Halting the discontinuance gravy train

The cat amongst the pigeons

As many will be aware, a new costs system was introduced back in 2013 for dealing with EL/PL personal injury claims.

The qualified one-way costs shifting (QOCS) process meant that defendants were no longer entitled to recover costs from a claimant, even if they successfully defended a case.

Rare exceptions to this rule were implemented, for example, if;

• The case is thrown out for an abuse of process or for want of a reasonable course of action
• The claimant fails to beat the defendant’s Part 36 offer (although the defendant can only recover costs that don’t exceed the level of the claimant’s damages)
• The claim is ‘fundamentally dishonest’on the balance of probabilities

Taking advantage

Since the implementation of QOCS, we have noticed an ever increasing trend for claimants to run cases up to trial before discontinuing at the very last minute. The last couple of years has seen this behaviour become particularly prevalent, for example, out of the thirty six cases one of our clients had listed for trial this year, seven discontinued just before the trial date. Out of those seven cases, two discontinued on the morning of trial with a further two discontinued shortly after paying the listings fee.

This would strongly suggest that claimants are willing to sit tight and wait for defendants to settle prior to trial, pressured into action by the costs involved in attending court.

Effectively claimants are using QOCS to chance their arm, with no intention of actually attending trial.

On the offensive

In order to combat this tactic, a couple of important strategies should be considered. Firstly, defendants should not be afraid to allege fundamental dishonesty in open correspondence if there is a basis for such an allegation. In fact, given QOCS doesn’t apply to a fundamentally dishonest claim, this argument should be made at the earliest opportunity.

This allegation and the inherent threat of having to pay a defendant’s costs may well be enough to force the claimant’s hand into filing a notice of discontinuance at an earlier stage.

It is also important that a defendant analyses the likely success of succeeding at trial, not just using economics as a reason to settle a matter in the early stages. If a defendant believes the prospect of success is good, then the matter should be defended up until trial and not just settled because it will be cheaper to do so.

By recognising the signs that a claimant is looking to play poker, and armed with a good hand in response, we can begin to reverse this damaging trend and reclaim the initiative that QOCS has slowly eroded.

For more information, please contact Coral Hallworth