In Amjad v UK Insurance Ltd [2023] EWHC 2832 (KB) Mr Justice Ritchie overturned a decision that the QOCS cap should be lifted in relation to a claimant who had failed to beat the defendant’s Part 36 offer and who had been debarred from arguing impecuniosity.  The judgment details with the correct way to construe CPR 44.16. It also is critical of the defendant’s conduct in raising matters, such as the claimant being debarred, for the first time at trial.


The claimant brought an action for damages for personal injury. As part of the claim he claimed £51,600 in hire charges, to replace his damaged taxi.  Impecuniosity was an issue.   At the trial the trial judge found that an unless order in relation to disclosure of documents had been breached and the claimant could not pursue the claim for hire.


At trial the claimant obtained judgment for £10,029.64. The claimant had failed to beat a Part 36 offer from the defendant.


The Judge ordered that judgment would be entered for the Claimant for £10,029.64. On costs the Defendant raised the Part 36 offer for £15,700 which expired on 14.5.2020. The Claimant had failed to beat it. As a result the Judge ordered the Defendant to pay the Claimant’s costs to 13.5.2020 and also ordered the Claimant to pay the Defendant’s costs from 14.5.2020 on the standard basis. The key part of the order was that pursuant to CPR r.44.16(2) the Judge granted permission to the Defendant to enforce the costs against the Claimant up to a maximum of £15,000, so around £5,000 more than the damages and interest awarded and so above the QOCS cap. This is the sum in dispute in this appeal”


CPR 14.16 (2)


(2) Orders for costs made against the claimant may be enforced up to the full extent of such orders with the permission of the court, and to the extent that it considers just, where –
(a) the proceedings include a claim which is made for the financial benefit of a person other than the claimant or a dependant within the meaning of section 1(3) of the Fatal Accidents Act 1976 (other than a claim in respect of the gratuitous provision of care, earnings paid by an employer or medical expenses); or
(b) a claim is made for the benefit of the claimant other than a claim to which this Section applies.


The judgment carries a detailed analysis of the case law and rules relating to QOCS, particularly where there were hire companies involved.

    1. The Judge in this appeal found that the CHC would have gained the benefit of the CHC charges claim. This was not appealed. Thus, the gateway in CPR r.44.16(2)(a) applied. In my judgment on a plain reading of the words in CPR r.44.16(2) and in particular the use of the word “or” between (a) and (b) and taking into account that both sub-sections require the Court to determine who gains the “benefit” of an award for CHC charges: either the Claimant or a third party, the sub-sections are generally mutually exclusive. The real test for the Court to determine is who gains all or most of the benefit of the award. I refer back to paras. 57-63 in this judgment for my reasoning. The CHC clearly would have gained the whole of the benefit of any award under the terms of the CHC agreement. The only benefit which the Claimant would have gained would have been the eradication of his residual liability under the CHC agreement. Thus, in my judgment, the Judge erred in making his tentative additional finding that (b) also applied.
    1. Once the gateway in (a) was open, the Court was empowered to look at making a NPCO against the CHC and would have been required to consider the case law setting out the tests and the provisions of the Senior Courts Act 1981 S.51 and CPR r.46.2 and Mee v Jones [2017] EWHC 1434Aiden Shipping Co Ltd v Interbulk Ltd [1986] AC 965; Symphony Group plc v Hodgson [1994] QB179 and Deutsche Bank AG v Sebastian Holdings Inc [2016] WLR 17. However, the Judge was not asked to do so by the Defendant and so did not. In my judgment the Judge was wrong then to lift the QOCS cap protecting the Claimant using sub-paragraph (a), the Court was not empowered to do so. I do not accept the Respondent’s submission here that the Claimant should apply for a NPCO at this stage.
    1. As for gateway (b), in my judgment it was not open and the Judge erred in finding that (b) applied as well as (a) because he had decided that the CHC benefitted from the CHC charges claim not the Claimant. That determines this appeal.
Just to do so under (b)
    1. However, if I am wrong and the Court could, in law, find that both the Claimant and a CHC “benefitted” from the CHC charges claim in this case, so that sub-paragraph (b) applied, then the Judge’s rulings in paras. 25-30 of the judgment need consideration.
    1. The Judge did not make use the words “in the round” to characterise the nature of the proceedings but it is clearly stated that he considered the CHC charges were the majority of the sums claimed and the reason why the claim went to trial. He expressly considered the decision in Brown. He correctly considered the CHC charges claim were a non PI claim. However, (presumably under sub-paragraph (b)) he appears to have ruled that the proceedings were characterised as “non PI”. I consider that decision to have been plainly wrong for the following reasons. Had the Defendant raised the assertion that the Claimant had failed to comply with his disclosure obligation under the unless order a few weeks after disclosure was given in late December 2021, when, in my judgment it should have, the issue would have been resolved before trial and the trial would have proceeded on a different basis: namely that the Claimant was debarred from claiming CHC charges because he could not assert impecuniosity. After the preliminary issue had been decided by an interlocutory Judge and the CHC charges claim had been struck out, the trial would have been about the injuries; BHR charges for a short period before the repairs were done, funded by the Claimant; fundamental dishonesty and other matters. The comparative values of the PI claims and non PI claims in dispute would have been completely different. The proper characterisation of the proceedings for trial would probably have been as a “PI claim”. The neutral costs position under QOCS would have been the starting point and most probably the ending point because the Defendant would have had to show exceptionality. The Part 36 offers would have been approached differently by the Claimant and the CHC before trial, knowing that the CHC charges had been struck out (if that is what would have been decided on the Defendant’s interlocutory application).
    1. Once the character of the proceedings had been decided (presumably under sub-paragraph (b)) the Judge should have moved on to consider whether it was just to make a cap lifting order against the Claimant. I set out the relevant factors at para. 66 above. The Judge should have asked himself:
“is it just to lift the cap on enforcement against this claimant who:

