Muhammad Osama Khan v Aviva Insurance Limited

I am concerned with an appeal relating to the order of DDJ R John dated 1 May 2025. The appellant’s notice is dated 15 July 2025 and is supported by amended grounds of appeal (undated) and a skeleton argument dated 13 July 2025. By order of HHJ Petts dated 11 August 2025, permission to appeal was granted on grounds (e) and (f) of the appeal against the order of DDJ R John, namely:

HHJ Petts has also ordered that “If the appeal on ground (e) fails then the appeal on ground (f) will be by way of re-hearing of the arguments on quantum of the summary assessment of costs, rather than by way of appellate review of the amount awarded by DDJ R John.”

Permission to appeal was refused on the other grounds and there has been no application made to set aside or vary HHJ Petts’ order which was made without a hearing.

These are proceedings issued on 21 August 2024 for damages for personal injury and losses arising from a road traffic accident on 26 June 2021. For ease I will refer to the Appellant as the Defendant and the Respondent as the Claimant. The Defendant had admitted liability for the accident within the MOJ portal system in accordance with the pre action protocol for low value personal injury claimant in road traffic accident. The parties had completed stages 1 and 2 of the protocol but had been unable to reach agreement at the end of stage 2. Proceedings were therefore issued. The claim notification form had been sent by the Claimant on 15 September 2021. The claim had a limit of £10,000.

On 16 December 2024 the Defendant made an application to strike out the Claimant’s claim as it appeared to the Defendant that the claim was statute barred. On clarification by the Claimant’s solicitors, the Defendant accepted that the court had been emailed by the Claimant’s solicitors within the limitation period and the Defendant therefore put the Claimant on notice that it intended to amend its application to include transfer of the proceedings to part 7. On 11 February 2025 DJ Morris gave permission to the Defendant to amend that application to the amended application filed on 3 February 2025 and listed the matter for hearing before DDJ John on 24 April 2025. In that application, the Defendant sought various orders to include transfer of the matter to part 7, vacation of the stage 3 hearing which had been listed on 21 March 2025 and transfer of the matter to the Birmingham Civil Justice Centre, that being the Claimant’s local court, as well as consequential directions arising therefrom. In her statement in support of that application dated 3 February 2025, Chloe Cheung, senior associate for the Defendant sets out her reasons as to why the matter should be transferred to part 7. She raises issues in relation to the Claimant’s psychological expert evidence. She notes inconsistencies in the evidence. She raises the fact that the Defendant is aware of adverse judicial commentary pre-dating the issue of these proceedings relating to one of the Claimant’s expert witnesses, Mr Akal.

The matter came before DDJ John on 24 April 2025 and he reserved judgment to be delivered on 1 May 2025. DDJ John gave permission for substitute Counsel to attend that hearing. Counsel for the Defendant apparently tried to join that subsequent hearing using the remote hearing link provided by the court for the hearing on 24 April 2025 but failed. It transpired that the court had sent to the Claimant, but not to the Defendant, a new link for 1^st May hearing following an email sent to the court by the Claimant but not copied to the Defendant. The hearing accordingly went ahead in the Defendant’s absence. There is a very detailed written judgment from DDJ John which is dated 29 April 2025 and states that it is following a hearing on 28 April 2025. I assume that is a typing error and should relate to the hearing of 24 April 2025. I am also assuming that the DDJ has then sent the draft judgment to the parties in advance of the hearing of 1 May 2025 as he says at the end of the judgment that “In these circumstances, the Court is not satisfied that further evidence must be provided and that the claim is not suitable to continue to a Stage 3 hearing. Accordingly, the Defendant’s application is dismissed. The Court directs that the Stage 3 hearing is re-listed ……This judgment will be handed down formally on 1 May 2025 when the Court will also summarily assess the costs.”

On 1 May 2025 the DDJ made the following order, in the absence of Counsel for the Defendant who had the wrong link to join the hearing:

The Defendant’s Amended Application to transfer these proceedings from Part 8 to Part 7 be dismissed;

The Defendant do pay the Claimant’s costs of and occasioned by the hearings dealing with the application on the 5^th February 2025, the 24^th April 2025 and the 1^st May 2025 summarily assessed in the total sum of £12,861.12…” and relisting the Stage 3 hearing. On 2 July 2025, DJ Morris dismissed the Defendant’s application dated 5 May 2025 to set aside DDJ John’s costs order dated 1 May 2025.

