UK: Costs: Court Rules That Both Claimant And Counterclaiming Defendant Cannot Have The Benefit Of QOCS

Last Updated: 3 December 2018
Article by Jonathan Shaw

Most Read Contributor in UK, November 2018

Waring v McDonnell [2018] EW Misc B11 (CC) 6 November 2018

In a recent decision in the County Court at Brighton, it was held that a defendant who had counterclaimed for personal injury, was not entitled to the benefit of QOCS protection.

Making her decision, Her Honour Judge Venn specifically considered the recent decision of Ketchion v McEwan, in which QOCS protection was awarded to an unsuccessful counterclaiming defendant. However, HHJ Venn disagreed with this decision, finding it carried consequences which were "unjust and inconsistent with the stated aims of the QOCS regime."

Background

On 14 June 2016, the Claimant and Defendant collided head-on whilst cycling. Both sustained personal injury. The Claimant issued a claim. The Defendant counterclaimed.

In September 2018, HHJ Venn gave judgment for the Claimant and dismissed the counterclaim. The Defendant asserted that he was protected by QOCS, that any order for costs made against him could not be enforced by the Claimant.

Counsel for the Defendant submitted that a wide meaning must be given to the word 'proceedings' in CPR 44.13. This would include a counterclaim for damages for personal injury brought by a defendant. The effect would be a defendant having QOCS protection for the unsuccessful counterclaim, and unsuccessful defence of a claimant's claim.

The Defendant relied upon the decision of Ketchion v McEwan, where QOCS protection was awarded to the unsuccessful counterclaiming defendant. The Defendant also referred to the decisions in Plevin, Howe and Cartwright.

The Claimant argued that nothing in the rules afforded the Defendant the benefits of QOCS protection in his capacity defending the Claimant's claim.

Outcome

HHJ Venn was conclusive in her ruling that Mr McDonnell, as the counterclaiming Defendant, was not entitled to QOCS protection.

Referring to the decision of Mr Justice Whipple in Brown, HHJ Venn explained her decision as follows:

  • The defendant in this case was not an unsuccessful claimant in the claimant's claim for damage for personal injury (he was not a claimant at all in the claimant's claim for damages for personal injury);
  • He was an unsuccessful defendant (and an unsuccessful claimant in his counterclaim for damages for personal injury);
  • He only has the protection of the QOCS regime in respect of his claim for damages for personal injury and does not benefit from it in the claimant's claim for damages for personal injury.

Conflicting decision

HHJ Freedman ruled on this issue on appeal in Ketchion v McEwan, resulting in a conflicting decision. At first instance, DDJ Thorn found that "whilst acknowledging the argument it may not have been intended that QOCS should apply in the circumstances of this claim and counterclaim, nevertheless, he felt constrained to find that QOCS gave the Defendant protection in costs."

HHJ Freedman determined that "the proper interpretation of CPR44.13 is that the reference to proceedings is to both the claim and counterclaim, and that since it is expressly stated that a Claimant includes a person who brings a counterclaim/additional claim, it follows that the Defendant/Part 20 Claimant has the protection of QOCS."

What can we learn?

  • The conflicting decisions in Waring and Ketchion were both made at County Court level and therefore we expect that this issue will be placed before a higher Court at some point in the future;
  • HHJ Venn specifically considered Ketchion, finding that it was not binding on her.She respectfully disagreed with HHJ Freedman's conclusions, finding that the following unintended consequences resulted in reference to the QOCS regime:

    • Insurers of defendants in RTA injury claims would be incentivised to encourage counterclaims for personal injury damages. This could prompt counterclaims for costs purposes, even in the most straightforward of collisions where liability could be disputed. HHJ Venn cited a rear end shunt where it might be alleged that "the driver in front wrongfully slammed on their brakes."
    • Claimants in RTA personal injury claims would be disadvantaged in a manner that other personal injury claimants are not. Their access to justice could be reduced as their legal advisers may find their costs recovery prospects restricted once a counterclaim is intimated. This issue would be particularly significant in catastrophic injury claims
    • The Part 36 regime would become toothless, and liability insurers would in many cases avoid having to pay costs to successful claimants, plus ATE premiums and success fees under CFAs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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