Qualified One-Way Costs Shifting (QOCS)
WHAT IS IT?
Essentially it is a device to civil litigation funding that bars a Defendant from recovering its costs from a Claimant who is unsuccessful. The new rules are set out at CPR 44.13 to 44.17.
It is important to bear in mind that this applies only to personal injury cases and appears to have retrospective effect. There are however some significant exceptions:
1. where the claimant has disclosed no reasonable grounds for bringing the proceedings (CPR44.15(a))
2. where the proceedings are an abuse of the court’s process (CPR44.15(b))
3. where the conduct of the claimant; or 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 (CPR44.15(c))
4. where the claim is found on the balance of probabilities to be fundamentally dishonest (CPR44.16(1))
5. where the Claimant fails to beat a Defendant’s Part 36 offer.
6. where the Claimant is claiming an additional liability (CPR44.17)
All in all, this is a step forward for the Claimant as until now it was predominantly the case that if a Claimant were to discontinue his claim, an automatic entitlement for the Defendant to recover their wasted costs would arise. With QOCS, in such a case, the Defendant will be unable to recover its costs. The added benefit of QOCS is that exaggeration alone will not be sufficient to elicit the loss of QOCS.
There are two main conclusions that therefore arise, Defendants will be more than ever be looking to disqualify cases on the grounds of fraud and therefore do not be surprised if the Defendant incessantly queries the accident circumstances and issues Part 18 Questions.
Furthermore, Defendants will be using Part 36 offers more tactically than ever and it is thus imperative that Claimant solicitors consider the Defendant’s Part 36 offers very closely, without of course being bullied by the same. In light of the plethora of savings of the fat cat multinational insurance companies, in terms of ATE premiums and success fees, it remains to be seen whether Part 36 offers will be pitched at a record low in a bid to tempt lower settlements.
Our advice would therefore be: not to be lured by the Defendant’s bullying tactics arising out of the reforms in civil litigation funding and not to be satisfied by the benefits of QOCS to appease the public’s ultimate concern, namely; access to justice. Please remember that QOCS does not apply when the Claimant has failed to beat the Defendant’s Part 36 offer.