THE NEW RULES ON QOCS FROM APRIL 6th: OMNIBUS EDITION
The new rules on QOCS come into force on the 6th April. Here is a review of the key points as to issue, the consequences and links to useful commentary.
WHEN THE RULES COME INTO FORCE
The key date is the date of issue. The Statutory Instrument states.
“(3) The amendments made by rule 24 of these Rules apply only to claims where proceedings are issued on or after 6th April 2023.”
An important point here is that proceedings issued on the 6th April 2023 are subject to the new regime.
WHAT IS MEANT BY “ISSUE”?
This could come to be an interesting argument at some point if there is a delay between lodging at court and “issue”. The date of issue is not necessarily the date that the court receives the claim form. It may well be that the date of “issue” is the date on which the court actions the proceedings.
THE PRACTICE DIRECTION ON “ISSUE OF PROCEEDINGS”
The difference between the date of issue and the relevant date for limitation purposes is recognised in the Practice Direction (PD7). There is a difference between the date of issue and the date of receipt.
“5.1 Proceedings are started when the court issues a claim form at the request of the claimant (see rule 7.2) but where the claim form as issued was received in the court office on a date earlier than the date on which it was issued by the court, the claim is ‘brought’ for the purposes of the Limitation Act 1980 and any other relevant statute on that earlier date.
5.2 The date on which the claim form was received by the court will be recorded by a date stamp either on the claim form held on the court file or on the letter that accompanied the claim form when it was received by the court.
5.3 An enquiry as to the date on which the claim form was received by the court should be directed to a court officer.
5.4 Parties proposing to start a claim which is approaching the expiry of the limitation period should recognise the potential importance of establishing the date the claim form was received by the court and should themselves make arrangements to record the date”
ELECTRONIC ISSUE: PRACTICE DIRECITON 51ZB
Practice Direction 51ZB has different rules.
(1) The court must notify the claimant by e-mail when the claim is received by the court.
(2) Notification of receipt does not constitute notice that the claim form has been issued.
(3) The court must issue the claim form when payment of the appropriate fee is confirmed.
(4) The claim is brought for the purpose of the Limitation Act 1980 and any other period of limitation at the point at which the claim is issued, and not before. CPR PD 7A paragraph 5.1 does not apply.
SO… ISSUE PROMPTLY
It is not possible to determine how the courts will construe the words “issued”. There is a strong likelihood that the words “issued” in the statutory instrument will be construed strictly to mean “issued” by the court, not merely received at the court. In these circumstances there is a need to be very prompt to ensure “issue” before the 6th April.
WHAT THE RULES DO
THE EXPLANATORY NOTES
The purpose of the new rules is to overturn the judgment of the Supreme Court in Ho v Adelekun  UKSC 43 so that a defendant, in a claim subject to QOCS, can set off any costs order in their favour against their costs liability to the claimant. This is made expressly clear in the explanatory notes.
“(i)to allow the court 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 UKSC 43 having previously found that this rule, properly construed, did not allow the court to do so; and
(ii)to include within this rule, as well as deemed orders, 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;”
HOW IT DOES THIS
THE “OLD” RULE
CPR 44.14 currently states
Effect of qualified one-way costs shifting
(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the claimant.
(2) Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.
(3) An order for costs which is enforced only to the extent permitted by paragraph (1) shall not be treated as an unsatisfied or outstanding judgment for the purposes of any court record.
THE “NEW” RULE
(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for or agreements to pay or settle a claim for, damages, costs and interest made in favour of the claimant.
(2) For the purposes of this Section, orders for costs include orders for costs deemed to have been made (either against the claimant of in favour of the claimant) as set out in rule 44.9.
(3) Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.
(4) Where enforcement is permitted against any order for costs made in favour of the claimant, rule 44.12 applies.
(5) An order for costs which is enforced only to the extent permitted by paragraph (1) shall not be treated as an unsatisfied or outstanding judgment for the purposes of any court record.
COSTS BARRISTER BLOG – ANDREW
In “That Hard Six” my colleague Andrew Hogan sets out the six points practitioners need to watch.
- A claimant could end up in debt to his own lawyers.
- There is an incentive for a claimant to take a marginal case to trial.
- A second wind for the ATE insurance industry.
- Issue before the 6th April 2023.
- Will the courts be overwhelmed in March?
- The rules are not retrospective.
“The changes will encourage settlements at an early stage and ensure parties seriously engage in meaningful attempts to resolve meritorious claims more swiftly, which will benefit injured claimants.”
THE COSTS LAWYER
“The rule changes will see greater risks for Claimants themselves and their lawyers with greater rewards for Defendants and their legal representatives. Defendants will see this as levelling the playing field but it cannot be denied that the changes shift the power balance firmly in the favour of Defendants. The real losers are the victims, the Claimant themselves, who will likely have to shoulder (rightly or wrongly) the costs of the increased risk. There will be greater pressure on Claimant lawyers”
CLYDE AND CO
“It is worth stating that compliance with Pre-Action Protocols is not meant to be optional and if claimant’s solicitors cut short the required time for responding or fail to engage in order to issue proceedings prematurely before April, they can be penalised in costs.”
“Defendants will be motivated to make early Part 36 offers, in some cases before any, or adequate, expert evidence has been obtained. These early offers will need to be given extremely thorough consideration and could result in many claims settling prematurely simply because of the very real concerns of the claimant regarding their potential costs liabilities.”
“For the Defendant market it is hard to conceive of a more favourable change that could have been made and will be a welcome respite from the recent battering Defendants have taken on QOCs in the Courts.”