QOCS and the Counterclaimant

Qualified One-Way Costs Shifting – QOCS – was introduced in 2013, through Civil Procedure Rules 44.13-44.17. This provides protection for claimants of legitimate personal injury and fatal accident cases from having to pay the defendant’s costs.

In this post, we’re reviewing what QOCS protection is and what happens when a defendant counterclaims for their costs. The slides and transcript for the video below are available at the bottom of the page.

QOCS and the Counterclaimant – Legal Shorts Video

What Is QOCS?

Where a claimant has successfully prosecuted a personal injury claim, they can typically recover their costs from the defendant. However, the implementation of QOCS protection meant that defendants could not similarly recover their own costs, should they successfully defend their case. QOCS is now well established and has been in place for a number of years.

When does QOCS apply?

Civil Procedure Rule 44.13 sets out that QOCS applies to:

• proceedings that include claims for personal injuries;
• claims under the Fatal Accidents Act (1976);
• or claims which have arisen out of death or personal injury and survive for the benefit of the estate.

Effectively, a successful claimant is only required to actually pay any costs order against them in favour of the defendant, up to the value of the amount that they have been ordered to receive by the court.

But how should it apply in cases involving counterclaimants also bringing a claim for personal injury?

When does QOCS not apply?

A claimant can lose their QOCS protection if any of the following criteria are met:

• There were no reasonable grounds for bringing the proceedings.
• The proceedings are considered an abuse of process.
• The claimant has acted in a manner that is likely to obstruct the just disposal of proceedings.

Examples of QOCS Protection

To better understand QOCS proceedings, let’s put them into practice.

Claimant A, who has their claim dismissed and is awarded no damages, is not required to pay any costs orders made in favour of the defendant.

In a separate case, Claimant B’s claim is successful and they have been awarded the sum of £1,000 for damages and interest by the court. However, if the defendant has received an order for costs against the claimant in the sum of £1,200, the defendant can only enforce that order up the value of £1,000.

So, QOCS sets out that a defendant cannot claim costs for a successfully-defended case – but what happens when the defendant counterclaims?

QOCS and the Counterclaimant

Consider the conclusion of a trial where the claimant has brought their claim for personal injuries against the defendant, but the defendant has also brought a counterclaim, including personal injury, against the claimant. The judge’s found in favour of the claimant, and the counterclaiming defendant has lost.

The issue of costs falls to be dealt with, and the counterclaiming defendant argues that any costs orders made in favour of the claimant against the defendant cannot be enforced, because they meet the criteria set out in CPR 44.13.

They submit that the reference to proceedings includes all claims and counter-claims, and therefore, because they have not received any order for damages, they have nothing to actually pay.

Real QOCS counterclaimant cases

This is what was decided by His Honour Judge Freedman in Ketchion vs McEwan [2018].

The decision in Waring v McDonnell [2018] takes a different view as to the definition of proceedings. Her Honour Judge Venn determined that proceedings, as referred to in CPR 44.13, applied only to the bringing of the counterclaim and not to the defending of the claimant’s claim.

In these circumstances, QOCS protection remains in place for each party bringing their own claim, but not for defending claims made against them.

In 2021, St Pauls Chambers barrister Stephen Elphick appeared as council in a case wherein the presiding judge, His Honour Judge Gargan, took into account not only these two cases, but many different QOCS cases. He found in favour of the approach taken by Her Honour Judge Venn in Waring, and indeed many other circuit judges have come to the same conclusion, suggesting that the courts are at least now leaning towards the approach that QOCS protection will not provide a counterclaiming defendant with blanket protection in respect of costs.

If you would like to discuss a personal injury claim in more detail or if you are interested in instructing one of our experienced barristers, please contact our team today.

(Slides and Video Transcript)

Slide 1: Welcome to Legal Shorts by Stephen Elphick, barrister at St Pauls Chambers.

Slide 2: Today’s short topic is QOCS and the Counterclaimant.

Slide 3: Qualified One-Way Costs Shifting is now well established and has been in place for a number of years. CPR 44.13 makes it clear that QOCS applies to proceedings that include a claim for personal injuries, under the Fatal Accidents Act (1976) or where the claim arises out of death or personal injury and survives for the benefit of the estate.

Slide 4: CPR 44.14 sets out the effect of QOCS. Effectively, a successful claimant is only required to actually pay any costs order against them in favour of the defendant up to the value of the amount that they have been ordered to receive by the court.

Slide 5: So, looking at a couple of simple and straightforward examples, we can see in example one a Claimant who has their claim dismissed and is awarded no damages is not required to pay any costs orders made in favour of the defendant.

In example two, we can see that where the Claimant’s claim against the defendant is successful, and they have been awarded the sum of £1,000 for damages and interest by the court, but the defendant has received an order for costs against the Claimant in the sum of £1,200, the defendant can only enforce that order up the value of £1,000.

CPR 44.14 makes it clear how QOCS applies in these circumstances. But how should it apply in cases involving counterclaimants also bringing a claim for personal injury?

Slide 6: Consider the conclusion of a trial where the claimant has brought their claim for personal injuries against the defendant, but the defendant has also brought a counterclaim, including personal injury, against the claimant. The judge’s found in favour of the claimant, and the counterclaiming defendant has lost.

The issue of costs falls to be dealt with, and the counterclaiming defendant argues that any costs orders made against them in favour of the claimant cannot be enforced because they meet the criteria set out in CPR 44.13.

They submit that the reference to proceedings includes all claims and counter-claims, and therefore, because they have not received any order for damages, they have nothing to actually pay.

This is what was decided by His Honour Judge Freedman in Ketchion vs McEwan [2018]. The decision in Waring v McDonnell [2018] takes a different view as to the definition of proceedings. Taking a fairly crude summary of her judgement, Her Honour Judge Venn determined that proceedings, as referred to in CPR 44.13, applied only to the bringing of the counterclaim and not to the defending of the claimant’s claim.

In these circumstances, QOCS protection remains in place for each party bringing their own claim, but not for defending claims made against them.

Each of these decisions were made by circuit judges and, as yet, there are no higher authorities on this point.

Slide 7: However, in the case in which I appeared as council for the claimant, this issue fell to be decided at the conclusion of the claim.

In Sutcliffe v Ali [2021], in what, in my opinion, is a detailed and considered judgement, His Honour Judge Gargan found in favour of the approach taken by Her Honour Judge Venn in Waring.

Whilst this judgement is again circuit judge level, and is not authority, it does provide an indication that the courts are at least now leaning towards the approach that QOCS protection will not provide a counterclaiming defendant with blanket protection in respect of costs. A copy of the judgement of HHJ Gargan can be found on my webpage at stpaulschambers.com.

Slide 8: Thank you for taking the time to listen to this episode of Legal Shorts by Stephen Elphick, barrister at St Pauls Chambers.

QOCS Support

You can contact Stephen at [email protected] or on 0113 245 5866. Alternatively, you can contact our clerks if you have any further questions.