(1) has brought a claim for damages for personal injury and non PI;

(2) which was not frivolous or an abuse of process; and

(3) which has not been conducted in an abusive way; and

(4) which was not fundamentally dishonest; and

(5) has won some damages for personal injuries; and

(6) has failed to beat a Part 36 offer resulting in a costs liability?”

In these circumstances the factors which the Judge should have taken into account when considering whether it was just to order the Claimant personally to pay the costs, out of his own money (because his damages would be all used up) included all of the circumstances of the case, but in particular the following:
(1) The conduct of the parties: The Defendant had failed to prove fundamental dishonesty and had failed to take a “cards on the table” approach to the unless order. The Claimant had failed to beat 3 part 36 offers. None of this conduct by the Claimant would usually qualify as “exceptional” such that QOCS would be lifted, see the decision of Hill J in Afriyie. Did the breach of the unless order about disclosure qualify as “exceptional?” In my judgment it could not, in relation to lifting QOCS cover on costs, when the unless order issue should have been raised long before trial by the Defendant to save the very trial costs arising from the CHC charges claim affected by that issue.
(2) The amount of the damages and interest already lost by the failure to beat the Part 36 offer: the Claimant had lost all of the £10,000 odd damages awarded for his PI claims and the non PI claims.
(3) The relative value of the claim for damages for personal injury (the PI claim) compared with the claim for damage for non PI (to property: the vehicle repairs and BHR charges)): if the unless order point had been taken when it should have been taken, before trial, the relative values would have weighed in favour of QOCS remaining in place.
(4) The relative amount of costs, time and effort during the claim and the trial allocated to the non PI claim as compared to the PI heads of claim: The costs of the trial preparation, absent the impecuniosity issue, would have been pretty much as they were in any event because the Defendant was asserting dishonesty and putting the Claimant to proof of all his PI claims. The BHR still had to be determined. The costs of the BHR charges would have been a smaller proportion. The Impecuniosity issue was a procedural argument for which no evidence was served.
(5) The size of the defendant’s costs award relative to the size of the damages award: The Defendant’s costs were already eradicating all of the Claimant’s damages and interest.
(6) The financial situation of the claimant: the Judge had clear evidence that the Claimant was a low earner and had a wife and 3 children to support and was on working tax credit. The Judge found he earned £250 pw. This was not mentioned in the reasoning on costs. The fact that impecuniosity was debarred for the CHC charges claim did not apply to this stage of the case.
(7) The size of and actual liabilities (rather than the perceived liabilities) of the claimant in relation to: (1) the Defendant’s costs, (2) the ATE premiums, (3) the success fees and (4) the solicitor-own party costs; arising from the case: None of these matters were considered in the reasons given by the Judge.
    1. In my judgment the Judge erred by failing to consider these relevant matters in relation to: (1) the characterisation of the claim and (2) whether it was just to lift the cap on the Claimant’s liability for adverse costs. In relation to causation, £5,000 was nearly half of the Claimant’s annual income. The Judge took into account that the CHC charges claim put the case onto the multi-track; that the non PI claims were much larger than the PI claims and that the Claimant rejected valid Part 36 offers, but nothing more. He lifted the cap so that the Claimant had to pay £15,000 of the Defendant’s budgeted costs which totalled £17,009 (footnote 6 of the Respondent’s final skeleton). £15,000 was 88% of the budgeted costs. Whereas, on a proper analysis of the costs caused by the BHR charges and recovery and storage claims, which should have been the non PI claims which were in dispute, the percentage would have been far less on the basis that the CHC claim should have been recognised as struck out much earlier had the Defendant raised the assertion after disclosure. The repair costs were never in issue. A figure of 25% would have been in the right area which would have led to no lifting of the cap because the damages covered more than 25% of the Defendant’s costs.
