For proceedings issued after 6 April, the QOCS scheme will offer less protection as defendants will be able to recover costs from settlements as well as damages, and from deemed orders and agreements to pay damages as well as orders. Currently, defendants cannot recover costs against a Part 36 settlement or Tomlin order.
The change was made by way of statutory instrument. Under the Civil Procedure (Amendment) Rules 2023, SI 2023/105, passed last week, courts will be allowed ‘in cases falling within the scope of the qualified one-way costs regime to order that the parties’ costs liabilities be set-off against each other, Ho v Adelekun [2021] UKSC 43 having previously found that this rule, properly construed, did not allow the court to do so’. Defendants will be able to set off costs against deemed orders and agreements to pay damages or costs, ‘so to allow the off-setting of costs orders made in favour of a defendant and ensure that offers made under Part 36, and, for example, settlements concluded by way of a Tomlin Order, come within the rule’.
The rule change also reverses Cartwright v Venduct Engineering [2018] EWCA Civ 1654.
Sam Hayman, head of costs at Bolt Burdon Kemp, who acted as the costs lawyer in the Ho v Adelekun costs litigation, said: ‘This is a perilously dangerous situation for claimants—they now either face massive liabilities to their solicitors or law firms will face huge additional risks in representing claimants who rightly deserve access to justice.
‘The inherent imbalance of power underlying this situation cannot be ignored, particularly where my firm represents so many people who have been injured by State actors.’
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