);

Question: Can you contract out of fixed recoverable costs?

Answer: From 6 April 2024, CPR 45.1(3) reads [emphasis added]:

“Where—

    • a claim is one to which Section IV, Section VI, Section VII or Section VIII of this Part applies; and
    • the parties agree or the court orders that a party is entitled to costs,

subject to the application of any rule in those Sections or this Section by which costs are to be allowed, disallowed, increased or reduced, the court may only award costs in an amount that is neither more nor less than the fixed costs allowed by the applicable Section and set out in the relevant table in Practice Direction 45, unless the paying party and the receiving party have each expressly agreed this Part should not apply.”

Some commentators have suggested this simply reverts to the position in Doyle v M&D Foundations & Building Services Ltd [2022] EWCA Civ 927. In that case, which would otherwise have been subject to the previous fixed recoverable costs regime, the parties had settled the case by way of a Consent Order including the provision: “such costs to be the subject of detailed assessment if not agreed”. The Court of Appeal interpreted this as meaning costs to be assessed on the standard basis and not subject to fixed costs. It treated “subject to detailed assessment” as being wholly inconsistent with costs being subject to fixed costs. The parties were treated as having contracted out of fixed recoverable costs.

Does this rule change simply take us back to Doyle?

The key word in the amended rule is surely “expressly”.

“Express” is likely to require something much more than happened in Doyle. It would presumably require the settlement agreement to say something like: “the defendant to pay the claimant’s reasonable costs on the standard basis to be the subject of detailed assessment if not agreed (and not subject to fixed recoverable costs under Practice Direction 45).

It also requires “each” party to expressly agree to this. Does this add a further requirement? If so, what? Does the second party simply saying “we agree” amount to “express” agreement or is something further required?