Claimant and counterclaiming defendant “cannot both be protected by QOCS”

Cyclists: Claim arose after head-on collision

A cyclist defendant who counterclaimed against another cyclist after a head-on collision was not protected by qualified one-way costs shifting (QOCS) in the main action, a judge has ruled.

Her Honour Judge Venn said Mark McDonnell was protected by QOCS only in his counterclaim, where he was an unsuccessful claimant.

The decision contradicts that of another circuit judge in September, with a barrister involved in the latest case saying a higher court should settle the issue.

HHJ Venn said that if the defendant was given the benefit of QOCS in both his unsuccessful defence of the main claim and his counterclaim, it would have “unjust and inconsistent” consequences.

She said if this was the case, insurers of defendants to claims for personal injury arising out of RTAs would be “incentivised to encourage counterclaims” since, even if the claim was unsuccessful, there would be no liability for costs.

Other personal injury claimants would be worse off than those claiming damages following RTA collisions, as it was “difficult to think of counterclaims” following accidents at work, clinical negligence or public liability.

HHJ Venn said access to justice would be reduced as 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”.

She said the part 36 regime “would have no teeth” and liability insurers would avoid not only having to pay after-the-event premiums and success fees, but “having to pay any costs to a successful claimant at all”.

The judge added: “If such radical changes were intended, one would expect them to have been spelt out.”

Brighton County Court heard in Waring v McDonnell [2018] EW Misc B11 (CC) that Andrew Waring collided head-on with Mr McDonnell in Keymer, West Sussex. Both men were injured. HHJ Venn gave judgment for the claimant in September 2018 and dismissed the defendant’s counterclaim.

The defendant argued he was protected by QOCS and “any order for costs made against him” could not be enforced.

However HHJ Venn said: “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.”

HHJ Venn said she did not agree with the conclusions of His Honour Judge Freedman, who held in Ketchion v McEwan in September that the proper interpretation of CPR 44.13 included both the claim and the counterclaim.

She said: “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…

“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.”

She concluded: “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.”

Kevin Latham, the barrister at Kings Chambers in Newcastle, instructed to act for the claimant by Aidan Jones of Alyson France & Co Solicitors, said: “Whilst the defendant did not apply for permission to appeal in Waring, this is an important decision on the applicability of the QOCS regime which seems destined to be determined at a higher, authoritative level in the near future, given the existence of two entirely contradictory non-binding decisions.”

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