NEWS: SEPARATE FIXED RECOVERABLE COSTS FOR MULTIPLE DEFENDANTS
- Jul 17, 2025
- 9 min read
Updated: Feb 2
CASE: MIL COLLECTIONS LTD -v- MR SHOP 4 LTD & ORS [2025] EWCC 38 (04/07/2025)
IN A NON-BINDING JUDGEMENT, DJ FIELD CONSIDERED WHETHER FIXED RECOVERABLE COSTS (FRC) APPLY TO INDIVIDUAL DEFENDANTS?
This article examines the ratio of the judgement specifically in relation to the FRC. As these considerations are in the context of ‘general litigation’ it only lightly touches on the other curious aspect of the judgement being that several defendants were Litigants In Person (LIPs).
EXCLUSIONS:
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Opinions: Solely that of the author unless expressly stated.
LEGAL SYNOPSIS
In FRC litigation, a Defendant whom successfully strikes out the Claimant's claim is entitled to their FRC. Should the matter have been allocated to the Fast Track, then the court shall have regard to to Table 12. For the Intermediate Track, Table 14. Both tables are contained in Civil Procedure Rules (CPR) Practice Direction 45 (PD 45).
In multi-defendant FRC litigation (e.g. Case of: Claimant vs Defendant 1 & Defendant 2) then each Defendant is entitled to separate FRC. However, the court retains the jurisdiction to order that only a portion of those Defendants costs sahll be paid. In the matter considered below, the total costs for 13 Defendants came to £4’904.34.
In cases concerning CPR r.45.13 for Unreasonable Behaviour, the applicant MUST have evidence that this alleged conduct increased costs which should be evidenced in a N260 Statement of Costs. A Precedent U will not assist as under the Fixed Costs Summary Determination process, Precedent U actually states N260 should be used.
CASE: MIL COLLECTIONS LTD -v- MR SHOP 4 LTD & ORS
MATERIAL FACTS:
This was Woefully Unsuccessful Debt claim against 13 Separate Defendants. The total value of the consolidated claims was approximately; £335’000.
The Claimant’s Particulars of Claim were found to be Defective and the Court made an Unless Order for their repair. But;
The Claimant’s Amended Particulars of Claim were found to also be defective. Consequently;
The court having lost patience struck the claim out for non-compliance with an Unless Order. Thereafter;
The now hapless Claimant unsuccessfully applied for Relief from Sanctions. Finally;
The only remaining issue for the court to determine was the sums owed to the victors for their costs?
The Defendants adopted near identical defences and the matter was allocated to Complexity Band 1 noting “since the claims are consolidated and will be listed for excess of 1 day, there may be exceptional grounds upon more than fixed costs under Table 12 PD 45.
ISSUES TO DETERMINE:
THE EXTENT TO WHICH THE FIXED COSTS PROVISIONS APPLY AT ALL IN RELATION TO A CLAIM WITH IS STRUCK OUT?
Should the claim be struck out following service of the Defence but prior to trial, then the Defence has succeeded. That victorious Defendant is entitled to be reimbursed their legal costs accordingly. With reference to the FRC Regime, the amount of FRC is determined by reference to the stage proceedings had reached when the claim was struck-out.
THE APPLICABLE AMOUNT OF FIXED COSTS (IT NOT BEING CLEAR WHETHER THE APPROPRIATE STAGE IN TABLE 12 PRACTICE DIRECTION 45 IS DETERMINED BY REFERENCE TO THE ORDER FOR A TRIAL DATE OR BY REFERENCE TO THE TRIAL BEING ACTUALLY LISTED)?
As stated above, the amount of court awarded legal costs a successful Defendant is entitled to is subject to the stage the case reached in proceedings that the case was concluded i.e. in this matter, struck-out. On this issue the notice listing the case for trial had been sent out 19/05/2025. However, the case had been struck-out 13/05/2025.
