QOCS It All About Then?

In April 2013 Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is due to come in to force.  It introduces “Qualified One Way Costs Shifting”, so what is QOCS and what effect will it have on personal injury claims?

At present, the general rule in litigation is that the loser pays the winner’s costs.  Simple and fair; after all, if somebody wrongs me in some way and causes me a loss why should I have to pay the legal cost of getting compensated?  So, if person A causes person B to suffer personal injuries, person B can sue person A for compensation for their injuries and the legal costs of obtaining those damages.  If person B could not recover his or her costs, he may spend £5,000 on legal costs trying to recover £4,000 in damages, which is simply unfair.

This rule currently applies both ways.  So, if person B sues person A but the Court finds that person A was not legally responsible, person B is the loser and he will have to pay person A’s costs of defending the personal injury action against him.  Again, why not? Person B clearly had no case and why should person A lose out just because B wrongly sued him?

QOCS will remove that rule for personal injury Claimants only, so that a losing Claimant will not have to pay the Defendant’s costs.  A losing Defendant will still have to pay the Claimant’s costs, but a losing Claimant will not have the same sanction.  So if you sue somebody for personal injury damages and lose it costs you nothing, but if you win you recover damages and your legal costs.

The changes have been introduced by the Government ostensibly as a form of litigation reform, but in reality the aim is to react to growing pressure from the insurance industry to reduce the number of personal injury claims.  The fact that insurers are still making huge profits, and that insurance premiums have not been reduced following the introduction of other changes last year designed at reducing insurers’ outlay, is largely being ignored.  The Government is effectively trying to remove a certain percentage of personal injury claims to ensure that insurance companies make more money, so that insurance premiums can be reduced.  Personally, I cannot see that ever happening.

The strange consequence of all of this is that in the new QOCS regime a Claimant is at no risk at all if he pursues a case and loses, except in some limited circumstances such as when the claim is completely fraudulent or he refuses to accept a reasonable offer made by a Defendant and fails to “beat” that offer at a trial.  That means that in borderline cases, where the Claimant is unsure whether Court proceedings should be issued because if they lose they will have to pay their opponent’s costs, the Claimant will be able to continue with impunity.  Despite nationwide condemnation of the proposals throughout the legal world I can only see the changes benefiting the Claimant.  After all, if an insurer will never recover its costs of paying Solicitors to defend groundless cases brought against them, why bother defending them at all?  Why not pay the Claimant a nominal amount of damages on the basis that it is simply cheaper?

What effect the changes will have remains to be seen but make no mistake, this and the other raft of changes herald a new and uncertain era in the personal injury world.

 If you have been involved in an accident call David Mayor or any of our Personal Injury Solicitors for a free consultation on freephone 0800 975 2463, or contact us by email for free expert legal advice.

David Mayor

About David Mayor

David is Head of the Preston Office's Civil Litigation team and deals with all types of private Civil Court disputes. David’s blogs cover his expertise in all aspects of personal injury law from low value Road Traffic Accidents right through to complex large loss claims. David also writes and has a vast array of experience in Public Liability (trips and slips), Employer's Liability (accidents at work), and Motor Claims (motor vehicle accidents, pedestrian accidents).
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