In Owen Tabbitt v Thomas Clark [2023] EWCA Civ 744, the Court of Appeal upheld the High Court’s decision of 1 December 2022 to dismiss the claimant’s application for an order preserving the application of the QOCS rules in existence at the time.
The claimant wished to guard against the future QOCS rule change approved by the Civil Procedure Rules Committee which, as drafted, would permit enforcement by a defendant against the claimant’s damages and costs order.
In 2016 the claimant was involved in a road traffic accident with a vehicle driven by the defendant. The claimant sustained a serious personal injury and issued proceedings in December 2018. In January 2022 the defendant made a Part 36 offer of £800,000, which was not accepted until November 2022.
The parties were in agreement that the defendant should pay the claimant’s costs of the action up until the date of expiry of the Part 36 offer, with the claimant paying the defendant’s costs thereafter. In addition, the claimant sought a declaration that:
“Pursuant to rule 44.14 CPR, the defendant is not permitted to enforce (including by way of set-off) the costs order in paragraph 3 of this order in his favour against the claimant.”
At first instance, the only issue before the court was whether to make that declaration.
CPR 44.14 (2) provides that:
“Orders for costs made against the claimant may only be enforced after the proceedings have been concluded and the costs been assessed or agreed.”
Judge Walden-Smith accepted that she had the power to make an order in the form of the declaration sought by the claimant, but in the exercise of her discretion declined to do so, saying:
“It is not for the court to cast the rules as they are currently worded into stone so that if there were to be a rule change that had retrospective effect, that rule change could not take effect in the way that was intended.”
The claimant argued that the extent of the court’s powers under section 51 of the Senior Court Act 1981 included a power to determine the extent to which costs are to be paid, which means that the court can decide the question of the enforceability of any costs order at the date when it makes the order.
The QOCS rules are so tightly drawn that they compelled a judge to exercise any discretion to deal with the question of enforceability in favour of doing so on the basis of the rules as they stood at the date of the decision.
Further, the principle of finality meant that the prevailing QOCS rules in existence at the time the order was made were the rules that were applicable.
The Court of Appeal rejected the arguments saying that the QOCS rules themselves deal with the question of enforceability and their effect did not need to be replicated in a declaratory judgment.
The question of the enforcement of orders is an activity downstream of the substantive judgment. The principle of finality is not about leaving some matters over for further decision – it is about changing or challenging orders that have been made.
The court held that the judge was entitled, in the exercise of her wide discretion, to decline to make the order sought and to leave the matter to the CPRC.
Keoghs represented the defendant in the action and upon appeal. During the course of the appeal, the CPRC amended the QOCS rules with transitional provisions that prevented the defendant from enforcing the order in any event.
During the course of the hearing the court was made aware that there was an unsuccessful mediation and that the claimant’s costs of the appeal were over £137,000 which was almost three times the defendant’s costs of appeal. The court said:
“…the unfortunate reality of this appeal is that what seems to be an issue is the position as between Mr Tabbitt and his own lawyers. It is very regrettable that so much money has been spent on pursuing both the original application and this appeal, which now far exceeds the amount of costs initially in issue.”
Prior to the mediation, the defendant had offered to bear his own costs if the claimant withdrew the appeal. This issue over the deduction of the solicitor’s costs from the claimant’s damages could have been avoided.
For more information, please contact Howard Dean Partner & Head of Costs, or Julie Park, Partner in Complex Injury.
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