Costs - Qualified One-Way Costs Shifting

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Overview

Qualified One-Way Costs Shifting (QOCS) plays a transformative role in personal injury litigation, affecting financial relationships between claimants and defendants. For SQE1 FLK1 candidates, a solid comprehension of QOCS is essential, intersecting with civil procedure, costs, and professional conduct. This article examines QOCS, exploring its theory, practical applications, and recent legal changes, equipping candidates with necessary understanding for exam success and legal practice.

QOCS Overview

QOCS moves away from the traditional 'loser pays' model in English civil cases. Introduced with the Jackson Reforms in 2013, QOCS improves access to justice by shielding claimants from the risk of paying defendants' costs in personal injury cases.

Legal Framework and Reach

QOCS is outlined in Civil Procedure Rules (CPR) 44.13 to 44.17, covering proceedings with claims for damages due to:

  1. Personal injuries (including fatal accidents)
  2. The Fatal Accidents Act 1976
  3. Claims arising from death or injury that benefit an estate under the Law Reform (Miscellaneous Provisions) Act 1934

It also applies to claims for psychological injuries.

Important Principles

  1. Asymmetric Protection: Successful claimants can recover costs, while unsuccessful claimants typically do not pay defendants' costs.
  2. Limited Cost Recovery: Defendants' cost recovery is capped at the amount of damages awarded.
  3. Exceptions: QOCS protection can be forfeited in cases of fundamental dishonesty or if a claim is struck out.

Real-world Use of QOCS

Example 1: Traffic Accident

Sarah suffers injuries in a road accident due to David's negligence. She seeks damages for injuries and lost income.

  • Outcome 1: Sarah wins £15,000. David can't claim costs unless he proves Sarah acted dishonestly.
  • Outcome 2: Sarah loses. Under QOCS, David can't claim costs unless dishonesty is demonstrated.

Example 2: Workplace Injury

Michael sues his employer, ABC Company, for workplace injuries.

  • Outcome 1: Michael wins £20,000. ABC can recover costs only with proof of dishonesty.
  • Outcome 2: Michael loses. QOCS prevents ABC from recovering costs.

The "Fundamental Dishonesty" Rule

Understanding the fundamental dishonesty rule is essential. It allows defendants to recover costs if a claimant is found to be deceitful in their case.

Signs of Fundamental Dishonesty

  1. Fabricating or exaggerating evidence
  2. Withholding critical information
  3. Making false statements under oath
  4. Omitting essential facts

Case Law Examples

  • Howlett v Davies [2017] EWCA Civ 1696: Dishonesty must relate to a major part of the claim, not a minor issue.
  • London Organising Committee of the Olympic and Paralympic Games v Sinfield [2018] EWHC 51 (QB): Emphasized dishonesty must affect the core of the claim.

Part 36 Offers and QOCS

Part 36 offers introduce strategic elements to personal injury cases. While QOCS offers general protection, Part 36 can influence cost outcomes.

Key Points

  1. The "Beat" Test: If a claimant receives a more favorable judgment than the offer, adverse costs are generally avoided.
  2. The "Worse" Test: A less favorable judgment may result in paying the defendant's costs, limited by QOCS to the damages awarded.
  3. The "Same" Test: A matching judgment might incur some costs, moderated by QOCS.

Example: Strategic Part 36 Use

Emma seeks £30,000 in a road accident claim. The defendant offers £20,000, which Emma rejects. She is awarded £18,000 at trial. Despite QOCS, Emma might pay costs from the offer's expiry, up to £18,000.

Recent Developments

Staying informed of recent changes is important for exam candidates and legal professionals.

Expanding QOCS Protection

Cartwright v Venduct Engineering Limited [2018] EWCA Civ 1654: Confirmed QOCS covers appeals, not just initial hearings.

Broadening QOCS to Mixed Claims

Brown v Commissioner of Police of the Metropolis [2019] EWCA Civ 1724: Decided QOCS applies to whole proceedings if they include personal injury claims, even with other claims involved.

Conclusion

Qualified One-Way Costs Shifting is significant in personal injury law, balancing justice access with claim management. For SQE1 FLK1 candidates, understanding QOCS is essential for managing financial aspects of personal injury cases and developing robust litigation strategies. Remember:

  1. QOCS shields claimants from costs in most situations.
  2. Dishonesty can lead to loss of protection.
  3. Part 36 offers can alter cost outcomes.
  4. Recent case law has clarified QOCS application.

By fully understanding these elements, candidates will be ready for the SQE1 FLK1 exam and future personal injury litigation practice.