Can the defendants solicitor claim their sides costs if I discontinue my MCOL claim?

[Redman321]

I issued proceedings earlier this year using MCOL. The latest correspondence that I have received from the court is headed ‘Notice of Proposed Allocation to the Small Claims Track’.

The defendant has filed a defence to my claim and filed an acknowledgment of service but no written evidence has yet been filed. A mediation hearing has taken place recently without any resolution being achieved, but I believe that I may now need to discontinue my claim against the defendant.

Looking at the CPR Rules and Directions, Part 38 for Discontinuance, Liability for costs part 38.6 states:

(1) Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant.

But it also states:

(3) This rule does not apply to claims allocated to the small claims track.

Am I correctly interpreting the above to mean that as my claim appears to have been allocated to the Small Claims Track, if I do discontinue my claim, the defendants solicitor cannot claim any of their sides costs?

Any advice received would be greatly appreciated.

[atticus]

Proposed allocation is not allocation. Try to negotiate a 'drop hands' settlement with no order for costs.

[Redman321]

Thank you for your reply atticus.

I assume that the court would provide some sort of notification to me, if the claim had been allocated to the Small Claims Track? but to date, I have not received any such notification from them. The only update to my original post that I can provide is that following the recent mediation hearing, I logged into my MCOL online this morning and it is now showing that the claim has been transferred to my local court.

I will give the MCOL Helpdesk a quick call tomorrow morning and ask them to confirm for definite whether the claim has or hasn’'t been allocated to the Small Claims Track yet and if it hasn’'t, I will ask them if/when it is likely to be.

Since I issued proceedings earlier this year using MCOL, this entire matter has ‘'developed'’ and become more involved, particularly after receiving the Defence from the defendants solicitor. Whilst I appreciate your suggestion about trying to negotiate a 'drop hands' settlement with no order for costs, there are specific reasons why I now believe that I may need to discontinue my current claim, which is the main reason why I asked about whether the defendants solicitor could claim their sides costs if I did if I did discontinue my claim.

[des8]

why not just wait until the claim is allocated to track before discontinuing?
Or is there a chance it may be allocated "fast track"?

[Redman321]

I contacted the MCOL Helpdesk earlier today. They advised me that they do not issue any formal notification regarding the allocation of the case to a particular track, but they did confirm during our conversation that the case had been allocated to the Small Claims Track. I asked if they could provide me with some form of written confirmation that the case had been allocated but they said they would not be able to provide this, not even in an email. They said that because the case had proceeded to mediation, that meant that it had been allocated to the Small Claims Track.

Reverting back to my original post and given that I have now received confirmation from the MCOL Helpdesk that the case has been allocated to the Small Claims Track, if I were to now discontinue my claim, could the defendants solicitor claim any or all of their sides costs, or am I interpreting the CPR Rules and Directions incorrectly?

[Redman321]

I would very much appreciate a definitive answer on this to enable me to make an informed decision about potentially discontinuing my claim.

To summarise:

My claim has been allocated to the Small Claims Track.

Looking at the CPR Rules and Directions, Part 38 for Discontinuance, Liability for costs part 38.6 states:
(1) Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant.
But it also states:
(3) This rule does not apply to claims allocated to the small claims track.

Am I correctly interpreting the above to mean that as my claim has definitely been allocated to the Small Claims Track, if I do discontinue my claim, the defendants solicitor cannot claim any of their sides costs?

[Frank1]

You should be okay to discontinue now and not face paying defendants legal costs.
if you proceed further, and the defendant incurrs more costs, the judge may award his costs against you if the court considers you have acted unreasonably.
Is there the possibility that the court could believe your claim is totally without merit?
Do you intend to start another claim against the same defendant?

[Frank1]

There is an article titled "Unreasonable behaviour: small track and fixed recoverable costs guidance " at
www.kerryunderwood.wordpress.com
which you may find interesting and useful.
The article covers recent court cases about this topic.

[Redman321]

Many thanks for taking the time to respond. It’s greatly appreciated.

I do not believe that the court would consider that my claim is totally without merit. Following me issuing my claim, it has just ‘'developed'’ and become slightly more complex, mainly following the defendant appointing a solicitor to act for them and following my subsequent receipt of their defence.

