One of the Claimant friendly provisions of the Jackson reforms of 2013, QOCS, is retrospective save where CPR 44.17 applies. This reads: “This section does not apply to proceedings where the claimant has entered into a pre-commencement funding arrangement (as defined in rule 48.2).”
CPR 48.2 goes on to state that pursuant to CPR 43.2, a pre-commencement funding arrangement refers to:
- (a)proceedings other than insolvency-related proceedings, publication and privacy proceedings or a mesothelioma claim
(i) a funding arrangement as defined by rule 43.2(1)(k)(i) where –
(aa) the agreement was entered into before 1 April 2013 for the purposes of advocacy or litigation
(bb) advocacy or litigation services were provided to that person under the agreement in connection with that matter before 1 April 2013;
(ii) a funding arrangement as defined by rule 43.2(1)(k)(ii) where the party seeking to recover the insurance premium took out the insurance policy in relation to the proceedings before 1 April 2013;
In view of issues continuing to arise in relation to the applicability of the above provisions, the area is revisited here to assist should the same happen to you.
In most cases, establishing whether QOCS applies pursuant to the provisions above will be relatively straightforward. If a Claimant has a pre LASPO retainer and loses or discontinues a claim, then they are potentially exposed to the costs of an adverse costs order, or discontinuance unless an agreement can be reached with the Defendant.
Problems may arise for Solicitors when they take over a matter from previous Solicitors, with whom the Claimant had entered into a funding agreement covered by the provisions above.
“Problems may arise for Solicitors when they take over a matter from previous Solicitors, with whom the Claimant had entered into a funding agreement covered by the provisions above.”
If reading the provisions in strict form, even if the pre-LASPO retainer has been terminated, its mere existence potentially creates a situation of adverse costs exposure for the Claimant under the transitional rules, somewhat unfairly taking advantage of both positive ends of the trade off by paying no additional liabilities and recovering costs from the Claimant.
The issue of retainers being in effect both pre and post the introduction of QOCS is an area which is being considered by the Courts, perhaps in a way which was never envisaged when QOCS was introduced in 2013, something evidenced by two differing decisions since.
Landau v (1) The Big Bus Company Limited (2) Zeital (SCCO 1403806, 31 October 2014, Unreported)
This was a personal injury claim where the Claimant had the benefit of a pre-1 April 2013 CFA and an ATE insurance policy. After an unsuccessful Trial, the decision was appealed by the Claimant, who had entered into a second CFA to fund the appeal, as the original CFA did not cover costs of the appeal, which was again subsequently unsuccessful.
Whilst it was obvious the second CFA was a Post LASPO CFA, the transitional provisions of CPR 44.17 were held to strict effect by Master Howarth in the SCCO, who said that despite the post LASPO CFA, the appeal formed part of the same proceedings as the pre LASPO CFA and under CPR 44.17, QOCS should not apply.
Casseldine v The Diocese of Llandaff Board for Social Responsibility (Claim No. 3YU56348, 3 July 2015, Unreported)
The key elements of this case, are namely that, the Claimant entered into a pre LASPO CFA with initial Solicitors, which was later terminated, by Solicitors, in January 2013. The Claimant thereafter entered into a second post LASPO CFA in August 2013, with proceedings issued in December of that year.
When the Claim was dismissed at Trial, the issue of costs was referred to the District Judge, who gave particular consideration to the meaning of the word ‘proceedings’ within CPR 48.2, and decided that it “must be decided in the context in which the words appear.”
The Claimant had submitted that the abolition of recoverability of success fees and ATE insurance premiums was a “quid pro quo” for the introduction of QOCS, and as the initial Solicitors had terminated the CFA, then there was no obligation to pay an ATE or success fee.
Resultantly, the District Judge decided that QOCS did apply owing to the fact that the initial retainer has been terminated, and proceedings were not issued until after the second CFA was entered into.
This is a seemingly positive results for Claimant Solicitors, and is a case which may prove to have usual persuasive effects. The judge took a purposive approach and looked behind the intent of the provisions themselves, resulting in a sensible outcome. The decision creates an additional issue by considering the timing of the decision of the issuing of proceedings which may have a significant bearing on similar situations.
“The decision creates an additional issue by considering the timing of the decision of the issuing of proceedings which may have a significant bearing on similar situations.”
Despite this, the reality is that in the seemingly ever increasing Defendant friendly costs world, Solicitors who take over a file from a previous firm may still bear costs consequences if they LOSE, without ever benefiting from the pre LASPO success fees should they win.
The differing approaches taken by the Courts in these decisions is evident that the law surrounding Pre LASPO CFAs and QOCS is uncertain, despite the certainty it was no doubt intended to bring.
There will be decisions made up and down the Country in relation to these issues until all claims with an incident date Pre LASPO eventually fade away. We believe the approach taken by the Court in Casseldine is the correct approach; that a Defendant should not have the beneficial exemption from additional liabilities, whilst reaping the rewards of a lost claim. Here at MRN we will do everything we can to make sure a fair outcome is reached in such cases.
Should the issues above have any correlation to your own cases then please drop us a line for some advice on the matter.