I am grateful to Barrister Kevin Latham for sending me details of the decision of HHJ Venn in Waring -v- McDonell  EW Misc B11 (CC). A link to the full decision is also available at the foot of Kevin’s article on the case here. The decision relates to whether an unsuccessful counterclaiming defendant has the benefit of QOCS protection. In the Waring case HHJ Venn was clear in her judgment that a defendant has no such protection. There are now two conflicting judgments on this issue.
“The defendant in this case was not an unsuccessful claimant in the claimant’s claim for damages for personal injury (he was not a claimant at all in the claimant’s claim for damages for personal injury); he was an unsuccessful defendant (and an unsuccessful claimant in his counterclaim for damages for personal injury). He only has the protection of the QOCS regime in respect of his claim for damages for personal injury and does not benefit from it in the claimant’s claim for damages for personal injury.”
The claimant brought an action for damages for personal injury. The defendant counterclaimed. At trial the judge gave judgment for the claimant and dismissed the counterclaim. The defendant asserted that it had the benefit of QOCS protection.
The defendant relied on the judgment in Ketchion -v- McEwan (28th June 2018), a copy of which is available here, 1061737_Ketchion v McEwan_Judgment for Approval_26 6 18 and which was discussed in a post on the case in September this year.
The judge disagreed with the defendant. She found that QOCS did not apply to a defendant in this position. There is a very detailed consideration of the relevant case law, including the Ketchion case.
29. The defendant is not, in the claim in which he is the defendant, protected by the QOCS regime; in his capacity as defendant, he is not making a claim for damages for personal injury. In the context of CPR 44.13 and its application to this claim, the word “proceedings” is synonymous with “a claim”.
30. This analysis is consistent with the judgment of Lewison LJ in Howe, who said that in some contexts “the word “proceedings” can have a narrower meaning” and the judgment of Lord Sumption in Plevin, who stated:
“19 However, “proceedings” is not a defined term in the legislation, nor is it a term of art under the general law. Its meaning must depend on its statutory context and on the underlying purpose of the provision in which it appears, so far as that can be discerned. The context in which the word appears in section 46(3) of LASPO is different and so, in my judgment, is the result”
20 The starting point is that as a matter of ordinary language one wold say that the proceedings were brought in support of a claim, and were not over until the courts had disposed of that claim one way or the other at whatever level of the judicial hierarchy. The word is synonymous with an action. In the cases cited above, relating to the awarding or assessment of costs, the ordinary meaning is displaced because a distinct order for costs must be made in respect of the trial and each subsequent appeal, and a separate assessment made of the costs specifically relating to each stage. They therefore fall to be treated for those purposes as separate proceedings. [Emphasis supplied]”
31. The underlying purpose of the QOCS regime is, as set out above, to protect those who suffer injuries from the risk of adverse costs orders obtained by insured, self-insured or well-funded defendants. The purpose is not to protect those who are liable to pay damages to an injured party from the risk of adverse costs orders made against them in their capacity as defendant or paying party.
32. As Mr Latham noted, the word “proceedings” is often used interchangeably with the word “claim” in the CPR. For example, CPR 36.14 states:
(1) If a Part 36 offer is accepted, the claim will be stayed. …
(3) If a Part 36 offer which relates to part only of the claim is accepted, the claim will be stayed as to that part upon the terms of the of the offer
33. CPR 36.16 goes on to state:
(3) Paragraph (2) does not apply – 13 … (b) where the proceedings have been stayed under rule 36.14 following acceptance of a Part 36 offer; …
34. As appears, CPR 36.14 states that a claim will be stayed if a Part 36 offer is accepted, but CPR 36.16 refers to proceedings having been stayed under CPR 36.14 following acceptance of a Part 36 offer. The word “proceedings” can have different meanings in different contexts.
35. Edis J adopted Vos LJ’s reasoning in Wagenaar in his judgment in Parker at paragraph
16: Following the approach in Wagenaar I accept that not every step in proceedings (broadly defined) which began with a claim for personal injuries is included in the definition of the word “proceedings” as used in CPR 44.13. That word as there used has a narrower construction than that. That rule is all about a claim made by a claimant against one or more defendants which includes a claim for damages for personal injuries. For this reason a claim by a defendant against a third party for a contribution to or indemnity against such a claim is included in the proceedings as broadly defined, but not as narrowly defined for the purposes of CPR 44.13. [Emphasis supplied]
36. I do not accept the submission made by Mr Ashby that the effect of Cartwright is that the word “proceedings” in CPR 44.13 must be construed more widely, so as to give the defendant QOCS protection in the claim he is defendant in. In Cartwright, the claimant brought a claim against a number of defendants and the QOCS rules were applied to that claim, the single claim against the six defendants; the context material to the QOCS regime was that there was a single claim for damages arising out of a single injury, not six sets of proceedings.
37. The decision of HHJ Freedman in Ketchion is not binding on me and I respectfully disagree with HHJ Freedman’s conclusions. It should be noted that HHJ Freedman did not appear to have the benefit of the full argument I heard.
38. HHJ Freedman distilled the following principles from Cartwright (at paragraph 16 of his judgment):
(i) a wide meaning is to be given to the word proceedings (see paragraphs 26 and 30);
(ii) Wagenaar does not permit a claim brought against six defendants to be interpreted as six separate sets of proceedings as opposed to a single set of proceedings;
(iii) only very limited attention should be paid to the preparatory materials leading up to CPR 44.13- 44.17 coming into force, including the Final Report of December 2009.
