22 January, 2019
Andrew Graeme Waring v Mark Mcdonnell (2018) CC (Brighton) (Judge Venn) 06/11/2018
The Court has ruled that a defendant who made an unsuccessful counterclaim was not entitled to the protection of qualified one-way costs.
Two cyclists were involved in a head on collision, both sustained personal injury and both pursued claims for damages for personal injury. The Judge gave judgment for the claimant and dismissed the defendant's counterclaim. The defendant asserted that he was protected by QOCS and any order for costs made against him could not be enforced by the claimant. HHJ Venn adjourned the issue of costs to consider the issue.
After considering detailed skeleton arguments from either side, the Judge concluded that the defendant in this case was not an unsuccessful claimant in the claimant's claim for damages for personal injury (he was not a claimant at all in the claimant's claim for damages for personal injury); he was an unsuccessful defendant (and an unsuccessful claimant in his counterclaim for damages for personal injury). He only had the protection of the QOCS regime in respect of his claim for damages for personal injury and did not benefit from it in the claimant's claim for damages for personal injury.
This decision contradicts the recent finding in Ketchion v McEwan  where HHJ Freedman found that that the reference to "proceedings" in r.44.13 included a claim and a counterclaim. HHJ Venn disagreed with this construction, noting that HHJ Freedman had not had the opportunity to hear full arguments on the issue.
HHJ Venn put forward compelling arguments to support her interpretation of the QOCS rules. She argued that any other construction would be unjust and inconsistent with the stated aims of the QOCS regime. She pointed out that RTA defendants would be incentivised to encourage counterclaims for damages for personal injury, as even if the counterclaim were unsuccessful there would be no liability for costs. Access to justice would also be reduced as solicitors would be forced to cease acting once a counterclaim was intimated as they would be unlikely to ever recover any costs; and liability insurers would not only avoid having to pay ATE premiums and success fees under CFAs, they would, in many cases, avoid having to pay any costs to a successful claimant at all.
It should be noted that both Waring and Ketchion are lower court decisions, and are therefore not binding decisions. Whilst the Waring decision is likely to be preferred, a higher court decision is clearly required to guide parties on this issue.