Levelling the costs playing field ?

The Government has proposed specific rule changes to the QOCS regime following the Supreme Court judgment of Ho v Adelkun [2021] UKSC 43 and has opened a consultation to consider the proposals.

The Qualified One Way Costs Shifting regime (QOCS) was introduced to personal injury cases in 2013 following Sir Rupert Jackson's 2010 Review of Civil Litigation Costs. The policy intention behind QOCS was to try and ensure that a claimant should not face the prospect of losing their house if they had acted reasonably in bringing a personal injury claim but had failed to succeed in that claim. Prior to 2013 if the claimant did not succeed in their case then the Defendant was entitled to seek payment of their costs.

There is of course still costs protection available to defendants if they make a Part 36 offer and the claimant fails to beat that offer. The Defendant is then entitled to claim indemnity costs from the date of the expiration of that offer which in most cases will be the date 21 days after that offer is made.

Rule 44.14 of the Civil Procedure Rules in respect of QOCS states that an order 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 is of any order for damages and interest. Therefore a defendant can claim their indemnity costs if the claimant does not beat the defendant's part 36 offer but their costs are limited to the value of the damages and interest the claimant is awarded.

This was upheld by the Supreme Court in the case of Ho but there are concerns that this may lead to results that appear to be unfair i.e. the defendant makes a reasonable Part 36 offer that the Claimant fails to beat but does not recover the entirety of their costs.

The proposed changes that the Civil Procedure Rules Committee (CPRC) are looking to include a proposal that the claimant's entitlement of costs (i.e. the claimant's solicitor's costs) is added to the amount that can be offset against the defendant's costs award.

The consultation will close on 20th June 2022 and it will be interesting to see if the proposal is implemented and it levels the playing field somewhat for defendants in respect of costs if they make a Part 36 offer which fails to be beaten.