The court determined that this could not be considered the listing of the claim for trial to reach stage B(3) of Table 12 (Fast Track FRC) as this applies when "on or after the date that the court listed the claim for trial but before trial. As per the judgement of DJ Field:
[48] The 12th and 13th Defendants draw a distinction between the "listing" of a trial and the "fixing" of a trial. The refer by analogy to paragraph 6.58 of the Chancery Guide:"
"Trials are normally listed with a commencement date floating within a 3-5 day period, referred to as a trail window, but the court may (exceptionally) consider listing the trial for a fixed start where certain criteria are met. These will include such matters as the length of the trial, the number of parties and witnesses, and the need for parties or witnesses to travel from abroad and attend trial."
[49] The difficulty with submission is that in the vast majority of Fast Track case, the first case management order will provide for both allocation and provision for the trial to be listed wither within a window or on the first available date after a particular date. Indeed the standard orders produced by the damages claim portal and the online money claims portal are drafted in this way.
[50] Were this' submission to be correct, it would mean that in the vast majority of cases the stage between allocation and listing would be non existent. That cannot have been the intention of those drafting PD45. The increase in fixed costs between stage B(2) and B(3) must be intended to reflect that it is roughly between the allocation order and the notice of trial that the parties be undertaking work on disclosure and witness evidence and so on.
[51] I consider therefore that, in the circumstances of this case, the trial was listed on 19 May 2025 and the case concluded by automatic strike out before the date, on 13 May 2025 as such, the applicable stage in Table 12 is B(2)."
WHETHER, WHERE THERE IS MORE THAN ONE DEFENDANT, EACH DEFENDANT IS ENTITLED TO RECOVER FIXED COSTS IN THEIR OWN RESPECT?
While the CPR provides very clear guidance as to the entitlement of separate victorious Claimants to their FRC, the position in re Defendants has been left deliberately obscure.
[56] Since those drafting the new Part 45 chose not to expressly address the fixed costs entitlement of the multiple Defendants (as they have done with the Claimants), the correct approach is that which was undertaken by HHJ Glenn in Melloy: to read the relevant rules in the context of the purpose of the extended fixed recoverable costs regime.
[57] CPR r.45.1(3) provides that the court cannot make an award which is less than or more than the fixed costs in PD45, save where it makes an order in the form contemplated by CPR r.44.2(6)(a) i.e. an order that a party pay a proportion of another party's costs. Beyond that exception and any other exceptions expressly set out in Part 45 the court may only award the fixed costs.
[58] There is nothing within the wording of CPR r.45.44, 45.45 nor Table 12 which can fairly be read to indicate one way or the other as to whether in multi-Defendant cases each Defendant should be entitled to fixed costs
a. If the rule makers intended to deviate substantially from principles which would ordinarily apply in respect of costs, this would be dealt with expressly in the rules;
b. CPR r45.44, r.45.45 and Table 12 should be read in the context of the remainder of Part 45 and PD 12; and
c. So far as is possible, CPR r.45.44, 45.45 and Table 12 should be read in a way which is consistent with the purpose of the Fast Track fixed costs regime, being to provide a means to quantify costs entitlement that is certain and easily calculated and which limits recoverable costs to those which are proportionate.
[60] Taking those principles in turn:
a. Outside of the fixed recoverable costs regime, where a claim is unsuccessful and there are multiple Defendants, the general rule would be that each Defendant should be awarded their costs of the proceedings. There is nothing in the CPR Part 45 or PD45 which would expressly disapply that general approach.
b. Whilst CPR r.45.54 does expressly provide for the circumstances in which multiple Claimants may be restricted to one set of fixed costs, there is no equivalent provision for the Defendants. Had those drafting the rules intended that multiple Defendants should share a single entitlement to fixed costs (or similar) then an equivalent provision would have been included within the rules.
c. Whilst allowing each Defendant to recover the Fixed Cots in Table 12 increases costs and therefore risk costs becoming disproportionate, leaving a discretion or ambiguity as to whether multiple defendants (whom may be separately represented and have opposing interests) will each have an entitlement to fixed costs would be contrary to the purpose of providing certainty and simplicity.
