The issue before Mr Justice Akenhead in the case of Amber Construction Services Limited v London Interspace HG Limited [2007] EWHC 3042 (TCC) related to whether only fixed costs should be payable if a defendant admitted or paid the sum claimed within a few days of the issue of a claim or before the Acknowledgement of Service was filed. Interspace argued that Amber's costs should be limited to fixed costs in the sum of £100 in accordance with CPR Part 45 as liability in full was admitted. Amber argued that the rules regarding fixed costs did not apply to this case and that the Court had the jurisdiction to order payment of fuller costs.
Here the defendant, London Interspace HG Ltd had engaged Amber Construction Services Ltd in September 2003 to demolish existing structures and build six residential units in London. Disputes arose between the parties, and in August 2007, Amber served a Notice of Adjudication, claiming some £241,172 plus VAT and interest. Following a challenge to his jurisdiction by Interspace on the grounds that there was no contract evidenced in writing, the adjudicator awarded Amber a net sum of £63,912 plus VAT and interest. When Interspace failed to make the payment, Amber's solicitors notified Interspace that if the funds were not received, legal proceedings for enforcement by way of Summary Judgment would be commenced in the High Court and that the associated legal costs would be claimed. In return, Interspace's solicitors indicated that they would defend the claim and as well as bring a counterclaim.
Amber's solicitors subsequently issued proceedings on 1 November 2007. On 9 November 2007, Interspace filed their Acknowledgment of Service which admitted the full amount claimed.
CPR 45 notes that one of the occasions when the fixed cost rule applies is where the only claim is for a specified sum of money and where the defendant pays the money claimed within 14 days after service of particulars of claim on him, (including the fixed commencement costs stated in the claim form). However, it also uses the phrase "unless the court orders otherwise" on more than one occasion.
This point was noted by Mr Justice Akenhead who stressed that the Court clearly retained its discretion to order such costs as are appropriate. In other words the fixed cost regime would only apply if the Court does not order otherwise. On the facts of this case, he held that it was appropriate for the Court to exercise its discretion. His reasoning included that:
- This was a claim to enforce an adjudicator's decision. The Courts have recognised the importance of a prompt procedure to secure enforcement of such decisions;
- Amber's solicitors gave a very clear warning that proceedings would be commenced;
- Interspace's solicitors had made it clear that Interspace did not recognise the sum determined by the adjudicator, who they claimed did not have jurisdiction; and
- Amber substantially followed the TCC procedure for enforcement of adjudication proceedings set out at paragraph 9.2 of the TCC Guide.
Accordingly, it should have come as no surprise that Amber's costs would inevitably exceed the amount set out in CPR 45, by way of fixed costs. The Judge therefore ruled that:
"It would not be fair to limit a successful claimant which complied with the steps called for in the Rules and the Guide. Amber was justified in issuing proceedings and a Part 24 application following a threatened defence and an unqualified admission on the part of Interspace after issue."
The Judge then considered the claim for costs and Amber's costs were summarily assessed at £6,162 - rather more than the £100 Interspace said they should have to pay.
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