Since the introduction of Qualified One Way Costs Shifting in April 2013, some claimants’ solicitors have been more willing to pursue low value claims with limited prospects of success on the basis that they will not be exposed to the defendant’s costs, even if the defence is successful. As a result, formulating cost effective tactics and strategies can be difficult, especially if it is unclear whether QOCS applies or not.
Sean Riley discusses recent Langleys’ successes which demonstrate how a proactive approach can successfully manage these claims and provide some much needed guidance on the application of QOCS.
1) Peter Gumsley v Doncaster Metropolitan Borough Council
This was a personal injury claim which Langleys successfully defended at trial.
Mr Gumsley had originally been represented by solicitors acting under a pre-1 April 2013 CFA although they ceased to act. The claimant then issued proceedings as a litigant in person before entering into a fresh CFA (post April 2013) with a new firm. When the issue of costs arose at conclusion, the claimant argued that QOCS should apply as his original CFA did not have both a success fee and an insurance policy and, in any event, his CFA had been terminated. As a result, the claimant believed he did not have a “pre-commencement funding arrangement” as defined in CPR part 48.2.
The court was not persuaded and found that the rules did not require both a CFA and an insurance policy; either would suffice. The court also found that termination of the original CFA was irrelevant and confirmed that the rules merely require a claimant to have entered into a funding arrangement, not that it continued to a particular point. QOCS did not therefore apply.
2) David Skidmore v North East Convenience Stores Limited
The court’s approach in Gumsley was followed in another Langleys’ success.
The claim involved a trip over a pothole on land owned by the defendant. However, the land was presumed to be dedicated as a public highway pursuant to s. 31 of the Highways Act 1980and, in light of McGeown v Northern Ireland Housing Executive , the defendant owed the claimant no duty in respect of negligent nonfeasance.
The claimant’s original solicitors sent a letter of claim (pre-1 April 2013) advising that the case was pursued under a CFA with ATE insurance. The claimant later instructed a new firm who entered into a fresh CFA after 1 April 2013 and then issued proceedings without ATE insurance.
Langleys had successfully defended an earlier claim relating to the same piece of land and, after drawing this to the claimant’s attention (and providing evidence in support of the McGeown defence), the claimant was invited to discontinue proceedings. Believing he had the protection of QOCS, the claimant was content to proceed.
Given the potential costs of proceeding to trial, Langleys made an application for the claim to be summarily dismissed on the basis that a McGeown defence had been established and the claimant did not have reasonable prospects of succeeding with the claim. The court agreed and dismissed the claim before considering costs.
As in Gumsley, the court found that QOCS did not apply if there was a CFA or ATE insurance in place before 1 April 2013. The court accepted the letter of claim as evidence that the claimant had entered into a qualifying CFA and the defendant was awarded its costs of the action in full.
These recent decisions highlight the importance of considering when the claimant first entered into a funding arrangement to clarify the QOCS position, especially if another firm has been involved previously.
The decision in Skidmore also demonstrates that the court is willing to summarily dismiss claims where defendants have evidence of a strong technical defence (such as a “McGeown”). This tool may prove to be valuable in potentially expensive QOCS cases although, given the risk of an adverse cost order, careful consideration must be given to each case on its own merits. Langleys are happy to advise on a case by case basis.