The current position for Claimant practitioners is that Defendants are not currently able to set off their costs against both the Claimant’s damages and costs. The decisions in Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654; [2018] 1 WLR 6137 and Ho v Adelekun [2021] UKSC 43; [2021] 1 WLR 5132 were both supportive of this, however, in Ho v Adelekun there was a strong suggestion by the judiciary that the impact of the rules was not necessarily what the judiciary intended and it was very much felt that a significant change to the wording of the rules was needed before there was going to be a material shift in the position.
However, statutory instruments were last week passed that will now see a significant change to the CPR and which will impact Claimant practitioners significantly. Those that currently have QOCS protection need to be aware of the impact this is likely to have on them moving forwards.
From 6th April 2023, the CPR at 44.14 will be revised to reflect :-
Orders 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 of such orders does not exceed the aggregate amount in money terms of any orders for, or agreements to pay or settle a claim for, damages, costs and interest made in favour of the claimant.
The rules now encapsulate deemed costs orders and agreements to pay damages, this includes agreements such as Part 36 acceptance and Tomlin Orders which will now fall under the QOCs rules and consequently where claims settle with these mechanisms then the Defendants will be able to enforce its costs against damages, interest and any of the Claimant costs. This obviously reverses the decisions in the aforementioned cases. Now whilst this is clearly disappointing news, there is some glimmer of hope in that there will be no retrospective impact of this and this will only impact claims issued after 6th April 2023.
However, it wouldn’t be a significant change to the CPR without some potential cause to satellite litigation and we would expect to see one of the potential arguments made by a Defendant to be in relation to the issuing of Proceedings with assertions made that proceedings were issued early in order to avoid getting “caught” in the new rules. Subsequently, it would be wise for any practitioners looking to issue proceedings in the next few weeks , who would be afforded QOCS protection as it stands, to be clear on their files as to why they are issuing proceedings and to make sure that , should it be raised further down the line, that there is evidence to support the genuine issuing of the claim before 6th April 2023.
This step taken does raise the question as to whether access to justice really is available for Claimants when there is now seemingly a significant risk in relation to potential costs liabilities.