Court of Appeal QOCS decision provides claimant insurers comfort, says expert

Out-Law News | 11 Jul 2017 | 10:19 am | 1 min. read

The Court of Appeal has ruled that qualified one-way costs shifting (QOCS) should apply where an injured party has the right to pursue compensation against an organisation such as an insurance company or tour operator, rather than the wrongdoer.

Costs expert Keith Levene of Pinsent Masons, the law firm behind Out-Law.com, said the judgment would provide reassurance to claimants and their insurers that they would not be liable for costs in similar cases.

"It is of benefit to claimants and their insurers that the QOCS regime is in place," Levene said.

The Court of Appeal was ruling in a case brought by Martin Howe against the Motor Insurers Bureau (MIB). Howe was paralysed in 2007 when he was driving a lorry in France that was hit by a wheel which detached from a lorry in front of him.

The driver of the other lorry was never traced and Howe brought a claim against the MIB, which was dismissed on the grounds that it was statute-barred. He was ordered to pay 85% of the costs of that claim. Howe argued that he should be protected by QOCS against paying those costs.

The QOCS regime was introduced following Lord Justice Jackson's review of the civil courts and reforms which took effect in April 2013. The rules give personal injury claimants protection from a liability for costs in the event of losing except where the claim is found to have been fraudulent.

The High Court threw out Howe's case on the grounds that it did not fall under the QOCS rules because it was not a claim for personal injury damages, and because the MIB had not been guilty of any breach of duty.

However, the Court of Appealdisagreed with that verdict. It said: “If the rules relating to the recoverable costs in a claim against the MIB are less favourable to a claimant than the rules relating to the recoverable costs in a claim against an insured driver, the principle of equivalence will have been breached. Plainly, if an injured person sues an insured driver his claim will be covered by QOCS.”

The court held that the Civil Procedure Rules (CPR) which deal with QOCS should be interpreted to include claims for compensation as well as for damages.

While the Court of Appeal said this treatment was a departure from “the strict and literal application of the words” of the CPR, it decided that it did not go against the grain of the rules.

Legislation recently introduced in Scotland could see a similar QOCS regime introduced in the Scottish courts.