HHJ Pearce applied the Court of Appeal authority in Conlon v Royal & Sun Alliance to retrospectively reallocate a case to the small claims track. The claim consisted of a personal injury claim and a car damage claim. While the judge found that the claimant had not been dishonest in pursuing the injury claim, he accepted the defendant’s argument that it should not have been pursued. Had the claim been limited to the car damage claim, it would have been dealt with in the small claims court and, accordingly, the action was retrospectively re-allocated to the small-claims track with the resultant costs consequences for that track. Written by Richard Allen, senior consultant at Burcher Jennings.
Kavak v FMC Chemicals Ltd  Lexis Citation 81
What are the practical implications of this case?
This case underlines the importance of properly assessing that one has reasonable prospects of establishing injury arising from a road traffic accident, where otherwise a claim would fall to be allocated to the small-claims track in relation to the remaining non-personal injury claim.
What was the background?
In this case, Mr Kavak had been unfortunate enough to suffer three road traffic accidents within the space of just over six months, the last event being the subject of this case report. He alleged that he had suffered personal injury, insofar as the injuries suffered in his previous accidents had been made worse. The action was brought under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (the Protocol). FMC Chemicals denied causation in its entirely and further alleged contributory negligence, resulting in the claim continuing under CPR part 7 and proceeding to trial before HHJ Pearce.
Although the medical evidence was agreed, HHJ Pearce rejected Mr Kavak’s evidence that his injuries were worse following his third road traffic accident. Of particular note, while FMC Chemicals did not allege dishonesty against Mr Kavak, HHJ Pearce made a specific finding that Mr Kavak had not been dishonest in his evidence.
Having failed to prove personal injury, the parties then became embroiled in argument about the appropriate costs due to Mr Kavak. Mr Kavak contended that since his claim had started under the Protocol but came out by virtue of section IIIA of CPR 45, fixed costs under that part were payable. FMC Chemicals submitted that the claim should never have proceeded under the Protocol but that it fell squarely within the small-claims track and as such, was costs-limited to that track.
The only authority provided at trial was from counsel for FMC Chemicals, Mr Marriott, namely Conlon v Royal & Sun Alliance  EWCA Civ 92, providing authority for the court re-allocating a case after judgment. To avoid prejudice since counsel for Mr Kavak, Mr Huffer had not had time to consider Conlon, HHJ Pearce ordered that the parties provide written submissions, following which a written judgment would be given.
In written submission, FMC Chemicals abandoned an earlier argument that the court could disapply the fixed costs regime under section IIIA of CPR 45. However, the argument that the court should re-allocate Mr Kavak’s case to the small claims track was maintained.
While Mr Kavak accepted the court had the power to retrospectively re-allocate to the small-claims track, it was argued that the ‘good reason’ test described in Conlon could not be established, because Mr Kavak was found to have given honest evidence, he had succeeded in his claim for damages, albeit not for personal injury in the face of a blanket defence from FMC Chemicals, Mr Kavak would have been criticised for pursuing an injury claim as a litigant in person, in an action allocated to the small claims track at the outset, the defendant failed to protect its position by making a Part 36 offer, track allocation is meant to manage cases prospectively so parties know how to conduct a case going forward and the fast-track scheme under which this case proceeded, yielded evidence significant in the determination of liability, that would not have been available to the court had it proceeded under the small-claims track.
What did the court decide?
In deciding the issue of costs, HHJ Pearce accepted that Conlon makes clear that the retrospective allocation to a different track should only be exercised where there is good reason and that a party may be undermined in being limited in costs where they have conducted a case with an expectation of costs flowing from its original allocation.
HHJ Pearce found considerable force in the argument by FMC Chemicals that, had Mr Kavak not pursued his claim for personal injury, his case would have proceeded under the small-claims track and the claimant should not benefit from his failure to limit his claim. Accepting this argument, HHJ Pearce made clear that Mr Kavak and those advising him failed to properly assess that he had reasonable prospects of establishing his injury claim and even his own evidence did not go as far as to say he had suffered injury.
In addition, HHJ Pearce concluded that the fact that FMC Chemicals failed to defend the vehicle damage claim would simply have resulted in small-claims track costs, but for the claim presented for personal injury. Also, it would have been inappropriate for them to make a Part 36 offer, which would have created a liability for costs greater than their potential risk under their submissions on costs.
Finally, HHJ Pearce found nothing exceptional in Mr Kavak’s case to prevent it from being conducted in the small-claims track nor that the court would have reached a different conclusion based on the evidence permitted in the small-claims track. Although accepting the importance for parties in prospectively allocating a case to a track, a litigant should not be permitted to benefit from this, as was the case in Mr Kavak’s case.
Consequently, HHJ Pearce retrospectively re-allocated Mr Kavak’s case to the small-claims track from the date of original allocation, with the resulting costs payable under that track, agreed by FMC Chemicals in the sum of £419.00.
- Court: Manchester County Court
- Judge: Judge Pearce
- Date of judgment: 24 April 2018
Richard Allen is senior consultant at Burcher Jennings, and a member of LexisPSL’s Case Analysis Expert Panel. Suitable candidates are welcome to apply to become members of the panel. Please contact firstname.lastname@example.org.