A Court of Appeal ruling (Phillips v Willis) on road traffic accident cases has criticised the all-too- regular occurrence of transferring cases out of stage 3 portal procedure into the small-claims track. The case has significant implications for all road traffic accident claimants, and could it is believed, result in up to 800,000 claimants a year incurring lower costs.
In the case, Lord Justice Jackson ruled that in April 2014 the district judge was wrong to transfer the case out of stage 3 portal procedure into the small-claims track. LJ Jackson ruled that the judge had no such power to make the order. Moreover, he stated that the ruling that further evidence was necessary to resolve the outstanding dispute between the parties was ‘irrational’. In judgement the Court of Appeal also said that it hoped the declaratory judgement would prevent 800,000 claimants incurring unnecessary and ‘disproportionate costs.’
The Phillips v Willis case involved an accident in June 2013, for which claims for treatment and general damages were agreed. However, the claimant issued a claim form under part 8 of the Civil Procedure Rules in Gateshead County Court after both parties failed to reach a settlement over car hire charges.
On 9 April 2014, the district judge ‘incorrectly’ informed the parties that the action would have to proceed under part 7 of the Civil Procedure Rules because ‘the only issue between them was the proper amount of car hire charges’. The claimant immediately appealed the decision, but his appeal was dismissed by circuit Judge, His Honour Judge Freeman, 3 months later.
In judgement LJ Jackson said the grounds on which the claimant appealed against the circuit judge’s order had undergone drastic amendments over the last two years, stating:
‘These grounds of appeal now present a bewildering kaleidoscope of red, green and black. Despite all that colourful pleading, there is really only one issue in this case. That is the issue identified by the circuit judge. The issue is whether the district judge had power under paragraph 7.2 of practice direction 8B to order that the claim should continue under part 7.’
The judgment states that the sum claimed in the action was only £3,486; the amount turning on the damages issue was just £462. Jackson said the costs that the district judge caused the parties to incur ‘were totally disproportionate to the sum at stake’:
‘First, the parties would have to pay a further court fee of £335 as a result of the district judge’s order,’ Jackson continued. ‘Secondly, the parties would incur the costs of complying with the district judge’s elaborate directions.’
Jackson said the district judge ‘did not have the power to make the order which he made in April 2014’. He allowed the appeal and ‘set aside’ the district judge’s order. Lord Justice Floyd and Lady Justice Macur agreed.
The claimant’s representatives, Winn Solicitors, said the ‘revised’ ruling would benefit all users of the RTA portal, which opened in 2010:
‘The practice of county courts routinely and unnecessarily transferring cases from the portal to part 7 small-claims track when they were actually capable of being dealt with at a stage 3 hearing is inefficient, disproportionate and unjust,’ and often led to ‘significant delay’ in concluding proceedings. Moreover, the practise also gave defendants a ‘second bite of the cherry’ to raise new issues that had not been dealt with in portal proceedings at a late stage in subsequent proceedings.