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In assessing the financial value of a claim under CPR r.26.8(2), a court could take into account the value of any sums admitted despite the fact that such sums did not fall neatly within CPR PD 26 para.7.4.
The appellant (R) appealed against a decision of a district judge to allocate a claim against the respondent (E) arising from a road traffic accident to the small claims track.
At an allocation hearing the district judge had determined, in line with the court's duty under CPR r.26.8(2), that the financial value of R's claim was not more than £5000, and allocated the claim to the small claims track. E admitted liability in its defence. In reaching his allocation decision, the district judge took into account partial admissions of amounts in dispute that E made in its defence and decreased the financial value of the claim accordingly. R did not make any application for costs at the hearing. The issues were whether (i) the district judge had correctly assessed the financial value of R's claim; (ii) R was entitled to costs down to the date of E's admission of liability under the slip rule in CPR r.3.1(7).
R submitted that E's partial admissions did not result in the elimination of that item of loss when assessing his claim's financial value, and that the court's disregard of amounts under r.26.8(2) was limited by the general principles in CPR 26 PD para.7. R also submitted that only admissions which satisfy the judgment regime of CPR Pt 14 were capable of reducing the amount in dispute, and that the partial admission of an amount in dispute in reality meant that the whole financial value of that item remained disputed.
Held: In determining the amount in dispute for the purpose of a claim pleaded in excess of £5,000 in which the Defendant admitted a part of the damages owed which did not amount to a discreet item the court must disregard the total amount in dispute and look only to the balance remaining. The wording of CPR 26.8(2) was clear and it was not permissible to seek to gloss those express words by reference to the structure of CPR PD 26 paragraph 7.4 or by reference to the criterion in respect of judgment under CPR Part 14 which distinguish judgments for the admission of the whole of the claim or part of a claim accepted in compromise of the whole claim and which does not permit the entry of judgment in respect of admission of a part of a claim.
The context to this appeal was the much vexed question whether when a part of the hire claim is admitted irrevocably by the Defendant the pleaded value of the total claim should be used to determine which track it ought to be allocated to or whether the total sum remaining should be used. Over the last decade this has been argued many times at allocation hearings with the outcome determining whether the Claimant recovers costs often in excess of the value of the claim or is deprived of those costs at least after the date of allocation (the court being empowered to allow them before that date under CPR CPR 44.9PD 15.1(3)).
The Circuit Judge determined that although the practice direction to CPR part 26 at paragraph (7) did list the factors to determine what an amount in dispute was in such a way that a parallel to the position in respect of judgments is created and did not refer to the situation in respect of partial admissions that CPR 14 excluded from judgment the factors set out were not exhaustive and did not exclude other factors being considered.
The day before the Appeal was due to be heard by the Court of Appeal the Appellants consented to it being dismissed, and an order dismissing the appeal by consent was made by the Court of Appeal with costs.
Although the Respondent had succeeded at first instance and on appeal practice around the country had varied. The position is now much clearer and consistent with current emphasis on proportionate litigation.
David Rivers represented the Respondent throughout.