QOCS (CPR 44.13-44.17)
protects Claimants from costs orders in new PI claims, and was part of the
trade-off for the non-recoverability of additional liabilities following LAPSO.
I deal below
with the arguments which are beginning to be seen arising from the exceptions
to the rule.
(1) QOCS
44.13
provides that the section (Section II of part 44) applies to proceedings
which include a claim for damages for personal injuries (or fatal
accident claims). It includes in the definition of claimant a person bringing a
counterclaim.
The main provision is:
4.14—
(1)
Subject to rules 44.15 and 44.16, orders for costs
made against a claimant may be enforced without the permission of the court but
only to the extent that the aggregate amount in money terms of such orders does
not exceed the aggregate amount in money terms of any orders for damages and interest
made in favour of the claimant.
The effect
of this is clear – the Defendant can only have its costs up to the total
damages awarded to the Claimant. Thus, if the Claimant has lost at trial, and
recovered no damages, then the Defendant cannot recover any costs.
Part 36
still applies, and so a Claimant who recovers damages but fails to beat a
Defendant’s offer could see his damages lost to pay the Defendant’s costs from
the date of the expiry of the offer.
(2) Exceptions
There are
exceptions to QOCS which allow costs orders made against a Claimant to be
enforced to the full extent of such orders (so even a losing Claimant would be
liable for the full costs order):
Under 44.15:
Without the
permission of the court where the
claim has been struck out on the grounds that—
(a)the
claimant has disclosed no reasonable grounds for bringing the proceedings;
(b)the
proceedings are an abuse of the court’s process; or
(c)the
conduct of—
(i)the claimant; or
(ii)a person
acting on the claimant’s behalf and with the claimant’s knowledge of such
conduct,
is likely to obstruct the just disposal of
the proceedings.
Under 44.16 (1):
With the
court’s permission, where
the claim is found on the balance of probabilities to be fundamentally
dishonest.
Under 44.16(2):
With the
court’s permission, and to the
extent that it considers just, where:
(a) The proceedings include a claim for the
benefit of another person other than a dependant under the FAA 1976 [the order may be made against the person for
whose benefit the claim was made: 46.16(3)];
(b) A claim is made for the benefit of a claimant
other than a claim to which this section applies.
(3) Exceptions: analysis & arguments
The strike
out exceptions
The
important point to note here is that, where an application to strike out a
claim or counterclaim is successful, it is important that the order records the
reason for the strike out so that the costs order may be properly enforced.
Note also that
a strike out for failure to comply with rules or court orders does not
necessarily entitle the Defendant to its costs, unless the strike out also
falls within 44.15(c).
Fundamental
Dishonesty
Judge
Maloney QC, in Cambridge County Court, considered the meaning of the term and
its application in Gosling v (1) Hailo
(2) Screwfix Direct (available on Lawtel).
The Claimant
had been subject to video surveillance which demonstrated that he had greatly
exaggerated his symptoms (by showing him walking unaided and shopping, when he
later that day claimed to the expert that he walked with a crutch and could not
do the shopping). The Claimant settled and discontinued, resulting in a costs
order against him.
The issue
was whether that costs order could be enforced, and how the court should
determine the issue of whether the claimant had been fundamentally dishonest.
The Judge found
that the dishonesty must go to the root of the whole or a substantial part of
the claim, not some minor or collateral matter.
He also
found that there was no need to hold a hearing and take oral evidence from the
Claimant on the issue, as that would be disproportionate and, given the
overwhelming nature of the video evidence, the issue could be dealt with
summarily.
Therefore he
considered the extent of the claim for personal injuries and noted that around
half the general damages claimed – and all of the future care – related to the
knee injury. He therefore found that the Claimant’s dishonesty was fundamental,
and allowed the order to be enforced to its full extent.
Claim for a
person other than C
This is an
exception which is more likely to arise in run-of-the-mill RTA litigation.
Practice direction 44 states at paragraph 12.2: Examples of claims made for the financial benefit of a person other
than the claimant … are subrogated claims and claims for credit hire.
Clearly very
many personal injury RTA claims include a claim for credit hire; the practice
direction is clear that that is a claim for the benefit of a person other than
C, immediately defeating any argument that the hire was for the claimant’s
benefit and/or that the liability the claimant’s.
That
suggests that a large number of ordinary PI matters would fall within this ‘exception’
to QOCS, simply because they include a claim for credit hire.
Importantly,
however, before the costs order may be enforced there are two stages of
discretion to be exercised. 44.16(2) says the order may only be enforced: (i)
with the court’s permission and (ii) to the extent it considers just.
(i)
Exercising
the discretion
Rule 44.16
sets out exceptions to QOCS. The
purpose of QOCS is to protect claimants in claims which ‘include’ a claim for
personal injury. The rules envisage application to claims will include other
matters (including credit hire).
It seems therefore
that it would contrary to the principle of QOCS for the exception to apply
simply because there is a claim for credit hire. Something more exceptional
would, in my view, be required before the exception should be applied.
The rule is
more properly applied to claims which include PI only to gain the benefits of
QOCS, or those where the only dispute left at trial was the quantum for credit
hire.
It seems to
me that an ordinary RTA trial with a legitimate PI claim and credit hire should
not fall outside of QOCS.
(ii)
Extent of
order and paying party
Furthermore
even if the court decided to exercise that discretion, it should only do so to
the extent that it considers just. That may be £nil, if any more would not be just.
‘Just’ in this rule must again be considered in light of the public policy
background to QOCS.
The court
also has the power to make the order against the person (credit hire company?)
for whose benefit the claim was brought. The Practice Direction suggests that this
should normally be the case (para 12.5):
·
the
court will usually order any person other than the claimant for whose financial
benefit such a claim was made to pay all the costs of the proceedings or the
costs attributable to the issues to which rule 44.16(2)(a)
applies, or may exceptionally make such an order permitting the enforcement of
such an order for costs against the claimant;
· (b) the court may, as it thinks fair and just, determine the costs
attributable to claims for the financial benefit of persons other than the
claimant.
It is not
clear whether the reference to ‘usually’ means that the discretion should usually
be exercised, or that, where it is, the order should be made against the ‘other
person’.
However this
may be a useful starting point for the argument on behalf of the Defendant:
QOCS is intended to protect Claimants, not credit hire companies, and so where
a matter is lost at trial or on an issue of quantum for credit hire, the hire
company should not be afforded the same protection as the Claimant.
In my
experience, however, such applications by Defendants have not (yet) been successful.
That my change in a case where the only issue at trial was credit hire.
Claim other
than one to which the section applies
The first
part of the section applies QOCS to claims which include a claim for
personal injury. The vast majority of such claims will include a claim for
something else (even if only miscellaneous expenses).
Given that,
to fall within the section, a claim must only include PI, it is
difficult to see why there is an exception for claims that include something
else. There should be nothing unusual about the inclusion of the ’something
else’.
There is no
assistance in the Practice Direction. The only logical application of the rule
is where, again, there is a claim for ‘something else’ which includes a PI
claim only to gain the protection of QOCS. Given the wide drafting of the scope/application
rule, it would have to be quite obvious that that was the intention before such
an order should be considered.
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