New Court of Appeal guidance on QOCS in mixed claims and warns of “tacking on” abuse

Published on
7 min read

The Court of Appeal has clarified the qualified one way costs shifting (QOCS) regime and the protection it offers Claimants can only apply to those claims concerning damages for personal injuries.

In short, QOCS allows a claimant to pursue a personal injury claim with no risk of an adverse costs liability to a defendant in the event that such a claim fails. It should be remembered that costs orders can be made against a claimant although not enforced.

There are well known exceptions to QOCS where costs orders can be enforced without permission of the court where (a) the claim is struck out where there are no reasonable grounds to bring such claim; (b) the proceedings are an abuse of the court’s process; and (c) the claimant’s conduct is likely to obstruct the just disposal of the proceedings.

It is also well recognised that QOCS protection can also be removed where a claimant is found to be fundamentally dishonesty. In such event, the court’s permission is required before a costs order can be enforced.

However, there is another exception, which has had far less attention than the fundamentally dishonest exception. Under CPR 44.16 (2)(b) costs orders can also be enforced against a claimant with permission of the court in “mixed cases”. The rule states:

“(2) Orders for costs made against the claimant may be enforced up to the full extent of such orders with the permission of the court, and to the extent that it considers just, where –

(a) …; or

(b) a claim is made for the benefit of the claimant other than a claim to which this Section applies.”

This is referred to as the “mixed case exception”.

The Court of Appeal has now provided some useful guidance in the case of Brown v Commissioner of Police of the Metropolis & Anor (2019) EWCA Civ 1724 (18 October 2019) as to how the courts are to approach mixed claims when considering QOCS and removing this protection in the event that a claim (or part of a mixed claim) fails.

Background

The defendants unlawfully obtained and used private information about the claimant and her daughter. She brought claims for damages under the Data Protection Act 1998 (DPA) and the Human Rights Act 1998 (HRA), and for breach of contract, misfeasance in public office, and the misuse of private information.

The defendants admitted liability under the DPA and the HRA. The claim for damages for breach of contract was not pursued. The claims for damages for misfeasance and misuse of private information went to trial. The claimant lost the claim for misfeasance and won her case for misuse of private information.

At the liability trial, HHJ Luba QC rejected the claim for damages for personal injury arising out of the defendants' conduct. He held that the claimant had not shown that her depression had been caused or materially contributed to by the defendants' wrongful actions. The claimant was awarded £9,000 apportioned between both defendants.

There were then arguments about costs. The defendants had made Part 36 offers in the total amount of £18,000. The claimant had failed to beat those offers. HHJ Luba QC ordered the defendants to pay 70% of the claimant's costs up to the date of the offers but ordered the appellant to pay the defendants' costs thereafter.

The claimant disputed the costs liability. She argued her claims had included a claim for damages for personal injury so she was protected by the QOCS regime against any adverse costs orders in an amount higher than the £9,000 she had recovered. The practical effect would be that she would receive zero in damages as this would be her total costs liability and the defendants could not take any steps towards enforcing the balance.

HHJ Luba QC agreed with the claimant and was granted automatic costs protection under QOCS. In simple terms, the judge found that an injury claim had been advanced under each of the four separate heads of claim.

If any one of the heads of claim did not claim for personal injury, then it is arguable that rule 44.16 (2)(b) applies and no automatic costs are due as it is  a mixed claim. The defendants appealed on the basis that the judge had wrongly granted the claimant the automatic protection under QOCS in respect of claims which were not claims for damages for personal injury.

Whipple J allowed the defendants’ appeal. The judge found that that this was a mixed claim, in that it included claims for damages for matters unconnected to personal injury, as well as a claim for personal injury damages. Therefore one of the express exceptions to the QOCS regime was triggered i.e. CPR 44.16 (2)(b).

Whipple J held that the automatic costs protection arising under QOCS fell away.  The judge expressed that even though that protection did not automatically apply, costs in a mixed claim remained a matter for the court to deal with in a fair and flexible fashion. The claimant then sought permission to appeal to the Court of Appeal.

Court of Appeal decision

Lord Justice Coulson delivered the lead judgment, which was unanimously agreed. The judgment is detailed but the key points to note are as follows:

  • “The QOCS regime only applies to claims for damages for personal injury. It does not apply to other types of claim...”
  • “In my view, the exception at r.44.16(2)(b) was designed to deal with the situation where a claim for damages for personal injury was only one of the claims being made in the proceedings. In those circumstances, the automatic nature of the QOCS protection falls away. But of course, that is not the end of the matter: it then becomes a question of the judge's discretion.”
  • “It is however important that flexibility is preserved. It would be wrong in principle to conclude that all mixed claims require discretion to be exercised in favour of the claimant, because that would lead to abuse, and the regular 'tacking on' of a claim for personal injury damages (regardless of the strength or weakness of the claim itself) in all sorts of other kinds of litigation, just to hide behind the QOCS protection (as Foskett J warned in Siddiqui).”

Conclusions

The Court of Appeal has clarified the QOCS regime and the protection it offers Claimants can only apply to those claims concerning damages for personal injuries.

Where claimants are pursuing other types of claim which may also include a claim for personal injury, then automatic protection under QOCS is not provided. This would be classed as mixed claim and CPR 44.16 (2)(b) would apply. 

QOCS protection is a matter for the judge’s discretion when considering mixed claims and is not guaranteed.

6 key takeaways from the new guidance

  1. The case is a useful reminder for defendants and insurers to carefully consider the case presented and whether it would attract QOCS protection.
  2. The Court of Appeal has warned of the risk when using judicial discretion when approaching mixed cases as it may lead to circumstances where claims for personal injury damages may be “tacked on” to exploit the benefits of QOCS.
  3. The key is to consider whether the claim presented is one of personal injury or is the claim an alternative claim seeking other remedies with a nominal claim for personal injury? If so, then it is likely such claim would fit within the mixed claim exception under CPR 44.16(2)(b). Also worth considering is the value of the personal injury element compared to other losses and remedies claimed.
  4. In circumstances where defendants and insurers have concerns of “tacking on”’, it would be prudent to notify the claimant of such concerns as soon as practicable and before trial.
  5. Where appropriate, claimants should also be put on notice as early as possible in litigation that QOCS protection will be challenged under CPR 44.16(2)(b).
  6. Last but by no means least, the court’s permission is required when looking to apply CPR 44.16(2)(b) to enforce the full extent of any costs orders in favour of a defendant.  Therefore the costs order will not necessarily be limited to the amount of damages recovered by a claimant. Again, this is down to judicial discretion and what is just.
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