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QOCS protection extends to appeals, CA confirms

Baker:

Qualified one-way costs shifting (QOCS) covers appeals where it applies to the first instance proceedings, the Court of Appeal has ruled.

Lord Justice Baker interpreted the word “proceedings” in rule 44.13 as including both.

“If a claimant’s access to justice is dependent on the availability of the QOCS regime, that access will be significantly reduced if he is exposed to a risk as to the costs of any unsuccessful appeal which he may bring or any successful appeal a defendant may bring against him,” Baker LJ said, giving the unanimous ruling of the court.

“It follows that, as Edis J noted [in Parker v Butler [2016] EWHC 1251 (QB)], to construe the word ‘proceedings’ as excluding an appeal would do nothing to serve the purpose of the QOCS regime.”

He said this interpretation applied even where, as here, the court was dealing with a second appeal, the appeal was brought by the defendant to the original claim, and the court has declined to exercise its discretionary powers to limit recoverable costs under CPR 52.19.

Baker LJ only cited two other authorities – Hawksford Trustees Jersey Ltd v Stella Global UK Ltd and another [2012] EWCA Civ 987 and Wagenaar v Weekend Travel Ltd [2014] EWCA Civ 1105 – and did not read either as being in conflict with this principle.

“In each case, this court held that the word ‘proceedings’ had to be interpreted to reflect the legislative purpose. The purpose of the QOCS regime is to facilitate access to justice for those of limited means.”

Wickes Building Supplies Ltd v Blair (No.2 : Costs) [2020] EWCA Civ 17 [1] followed the court’s substantive decision in November [2] that circuit judge was wrong to find that an employer’s liability claim automatically exited the pre-action protocol because the defendant challenged the late service of evidence at the stage 3 hearing.

Liability was admitted at stage 1. But the parties could not agree a settlement, so the case moved to the stage 3 hearing.

It emerged at the hearing that a witness statement produced by the claimant had not been served as part of the court proceedings pack and had not been seen by Wickes prior to the hearing. District Judge James held that it would be wrong to permit the claimant to rely on the statement at the hearing and assessed damages at £2,000, plus costs of £1,080.

On appeal, His Honour Judge Hughes QC in Winchester set aside the order and dismissed the claim under the EL/PL protocol, leaving the claimant to start fresh proceedings under part 7. The appeal court reinstated the origional order.

In the costs decision, the Court of Appeal held that the defendant was entitled to its costs of both appeals – but could not enforce the order because of QOCS.

It ruled that rule 52.19(1) – giving an appeal court a specific discretion to make an order limiting the recoverable costs of the appeal in “any proceedings in which costs recovery is normally limited or excluded at first instance” – meant the fixed costs regime applicable to proceedings at first instance under the protocol did not apply to the costs of an appeal.

But Baker LJ said he was not persuaded to exercise the court’s discretion. The claimant/respondent’s failure to comply with the procedural requirements of the protocol had caused the appeal, leading Wickes “to incur unnecessary additional costs”.

He said: “In those circumstances, I conclude that the appellant is entitled to its costs of both appeals. I do not consider that the inequality in the parties’ financial circumstances justifies any departure from that outcome, nor do I consider that wider principles of access to justice have any relevance to the decision on this issue.”

He added: “Furthermore, this appeal raised a point of practice. Had the interpretation of Practice Direction 8B [on stage 3 proceedings] advanced on behalf of the respondent been accepted by this court, it is likely that a significant number of cases would automatically have fallen out of the protocol and claimants in those cases would have incurred additional costs. It is therefore at least arguable that this appeal comes within rule 52.19(3).”