The High Court has applied a “high test” when considering whether a claimant could recover more than fixed costs in a case that had been removed from the protocol for low-value personal injury claims in road traffic accidents.
In Ferri v Gill  EWHC 952 (QB), Mr Ferri’s claim was removed from the protocol after he instructed new solicitors who believed the value of his claim was higher than originally pleaded. They did not apply to reallocate the claim to the multitrack. Some time later, Mr Gill made an oral offer which Mr Ferri accepted. Under the protocol, this meant that Mr Ferri was automatically entitled to fixed costs, unless he could show that “exceptional circumstances” applied.
The costs judge held that there was a “low bar” for establishing “exceptional circumstances” and that the case merely had to be “out of the general run” when compared to cases that remained in the protocol. She found that Mr Ferri’s claim was out of the general run of such cases because:
- the value was considerably above the upper limit of the protocol;
- due to delays in obtaining a prognosis and extensive treatment, there had been an unusually protracted period of pre-action discussions, including two interim payments;
- Mr Ferri was a very keen amateur cyclist and a part-time builder.
Stewart J allowed Mr Gill’s appeal, holding that the costs judge had erred in applying a “low bar”. In fact, following Hislop v Perde  EWCA Civ 1726 (which was not available to the costs judge) the test for exceptional circumstances was a high one. Overuse would risk undermining the fixed costs regime, which was in place to provide certainty. It was therefore important to take a strict approach.
“Exceptional” was an ordinary English word that would not benefit from further judicial interpretation; it had to take its meaning from the context in which it appeared. In the context of CPR45.29, the correct comparison was with cases that had exited the protocol. Mr Ferri’s claim was not exceptional against that background.
This judgment will be welcomed by defendants. For claimants, it illustrates the importance of applying to reallocate a claim to the multitrack if it exits the personal injury protocol in order to avoid being restricted to fixed costs.
For the future, it would be useful for both claimants and defendants to have judicial guidance on what will truly be considered “exceptional circumstances” in cases that are not reallocated.
The authors would like to acknowledge the assistance of Adrienne Fisher, paralegal at CMS Sheffield, in preparing this article.