    1. Ground 9: I consider that this ground is made out as expanded in submissions. The Judge erred in law on the following matters:
a. The finding that both of the CPR r.44.16(2) gateways: (a) and (b) applied. On the correct analysis only gateway (a) applied because the benefit of the CHC charges claim would have gone to the CHC.
b. In my judgment, as a matter of law, when considering to whom the benefit of a head of claim goes, gateways (a) and (b) are generally alternatives and the issue for the Court is to decide to whom the majority of the benefit goes.
c. Under gateway (a) the Judge was not asked to consider an NPCO and so did not do so. That did not permit or facilitate the Court to apply gateway (b) instead.
d. If I am wrong and gateway (b) did apply then the Judge failed to consider the relevant factors for the correct characterisation of the proceedings as a whole when he found this was a non PI claim. Property categorised the disputed claims at trial should have been, in the round, a PI claim. The exceptionality test should then have been applied.
e. If I am further in error, and the proceedings were properly characterised as “not a PI claim”, then in my judgment the Judge failed to consider the relevant factors, an in particular causation, to fulfil the justice filter set out at paras. 96-97 above when determining whether it was just to lift the enforcement cap so that the Claimant himself had to pay an additional £5,000 out of his own funds.
f. For these reasons, in my judgment, the QOCS cap should not have been lifted against this Claimant.
Re-opening permission to appeal on some of the other grounds
    1. As trailed above, I am concerned about certain other aspects of the judgment. I do not consider that it was right on the facts to find that the Claimant had breached the unless order relating to disclosure on impecuniosity. However, permission for appeal on that decision has been refused and a broad allowance in relation to findings of fact is afforded to first instance tribunals, which appellate courts rarely interfere with.
    1. Furthermore, I do not understand how an award of loss of profits of £750 (£250 pw for 3 weeks) could have been made when there was no such claim in the schedule of loss and when the Claimant did not lose any profits because he hired another taxi and kept on working. The Judge awarded BHR charges of around £1,300 so the loss of profit does not apply to the presumed hire charges for a presumed pecunious claimant. The rationale appears to be that this is what the Claimant would have lost had he paid to repair the car himself, that task taking 3 weeks to complete. So, he would have claimed loss of “profit” if he had paid for the repairs. But that is not the correct measure of the loss. The starting point would have been his lost gross profit, taking away only the running expenses, not the standing charges. None of that process was referred to. In any event if he was paying BHR charges for another taxi he would have suffered no loss of income.
    1. I am grateful to both counsel for considering my concerns at the hearing and making submissions on CPR Part 52 r.52.30. The factors permitting re-opening after permission has been refused at a renewed hearing are very narrow. The case must be exceptional and re-opening must be needed to avoid a real injustice.
    1. I have taken into account that had impecuniosity not been struck out the Defendant might have succeeded in reducing or defeating the claim for CHC charges on the basis of the Claimant’s comprehensive insurance; the offers made by the Defendant insurer straight after the RTA to provide a hire taxi to the Claimant; or on the basis that the court might have decided that the Claimant was not impecunious in any event even if the “impecunious” assertion had not been struck out. In addition, the loss of profit award has been made where, in my judgment, there was insufficient legal or factual basis for it. Therefore, I have come to the conclusion that sufficient grounds for re-opening are not made out.
  1. For the reasons set out above I allow the appeal and set aside paragraph 5 of the order of HHJ Pearce dated 16.9.2022. Enforcement of the Defendant’s costs shall be capped in accordance with CPR r.44.14(1).