The only issue which I need to address in this judgment is the question as to whether DDJ John had jurisdiction to make the order for costs which he did. If I find that he did, I will summarily assess those costs at the hearing when I deliver this judgment, unless the parties are able to agree them.

I have heard and read arguments from both Counsel and decided to reserve judgment in this matter due to my list being extremely busy.

This is a claim which is governed by Practice Direction 49F and, in terms of costs, it is agreed that CPR 45 (before 1 October 2023) Part III applies.

Counsel for the Defendant submits that the DDJ did not have jurisdiction to make the costs order which he did. He accepts that there is provision to make an order under CPR 44.11 where a party or that party’s legal representative, in connection with a summary or detailed assessment, fails to comply with a rule, practice direction or court order or it appears to the court that the conduct of a party or that party’s legal representative, before or during the proceedings or in the assessment proceedings, was unreasonable or improper, but he submits that the DDJ did not do that and that it was not open to him to make such an order on the facts of this case.

He further submits that the stage 3 procedure is meant for straightforward claims and that the costs rules fall in part III of Part 45. Where the court considers that further evidence must be provided by a party and the claim is not suitable to continue under the Stage 3 procedure, the court has the power to reallocate the claim to the part 7 procedure (PD 49F – paragraph 7.2). The Stage 3 procedure is designed to minimise costs and to deliver “rough justice” with very tightly defined costs provisions, the only costs being allowed being those in CPR 45.17. The recovery of costs by the Claimant in relation to the Defendant’s application as amended does not fall within the Stage 3 procedure and as a result, the Claimant cannot recover its costs in successfully defending the Defendant’s application as amended. There is no provision for the court to have a discretion as to costs. There is no provision to make a costs award following on from an application under PD 49F para 7.2 for the matter to be transferred to Part 7. CPR 45.17 and 45.25(4) would be otiose if the Court retained a discretion to make a costs award.

He relies on the Court of Appeal judgment in London Borough of Islington v Bourous; Davis and Yousaf (2023) Costs LR 717 in support of his submissions.

His other submission is that it cannot be argued that the application was unreasonable per se as it is an application within the scope of the rules. The DDJ did not make a costs order pursuant to CPR 44.11 and a case of this nature would not fall within that definition. He refers me to the commentary at para 46.8.4 of Volume 1 of the White Book 2025.

Leading Counsel for the Claimant has filed a skeleton argument and he has also made detailed submissions.

He makes the submission that the DDJ had before him a skeleton argument filed on behalf of the Claimant dealing with the issue of unreasonable conduct on the part of the Defendant. Unfortunately, that skeleton argument and the initial application to strike out the proceedings made by the Defendant were not in the appeal bundle before me but I have since found them on the Court shared drive.

In terms of Bourous, Counsel for the Claimant accepts that if an application which cannot be made is made in a set of rules, that could be seen as being unreasonable. The problem in this case is that the DDJ held that this was an application which could be made and therefore that criticism falls away.

He submits that the DDJ does not say that the costs should be costs pursuant to CPR 44.11 and that he does not say that the Defendant has been unreasonable. He refers me to the Court of Appeal judgment in English v Emery Reimbold & Strick Ltd (2002) EWCA Vic 605 in support of his submission that even if the word “unreasonable” is not used, the inference is that the DDJ regarded the Defendant’s conduct as unreasonable. He further submits that this Court, on appeal, should only disturb the current order for costs if the DDJ’s acceptance that the Defendant’s conduct was unreasonable was unsupported by the evidence or one which no reasonable judge could reach (See Civil Procure 2025 para 52.21.5). That is not the position here.

Alternatively, if the court were to consider the matter afresh, the Defendant’s conduct was unreasonable. The original strike-out application was unsustainable and abandoned, the amended application was late and unmeritorious as found by the district judge and the Defendant failed to file an acknowledgment of service to the Part 8 proceedings.

He further adds that it was not necessary for there to be unreasonable conduct for the DDJ to have jurisdiction to award the Claimant his costs. The fixed costs regime scheme is to fix costs for what is done under the Protocol. The fixed costs regime only applies to steps which are provided for in the Protocol. Therefore, where applications are made which are not provided for in the Protocol or the fixed costs regime, this compels the conclusion that these costs are simply outside the regime. It does not lead to the conclusion that such costs are irrecoverable inter partes however unmeritorious the application or opposition to it might be. Therefore, costs are at large in the usual way and the DDJ was entitled to make the costs order he did.

