A claimant who failed to beat a part 36 offer has seen his entire damages award and costs entitlement wiped out after it was set off against the defendant’s costs award, while a non-party costs order was made against a credit hire company for the balance.
According to a briefing issued last week by defendant insurance law firm Keoghs, the unnamed £25,300 claim arose from a road traffic accident. After the hire agreement was deemed unenforceable for various reasons at trial, the claimant was awarded £2,750 in general damages. This meant he failed to beat the defendant’s part 36 offer and so lost the protection of qualified one-way costs shifting (QOCS).
The claim was subject to the fixed recoverable costs regime and the claimant was awarded costs of £3,952 to the date of expiry of the part 36 offer, plus £300 from a costs order made earlier in the litigation. The defendant was awarded costs of £5,782 from the date of expiry, plus a further £4,252 from another costs order made earlier.
Pursuant to CPR 44.12, the claimant’s entire costs entitlement was set off against the defendant’s, leaving £6,020 outstanding for the defendant. The court further ordered that, pursuant to CPR 44.14(1), the defendant could enforce a further £2,750 of those costs against the full extent of the claimant’s damages.
With £3,270 still outstanding, the court decided that it was unjust to further penalise the claimant for bringing the credit hire claim as this was “undoubtedly foisted upon him”. Instead, it ordered that the defendant should be at liberty to make an application that the money should be paid by the credit hire organisation by virtue of CPR 44.16(3) and 46.2.
The briefing concluded: “This shows that, with a well co-ordinated and thorough approach, both to the issues within substantive litigation and to the issues then to be addressed when costs fall to be determined, it is possible to overcome some of the disadvantages that QOCS presents to paying parties. It also provides some clarity around the issue of set-off where QOCS has been dis-applied, as the rules are not entirely clear around what is and is not within a paying party’s remit in this regard.
“We often find that district judges are not sufficiently well versed in the application of either fixed costs or QOCS, and it is therefore pleasing to see a district judge who is both open to and conversant with these regulations and their application.”