[61] In my judgement, having regard to the above, in a case to which Part VI of Part 45 applies in which there a multiple Defendants, each Defendant is entitled to their fixed costs as set out in Table 12 of PD45, subject to the court's discretion to make an order under CPR 44.2(6)(a) that a party pay only a proportion of another party's costs.
[62] Whilst not expressly stated within Part 45, it must be that in deciding whether to make an order for a party to pay only a proportion of another party's costs, the court should take into account those matters in CPR r.44.2(4), namely:
"all the circumstances including -
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court's attention and which is not an offer to which costs consequences under Part 36 apply."
[63] I do not consider that the fact that an award of two sets of fixed costs might produce a windfall for the Defendant is a relevant circumstance which should carry significant weight. As HHJ Glenn held in Melloy, "whilst that may be so, it is of essence of any fixed costs regime that there will be swings and roundabouts. The outcome cannot inform the construction except in the most exceptional case."
[64] Much more relevant in my judgement are the following circumstances and matters of conduct:
a. The claims began as separate claims by the Claimants and were only consolidated as a result of an order of the court's own motion for reasons of efficient case management as described earlier in this judgement;
b. When issuing each of those claims, the Claimant will have been aware that in the event the claims were unsuccessful, it would be liable for the Defendants' fixed costs in each of those claims; and
c. The court could have ordered that the case should be case managed and tried together, rather than that they be consolidated. In these circumstances fixed costs would undoubtedly have been payable to each successful Defendant. It would be arbitrary if there were substantially difference consequences depending on whether the claims had been consolidated or simply case managed and tried together and
d. The claims have been struck out for breach of an unless order. At its core, the reason that the unless order was made, that it was breached, and that the application for relief was refused was that the Claimant chose to embark upon this litigation at a time when it held insufficient information and documents to undertake any form of assessment of the merits of the claims or to properly plead those claims. Such conduct mitigates against the making of an order under CPR r.44.2(6)(a) to alleviate the consequences of the fixed costs regime.
ANY ENTITLEMENT TO FIXED COSTS IN RESPECT OF UNREPRESENTED PARTIES (LIPS)?
Yes. Pursuant to CPR Part 45, victorious LIPs are entitled to no more than 2/3s of the FRCs. This is clearly a limit rather than an automatic entitlement. Consequently and pursuant to CPR r.46.5 the court was now required to undertake individual assessments for each of the Defendants. In concise summary:
The 12 & 13th Defendants were legally represented. The court held that the FRC less 1/3 would be recoverable namely £2'581 + VAT for the stage reached, reduced to £1720.67 + VAT accordingly.
In contrast, Defendants 1 - 11 had not instructed solicitors and thereby incurred a financial loss in legal costs. Here, DJ Field determined that these Defendant "more likely than not ... had to spend at least 7 hours on this litigation." Consequently, costs in the sum of £133 (7 hours at £19 p/h) was allowed.
AN UPLIFT ON THE FIXED RECOVERABLE COSTS DUE TO THE CLAIMANT'S CONDUCT?
No award for unreasonable behaviour:
The Defendants had not raised the issue of conduct prior to the hearing.
The Claimant had already be penalised through the striking out of their claims.
There was no evidence of bad conduct to show that the Claimant's actions had actually increased the costs.
In his judgement, DJ Field ordered the Claimant to pay the Defendant's costs within 14 days, totalling £4904.34 for 13 Defendants.
COMMENT
For the avoidance of doubt and as legal practitioner should be aware, Personal Injury and RTA type cases (PI) are subject to Qualified One-Way Costs Shifting (QOCS). This means that a triumphant Defendant does not get their costs save for in limited circumstances. However, PI outside the multi track are subject to FRC and this case should be of use in multi-Defendant situations.
In all circumstances, this was an unfortunate end for a claimant whom went after 13 debtors and then had to pay them. Superstition aside, the case does point to the importance of obtaining professional legal advice and/or representation and should you require this, we direct you to the contact form below accordingly.