Finally, he makes the point that in circumstances where the Defendant pursued its application and/or allowed the court to manage and deal with that application, on the basis that costs were at large, it would have been an abuse of process for the Defendant to contend otherwise only when its application was dismissed. That would mean that the Defendant was using the process of the court “for a purpose or in a way which is significantly different from the ordinary and proper use of court process” (Attorney General v Barker (2000) 1FLR 759 at para 19 per Lord Bingham LCJ.)

The DDJ prepared a very detailed and careful judgment in relation to the substantive part of the Defendant’s application. Within that very detailed, 36 paragraph long judgment, the only thing he says about the costs of the application is that “the judgment will be handed down formally on 1 May 2025 when the Court will also summarily assess costs.” At the CVP hearing on 1 May 2025, Counsel for the Defendant did not attend as he had been provided with an old link to a previous CVP hearing. Counsel for the Claimant attended and I can see from that hearing that Counsel for the Claimant tells the DDJ that “the only…thing is the summary assessment of the costs of three hearings…”. He then considers the schedules and summarily assesses the costs. Of course, had Counsel for the Defendant been provided with the correct link and been able to join the CVP hearing, he would, I am quite sure, have raised the issue of the type of costs order which should be made and the DDJ is likely, given the care with which he prepared his reserved judgment, to have given an equally careful and reasoned judgment in respect of costs as well.

In his skeleton argument, Junior Counsel for the Claimant at that stage pushes the fact that the DDJ had jurisdiction to award the Claimant costs pursuant to CPR 44.11 based on the unreasonable conduct of the Defendant. In his skeleton argument dated 4 September 2025, Leading Counsel for the Claimant (who appears before me) relies on English v Emery Reinbold & Strick Ltd (Practice Note) 2002 EWCA Civ 605 in support of his submission that in the absence of the DDJ indicating to the contrary, that it can be inferred that he accepted that the Defendant’s conduct was unreasonable. I have been referred to paragraph 35 of the DDJ’s judgment in support of this. Whilst the DDJ was clearly not impressed with the Defendant’s conduct, nowhere does he say that it was unreasonable and, to be fair to him, he did not have the opportunity to address the issue of unreasonable costs which he would no doubt have done had Counsel for the Defendant been able to join the hearing on 1 May 2025. Whilst the DDJ clearly had the power to make such an order (and that had been sought on the papers), he does not say that he is making such an order in his judgment and I am satisfied that, given the very careful judgment he has written, he would have given proper reasons for making such an order and he would have specified that he was making a costs order against the Defendant pursuant to CPR 44.11 had he intended to do so. In my judgment, he did not. What he was expecting to do was to deal with costs at the hearing on 1 May 2025 and, given that Counsel for the Defendant did not, unfortunately, appear, he did not and simply proceeded to summarily assess the costs. He simply made that order on the basis that costs generally follow the event. He did not think about the complexities which can be linked to these kind of fixed costs cases. I am not willing to infer from his judgment that he intended to make an unreasonable costs order although I accept that he was not impressed with the Defendant’s conduct.

The question I therefore have to ask myself is whether the costs order which the DDJ made was wrong on the basis that there was no jurisdiction to make such a costs order. An appeal will be allowed “where the decision of the lower court was –

