repaid. It is also likely that the Court’s decision was also motivated by wider public policy considerations.If the Court of Appeal had ruled differently, the proverbial ‘floodgates’ would have opened and there would be a barrage of claims by Defendant insurers seeking to recover £400 Stage 1 costs in discontinued claims. This would also come at a time when the court system is under unparalleled pressure.

Michael Fletcher

Author Michael Fletcher

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