Without going into too much detail about the exact subject matter of my claim on a public forum, since issuing my claim, as part of their defence, the defendants solicitor has alleged that another party should be the subject of my claim, not them. I have since contacted the other party concerned who have also appointed their own solicitor and I am awaiting receipt of their definitive response but regardless of their stance, I believe that I may well now need to bring a claim against both parties, as opposed to just the original party (the current defendant).

If the other party concerned were to settle my claim in full to avoid legal potential action against them, then I would have no hesitation in immediately discontinuing my claim against the original party (the current defendant), hence my reason for asking if I would need to pay their sides/their solicitors costs, if I did discontinue.

If I were to discontinue my current claim against the original party (the current defendant) and they did try to claim costs, I would argue that the subject matter of my new claim is largely the same as the subject matter of my original claim against them and as such, any time that their solicitor had spent on the original claim is not wasted and should not therefore be claimed.

If the 2^nd party does not settle my claim, then I believe that I may need to discontinue my current claim against the original party (the current defendant) and issue a new claim against both parties and then let a Judge decide who out of either of them is responsible for which aspects of my claim.

[Frank1]

Have a read of cpr 19.
A lot to take in
Rather than discontinue your claim you could consider adding a second defendant to your claim.
If you made another claim against this second defendant the judge may decide on both claims at the same hearing.
You should contact the first defendant to agree the best way forward.

[Redman321]

Thanks again.

I would of likely taken that course of action however, following my receipt of the original parties (the current defendant’s) defence (and if the other party concerned do not settle my claim in full), the only course of action I have is for me to issue a new claim against both parties and discontinue my current claim against the original party (the current defendant).

[Frank1]

You received the defence early last year. Why has it taken so long for you to decide that you need to make a new claim?

[Redman321]

To clarify. I did not receive the defendants defence “early last year”. Their defence was only received more recently and immediately after receiving it, I then contacted the other party, who I have been discussing the matter with since, then providing information to and whose definitive response I am currently awaiting receipt of.

[Redman321]

Quick update:

I have now been informed that my claim has recently been transferred to my local county court ‘for allocation’! The Notice that I received says ‘On receipt, the file will be referred to a procedural judge who will allocate the claim to track and give case management directions’. This appears to directly contradict the advice that I received previously from the MCOL helpdesk who informed me that the case had already been allocated to the Small Claims Track, so I now question whether the information that I received from the MCOL helpdesk was actually correct. I may contact my local county court to ask them to clarify this point but the Notice that I received does seem to be pretty clear that the case has not yet been allocated to track.

Also, the other party, [whom the original party (the current defendant) alleged in their defence, should be the subject of my claim], made a payment offer to settle last week, to avoid me also issuing proceedings against them however, I rejected their offer as it was significantly less than my current claim value. I will wait to see if the other party make an improved offer or preferably, just pay me the full amount that I am claiming against the current defendant but if they do not then I will have little alternative other than to discontinue my current claim against the original party (the current defendant) and issue new proceedings against both of the parties together.

Reverting back to my original question and given that I am now not certain that my claim has been allocated to the Small Claims Track, would I be best waiting for my local county court to contact me back once they have allocated the claim to track before I do anything else?

Alternatively, the only other way that I can see to get a definitive answer on whether the original party (the current defendant) will claim their sides costs if I did discontinue my claim against them, would be to contact their solicitors, advise them of my intentions to discontinue my current claim against them and inform them that based on what they alleged in their defence, I intended to issue new proceedings against both of the parties together and at that stage, also ask them if they agree to me discontinuing and ask them to confirm that they will not claim their sides costs for the current claim? As advised earlier on, I would argue that the subject matter of my new claim is largely the same as the subject matter of my original claim against them and as such, any time that their solicitor had spent on the original claim is not wasted and should not therefore be claimed.

I don’t know if contacting the original parties solicitor directly now would be the best course of action? and if I even need the original parties agreement to discontinue or if I just need to request the discontinuance through my local county court instead (or from both)?

[atticus]

Either wait or follow my suggestion in post #2.