Counsel for the Defendant submits that as this case falls within CPR 45 Part III, whereas CPR 45 Part II and Part IIIA allow for costs exceeding fixed recoverable costs (CPR 45x13 and CPR 45x29J) there is no like provision within Part 45 Part III, the costs recoverable being restricted to those recoverable under CPR 45.17, CPR 45.22, CPR 45.24 and CPR 45.26, none of which are relevant here and that therefore the DDJ was wrong to make an order for costs to be summarily assessed as he did not have jurisdiction to do so. What he submits is that if those drafting the rules had meant for any other costs to be recoverable, they would have included such a rule within Part III. He also makes the point that if the Court had a general power to make an order for costs CPR 45.17 and 45.25(4) for instance would be otiose. I have not been provided with any background information as to why there is the difference between the rules in this case, CPR 45 Part III and CPR Part II and Part IIIA. Counsel for the Defendant confirmed to me in his submissions that if I accept his submission, this would mean that the Claimant would be unable to recover its costs of successfully defending the Defendant’s application. Those costs encompassed the costs of attending three hearings and were summarily assessed by the DDJ (although I appreciate that I will need to reassess these if I dismiss the appeal) in the sum of £12,861.12. Bourous concerns two appeals where Claimant had made claims under the Protocol but where the issue of costs is not specifically addressed. The judgment contains helpful background information about the Protocol and how it is intended to work but does not address the specific costs issue with which I am concerned. I do find paragraph 152 of the main judgment of Laing LJ interesting wherein she states that “Insurers must be taken to know about both the purpose and the detailed provisions of the RTA Protocol, and how it differs from other methods of deciding civil claims. The sheer number of these claims means that they are a form of bulk business. Insurers can take advantage of the economies of scale and cost created by the RTA Protocol for these claims. Insurers are not locked into the RTA Protocol. First, they can take advantage of the “industry agreements” dealing with vehicle-related damages……. Second, there are many opportunities for a defendant to take a claim out the RTA Protocol….if a defendant considers that it is better suited to investigation and determination under Part 7 (with the costs risk which that entails.” I appreciate that the learned judge appears to be referring to cases which are transferred to part 7. However, it cannot, in my judgment be right, that if an insurer for the defendant unsuccessfully applies within proceedings under the Protocol for a transfer of the case to Part 7 at the Stage 3 stage of the Protocol that the successfully objecting claimant cannot recover its costs of successfully defending that application, which is what Counsel for the Claimant submits. Leading Counsel rightly, in my judgment, points out that Bourous does not state that the application to which the second appeal related concerned an application under paragraph 7.2 of PD 49F with which the DDJ was in this case was concerned. The other point he makes is that whilst there are specific provisions for exiting the protocol, there is no provision in the PD which states that one can make an application to transfer at Stage 3. If that is the case, why should the Claimant not be able to recover its costs in the usual way? I accept the submission made by Leading Counsel for the Claimant that the fixed costs regime is intended to fix costs for certain stages of work which are provided for in the relevant Protocol. There will, however, as in this case, be occasions where there is other work done which falls outside of those stages and it is only right, proper and just that a judge can make a costs order in the usual way. Otherwise, we could end up with a scenario where a respondent cannot recover the costs of successfully defending a poor application which does not meet the bar set by CPR 44.11. I could imagine applications being made on tactical grounds to make it difficult for the respondent, for instance. The crucial point here is that there is no provision within the PD for an application to transfer to part 7 at the Stage 3 stage and that explains why there is no specific costs provision. Therefore, the Court has to resort to its general power to make a costs order which is what the DDJ did.

Accordingly, I find that the DDJ was not wrong in making the costs order which he did and that he was perfectly entitled to do so. I dismiss the Defendant’s appeal.

In the alternative, I am invited by Leading Counsel for the Claimant to find that it would have been an abuse of process for the Defendant to contend before the DDJ that the Court had no jurisdiction to award costs to the Claimant given that the Defendant pursued its application and/or allowed the Court to manage and deal with that application, on the basis that costs were at large.

The reality in this case is that had the Defendant been successful in its application, it would have been arguing that it should recover its costs on the basis that costs should follow the event given that it sought its costs in the application itself. Counsel for the Defendants seeks to argue that the Defendant’s legal representative is silent as to what type of costs are sought within its application and that therefore there is no abuse. I do not agree. The Defendant clearly sought its costs of making this application. There is no fixed provision for making such an application under Stage 3 and the Defendant’s legal representative would (or should) have known that. I accept that it would have been an abuse of process for the Defendant to contend otherwise only when the application was dismissed. I note that at paragraph 19 of Attorney General v Barker (2000) 1FLR 759, to which Leading Counsel has referred me, Lord Bingham LCJ describes such an approach as using the process of the Court “for a purpose or in a way which is significantly different from the ordinary and proper use of court process.” Accordingly, I would have dismissed the appeal on the grounds of an abuse of process on behalf of the Defendant had I not dismissed the Defendant’s appeal on the basis of the earlier ground.

I propose to deliver this judgment at 9.30 am on 8 January 2026. I would ask Counsel and Leading Counsel to provide me with, if possible, a joint note setting out any corrections which are required to this judgment by no later than 4pm 7 January 2026. This may be sent to me direct.

I note that within his order / judgment dated 12 August 2025, HHJ Petts states that “I think it appropriate to say that the appeal on ground (f) (if it arises) should be by way of re-hearing of the quantum of costs, rather than by way of review of the decision of Judge 1.” Accordingly, I will address those costs at the next hearing.