Qualified one-way costs shifting (QOCS) does apply for the benefit of a paralysed lorry driver who had his claim struck out against the Motor Insurance Bureau (MIB), the Court of Appeal has ruled, overturning the High Court.
Many cases have been stayed pending the decision on whether an injured party has the right to pursue a right of compensation against a body, such as an insurer or a tour operator, rather than the actual wrongdoer and claim QOCS.
The claimant, Michael Howe, was left partially paralysed following a road traffic accident in France with an untraced driver more than 10 years ago. His claim for damages was struck out after his original lawyers missed various limitation periods to bring his claim, and Mr Howe was ordered to pay 85% of the MIB’s costs.
The claim was brought under regulation 13 of the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003, which talks about a “claim for compensation” from the MIB.
Meanwhile, CPR part 44.13, dealing with QOCS, says it applies to “damages for personal injuries”.
At first instance, Mr Justice Stewart found that Mr Howe was not entitled to QOCS protection on the basis that the claim against the MIB was not a claim for damages for personal injury, because the MIB had not injured the claimant nor done him any other wrong.
The judge acknowledged that the rationale for QOCS applied to Mr Howe’s claim but nevertheless held that it was outside the scope of part 44.13.
The claim was a claim to compensation recoverable by statute, rather than in tort at common law, he said, adding that the MIB had not been guilty of any breach of duty.
The Court of Appeal, with Lord Justice Lewison handing down the judgment, said part 44.13 could be interpreted to include a claim for compensation under regulation 13.
“The change required is to disapply the common law taxonomy of legal claims to a claim to compensation under regulation 13 and to treat the word ‘damages’ in part 44.13 as including compensation under that regulation.
“That is, no doubt, a departure from the ‘the strict and literal application of the words’. However, I do not consider that it ‘goes against the grain’ of the CPR.
“As [Ben] Williams QC, for Mr Howe, pointed out, the glossary of terms in appendix E to the CPR itself describes ‘damages’ as a ‘sum of money awarded by the court as compensation to the claimant’.
“Nor does this interpretation run counter to the underlying thrust of either the CPR or QOCS. As the judge himself said, Mr Howe is within the rationale which inspired QOCS.”
Stewart J’s conclusion was underlined by regulation 16, which provides that “any sum due and owing pursuant to these regulations shall be recoverable as a civil debt”.
Lewison J found there was not a sum “due and owing”.
“One of the characteristics of a debt is that its amount is ascertained at the time when proceedings are begun. It is only when the amount of a debt has been ascertained that it can be said to be ‘due and owing’.
“I do not consider that by regulation 16 Parliament can be taken to have altered one fundamental characteristic of a debt by a side wind. In my judgment, regulation 16 would apply to Mr Howe’s claim once the amount of his compensation had been assessed…
“I do not, therefore, consider that regulation 16 undermines the interpretation of CPR part 44.13 that I prefer.”
Mr Howe’s solicitors, City firm Fieldfisher, said the ruling made sure that QOCS applied where an injured party has the right to pursue a right of compensation against a body, such as an insurer or a tour operator, rather than the actual wrongdoer.
“Claims under the Package Holiday Regulations and direct claims against motor insurers (as well as claims against the MIB) will now benefit from QOCS protection.
“We understand that there are many cases in courts around the country which are stayed pending the outcome of Mr Howe’s appeal as to the correct interpretation of a claim for personal injury to trigger QOCS protection.”
Fieldfisher added that the claim for compensation for Mr Howe’s injuries was ongoing.