QOCS to be introduced to all PI claims
When the draft Legal Aid, Sentencing and Punishment of Offenders Bill was published last year, many expressed surprise that the same made no mention of Qualified One Way Costs Shifting (‘QOCS’.)
Last week’s ministerial statement (which was amended by today’s Ministerial Statement) however, made it clear that a regime of QOCS is to be introduced in all personal injury matters. Importantly, QOCS will apply regardless of the financial means of the parties; and the regime will arise in both first-instance and appeal proceedings.
The basic premise of QOCS is relatively straightforward. In most circumstances:
- If a Claimant loses a personal injury claim, they will not have to pay the Defendant’s costs; but
- If a Claimant wins a personal injury claim, the Defendant will have to pay their costs;
(Whilst, on its face, this may seem slightly unfair, in practice it will mean that Claimants will no longer need to purchase After The Event Legal Expenses Insurance (‘ATE insurance’). In his final report, Lord Justice Jackson referred to figures provided by the Medical Protection Society which indicated that they had paid-out £2.8m in relation to ATE insurance policies to successful Claimants, but had recovered just £368,000 from unsuccessful Claimants. As their outlay on ATE insurance far exceeded their costs recovery, it would appear that Defendants will be better-off under the QOCS regime than at present.)
A number of special provisions look likely to be introduced into the QOCS regime:
- If the claim is found to be fraudulent on the balance of probabilities, the protection offered by QOCS will be lost.
- Similarly, if the claim is struck-out for failure to disclose a reasonable cause of action, or if the claim is otherwise considered to be an abuse of the Court’s process or likely to obstruct the just disposal of the proceedings the protection afforded by QOCS will also be lost.
- If the Claimant fails to beat a Part 36 offer made by a Defendant, the usual Part 36 costs consequences will apply. The Claimant’s liability will be limited to the amount of any damages recovered from the Defendant.
The Ministerial Statement confirmed that the Ministry of Justice were considering the practicality of disapplying QOCS in cases – or elements of cases – which were pursued for the benefit of a third party. Such a circumstance is perhaps most likely to arise in cases in which a claim for credit hire of a replacement vehicle is pursued following an RTA.