Counting the cost

Costs in excess of the scale of costs can be awarded in cases of special circumstances in the District Court. Maria Lakes increases the odds of making applications in personal-injuries cases under this provision.

Since the introduction of the Judicial Council’s Personal Injuries Guidelines, there has been much speculation regarding the volume of personal-injury claims that will be prosecuted in the District Court.

It is clear that many cases that would have been prosecuted within the Circuit Court will now fall comfortably within the District Court jurisdiction. Further, some Circuit Court cases will ultimately attract District Court-level damages.

There is significant concern that victims of minor injuries will find it difficult, if not impossible, to secure legal representation to take such claims, as they will not be economically viable.

This concern arises from the fact that the District Court Schedule of Costs has not been revised, as required by statute, since its introduction in 2014. Therefore, the scale costs are out of line with the actual costs incurred in prosecuting such cases.

In addition, the reduction of damages provided by the guidelines, and the Personal Injuries Assessment Board process continuing to be a non-recoverable cost for victims, does not assist in accessing legal services on a contingency basis.

In reality, the non-recoverable costs associated with prosecuting a minor personal-injury claim could render the compensation awarded meaningless.

Personal-injury solicitors have a real concern that the combination of the failure to revise the District Court’s scale of costs and the introduction of the guidelines will result in the denial of access to legal services, and thus the denial of access to justice. There is no access to justice without access to legal representation.

In assessing the viability of minor personal-injury claims, it is essential to have a comprehensive understanding of the costs regime within the District Court Rules. In this regard, there appears to be a misunderstanding among practitioners who believe that the rules only provide for scale of costs. 

This is not, in fact, the case. There is significant judicial discretion as regards District Court costs, which will support victims of minor personal injuries to access legal representation.

The rules

The rules set out the scale of costs that apply to personal-injury claims. Order 53, rule 2 of the District Court Rules (as amended) provides:

1. Save as otherwise provided, the costs specified in each scale in the Schedule of Costs are the only lawful costs.
2. The court may, where appropriate in the special circumstances of a case, to be specified by the court, award an amount for costs and/or counsel’s fees in excess of the amount provided in the Schedule of Costs.
3. The costs in the Schedule of Costs are in every instance exclusive of and in addition to any sum allowed as recovery of value-added tax and all actual and necessary outlay as is allowed.
4. The Schedule of Costs must be revised no less frequently than once every three years.
5. In any case where the court is of the opinion that there is no appropriate scale of costs provided, it may measure the costs.
6. In this rule: ‘actual and necessary outlay’ must include a sum for miscellaneous outlays set out under the heading ‘Schedule of Outlays’ in the Schedule of Costs to include postage, photocopying, registered post, fax and sundries and the Schedule of Costs must also be read accordingly.

Despite the statutory mandate that the scale of costs be revised no less than once every three years, these costs have remained unchanged since their introduction in 2014. Representations have been made to the District Court Rules Committee by the Law Society and the Bar Council for these costs to be revised. Despite these submissions, no revision of the scale of costs has taken place.

The costs associated with running a solicitor’s practice have increased significantly since 2014. Further, the cases that will now fall within the District Court jurisdiction as a result of the introduction of the guidelines are cases never intended to be subject to this scale of costs.

Personal-injuries litigation has become more complex in the past eight years, and it is simply incomprehensible that the guidelines were introduced without this issue being addressed.

However, the rules do not require all cases to attract scale of costs, and the solution to ensuring access to justice lies within order 53 – rules 2(2) and 2(5).

Special circumstances

Under order 53, rule 2(2), costs in excess of the scale of costs can be awarded in cases of special circumstances. A number of applications are known to have been made successfully within the past six months under this provision. These applications were made in cases involving Circuit Court cases ultimately attracting District Court-level damages and District Court claims.

Order 53, rule 3 outlines the information and documentation that is required in such applications:

1. Where a party intends to apply for costs otherwise than in accordance with the Schedule of Costs, that party must have available in court any information or document which establishes the special circumstances in the case which to support such an application.
2. Where a party applies for an item of cost not provided for in the Schedule of Costs to be allowed, that party must have available in court any information or document which establishes that the item of cost was necessary or reasonable to be incurred, and documents vouching the cost (if already incurred or paid) or providing an estimate of such cost.
3. Where a party applies for the costs of a civil proceeding, that party must have available in court information or documents sufficient to confirm the particular pre-hearing steps taken or applications made in the proceeding (including particulars, discovery, applications for judgment on affidavit or judgment in default and any case management hearing) so as to enable the proper amount of costs to be determined.

This provision allows practitioners to apply to the court for costs in excess of the scale of costs.

The judge hearing such application will have had the benefit of hearing the substantive action, and will be familiar with the complexities involved and issues in dispute.

In the case of a Circuit Court hearing that ultimately attracts a District Court-level award, the court can use this provision to determine if it was, in fact, appropriate for the case to be brought in the Circuit Court, despite the level of compensation achieved, and can exercise discretion as regards the costs awarded.

Once the judge makes an order of special circumstances, it is open to the judge to measure the costs. In this regard, solicitors should anticipate such applications and ensure that their file is prepared for the hearing and the costs application, should it arise.

This preparatory work is akin to preparing a file for taxation. Should the judge wish to measure the costs immediately, the solicitor would need to outline the work completed to the court in full. Further, counsel’s costs can also be measured, and drafting costs can be sought and measured, if awarded.

Applications under order 53, rule 2(2), have also been made successfully in rulings of infant settlements, and costs have been measured either by the judge or by way of referral to the county registrar in Circuit Court matters.

The county registrar has the authority to measure costs when directed by a Circuit Court judge under order 18, rule 6, of the Circuit Court Rules: “The county registrar shall have power, when directed by the judge or empowered by these rules, to tax all bills of costs, including costs as between solicitor and client, and shall certify the amount properly due thereon. In every case he shall measure the costs by fixing a reasonable sum in respect of the entire bill or any particular item therein.”

No appropriate scale

Under order 53, rule 2(5), there is a general judicial discretion to measure costs where there is no appropriate scale.

In circumstances where the scale of costs has not been revised in breach of statutory requirements, it is arguable that there is no longer any appropriate scale in existence, and therefore all District Court costs should be measured.

In personal-injury claims, the introduction of the guidelines has radically changed the nature of cases attracting District Court costs. Thus, it is fair to say that such cases should be considered as cases of special circumstances or for which there is no appropriate scale.

When introduced in 2014, the scale of costs was not intended to apply to such cases, and the application of same would not only deny access to justice, but would eliminate a legal remedy for victims.

Legal remedy

To continue to facilitate our clients in exercising their legal entitlements as innocent victims of personal injuries, we must ask our judges to facilitate this legal remedy. We must get back to basics, examine the provisions of the District Court Rules, and ensure that applications under order 53, rules 2(2) and 2(5) become the norm.

The introduction of the guidelines was not intended to eliminate a legal remedy for victims by making minor personal-injury claims uneconomic. We, as solicitors, have the tools at our disposal to ensure that our clients’ rights are safeguarded. 

Look it up

LEGISLATION:

• Circuit Court Rules, order 18, rule 6
• District Court Rules, order 53 (see also SI 17/2014)
• District Court Schedule of Costs
• Judicial Council’s Personal Injuries Guidelines (adopted 6 March 2021)

Read and print a PDF of this article here.