39. I do not agree that Cartwright holds that a wide meaning is to be given to the word “proceedings” in CPR 44.13:
a. In paragraph 26 of his judgment, Coulson LJ is discussing CPR 44.14(1) and it is CPR 44.14(1) that he is referring to when he says, “The language is wide”.
b. In paragraph 30 of his judgment, Coulson LJ says: “Not only does Vos LJ’s analysis not support Mr Hogan’s stance, but in my view, it is contrary to it, in particular because of his clear reference to the application of QOWCS “to a single claim against a defendant or defendants”. Vos LJ thus envisaged that there may be one set of proceedings with multiple defendants. For completeness, I should add that in Howe v Motor Insurers’ Bureau (no 2)  EWCA Civ 2523, this court again adopted a wide meaning of the word ‘proceedings’, this time in relation to r. 44.15(1)”. Again, it can be seen how “proceedings” in CPR 44.13 is synonymous with “a claim” – a claim with multiple defendants. Howe concerned a different rule. Cartwright shows that regard must be had to the context and underlying purpose of the provision being considered (an approach consistent with Plevin, Howe and Parker).
40. HHJ Freedman thought it “patently absurd and illogical” if the word “proceedings” is “deemed to cover all of the claims brought against six separate defendants, but not a claim and Part 20 claim, both of which arise out of the same accident and are joined in one action”. HHJ Freedman appeared to view the claim against six defendants in Cartwright as six separate claims and concluded that if they were one set of proceedings, two separate claims (a claim and a counterclaim) must also be one set of proceedings for the purposes of CPR 44.13. However, the claim brought by Cartwright against six separate defendants was not six separate claims for the purposes of the QOCS regime; it was a single claim against a number of defendants (as envisaged by Vos LJ in Wagenaar).
41. HHJ Freedman went on to hold that the “proper interpretation of CPR 44.13 is that the reference to proceedings is to both the claim and the counterclaim; and that since it is expressly stated that a Claimant includes a person who brings a counterclaim/additional claim, it follows that the Defendant/Part 20 Claimant has the protection of QOCS”. I do not agree with that conclusion. The word “proceedings” in CPR 44.13 means the claim or the counterclaim; it does not mean the entire action, including the claim, the counterclaim and all the parties. HHJ Freedman’s analysis is not consistent with the decision in Wagenaar.
42. If the analysis of the defendant (applying Ketchion) is correct, the consequences are unjust and inconsistent with the stated aims of the QOCS regime:
a. Insurers of defendants to claims for personal injury arising out of road traffic collisions would be incentivised to encourage counterclaims for damages for 16 personal injury; even if the counterclaim was unsuccessful, there would be no liability for costs. In Ketchion, the defendant argued that counterclaims totally devoid of merit or being used as a vehicle to secure QOCS protection would be struck out as an abuse of process or disclosing no reasonable grounds; this was not realistic. In claims arising out of road traffic collisions, the claims rest on the evidence of the parties, tested under cross-examination; the prospect of a counterclaim being dismissed as fanciful without conducting a mini-trial (which is not appropriate in an application for summary judgment) are slim at best. Even in the most straightforward of road traffic collisions, the ‘rear-end shunt’, liability might be disputed if it is alleged that the driver in front wrongfully slammed on their brakes.
b. Claimants making claims for damages for personal injury arising out of road traffic collisions (where a counterclaim is most likely to be made) would be significantly worse off than any other claimant making a claim for damages for personal injury. It is difficult to think of examples of counterclaims for damages for personal injury being brought to claims arising out of an accident at work, in the context of clinical negligence, or a public liability claim. It was not the stated purpose of the QOCS regime to significantly disadvantage claimants injured in road traffic collisions.
c. Access to justice would be reduced; it would be surprising if any solicitor continued to act once a counterclaim was intimated as they would be unlikely to ever recover any costs (unless the client was privately paying, in which case they may derive little benefit from the litigation). This would be stark in catastrophic injury claims, where disbursements for medico-legal reports alone are likely to be significant.
d. The Part 36 regime would have no teeth; costs recovery would be limited to the amount of damages recovered in the counterclaim (if any).
e. Liability insurers would not only avoid having to pay ATE premiums and success fees under CFAs, they would, in many cases, avoid having to pay any costs to a successful claimant at all.
43. If such radical changes were intended, one would expect them to have been spelt out.
44. I was also referred to the decision of Whipple J in Commissioner of Police of the Metropolis v Brown; Chief Constable of Greater Manchester Police v Brown (Equality and Human Rights Commission intervening)  EWHC 2471 QB. At paragraph 52, Whipple J said: “The key is in the definition of a “personal injury” claim, because it is only a personal injury claim which carries automatic entitlement to QOCS protection. Personal injury claims are claims for damages in respect of personal injuries (see the definition at CPR 2.3)…”. It is obvious that the defence of a personal injury claim is not itself a personal injury claim; my analysis is consistent with the judgment of Whipple J.
45. The fact that there are two different claims is obvious from the order it was agreed I should make at the end of the trial, entering judgment for the claimant for the agreed damages and dismissing the counterclaim.
46. The defendant in this case was not an unsuccessful claimant in the claimant’s claim for damages for personal injury (he was not a claimant at all in the claimant’s claim for damages for personal injury); he was an unsuccessful defendant (and an unsuccessful claimant in his counterclaim for damages for personal injury). He only has the protection of the QOCS regime in respect of his claim for damages for personal injury and does not benefit from it in the claimant’s claim for damages for personal injury.