An unsuccessful claimant in a case where defendants were added after the introduction of qualified one-way costs shifting (QOCS) can nevertheless benefit from costs protection, the Court of Appeal has held.
Under QOCS, which took effect on 1 April 2013, claimants who lose on liability do not have to pay the successful defendant’s costs (with some exceptions such as fundamental dishonesty).
In Corstorphine v Liverpool City Council [2018] EWCA Civ 270, Corstorphine’s personal injury claim relating to an injury on a playground tyre swing was unsuccessful. They had entered into a conditional fee agreement (CFA) with their solicitors, and taken out after-the-event legal expenses insurance (ATE). Seven months later, the QOCS regime came into effect. Subsequently, Liverpool City Council brought an additional claim against two other defendants. The claims were ordered to be tried together.
At trial, both claims were dismissed and the judge held that, as costs follow the event, Corstorphine should pay the costs of the successful parties. He held that QOCS did not apply to Corstorphine. This meant they faced a bill of more than £200,000 for both first, second and third defendants’ costs for the primary claim.
Corstorphine appealed, arguing that QOCS should apply to the second and third defendants’ costs.
Allowing the appeal, Lord Justice Hamblen said: ‘The purpose of the QOCS regime is to protect personal injury claimants from adverse costs orders. Originally that protection was provided by legal aid. Later it was provided by the complicated regime of CFAs and ATE policies. Now it is provided by the QOCS regime.’
He held that Corstorphine would have no protection unless QOCS applied. Even if assumed they could lawfully have taken out a new CFA and ATE after 1 April 2013, Corstorphine ‘might legitimately have taken the view that there was no need to do so once the QOCS regime applied’.
