Costs News

21 January 2016
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Judge disapplies QOCS using ‘other’ exemption

A district judge in Leicester has used the provision in the CPR about a claim made for the financial benefit of someone other than the claimant to disapply qualified one-way costs-shifting (QOCS).

To date, QOCS rulings have focused on the ‘fundamentally dishonest’ rule and that was also found by District Judge Oldroyd in Blackpool, in Waggett v Witold Warchalowski & Others.

However, he had already ruled that the exception in CPR 44.16(2) applied to a counterclaim made by the defendant taxi driver in a case involving a car accident.

Mr Warchalowski, whose car was owned by Bacup Private Hire, counterclaimed against Luke Waggett and Aviva (joined as part 20 defendants) for special damages of over £22,000 – including “somewhat unusually, a claim for hire charges in respect of a credit hire”, the judge said – and for his injuries, while Bacup made a special damages claim of £1,900 for repairs.

On the day of trail, DJ Oldroyd said the case took “a somewhat unusual turn” because neither defendant turned up. Their counsel did not oppose the application to dismiss their counterclaims, which the judge then did.

He ruled that Bacup’s claim for special damages only against Aviva was not a QOCS case as there was no personal injury element. In relation to Mr Warchalowski’s claim, he was pointed to rule 44.16(2) which makes an exception to QOCS “where the proceedings include a claim which is made for the financial benefit of a person other than the claimant”. The practice direction gives examples of subrogated claims and claims for credit hire.

DJ Oldroyd said that, because the vehicle was owned by Bacup, “it is therefore curious to say the least as to why it is that the first defendant claims the costs of the credit hire in respect of a replacement vehicle for one which was originally owned by the second defendant… it does seem to me that the first defendant’s claim for credit hire is, by virtue of the terms of his agreement with the second defendant [which effectively leased the vehicle to him], a claim made by the first defendant for and on behalf of another party i.e. the second defendant.”

The only question then was the impact of Mr Warchalowski’s claim also including a personal injury element. DJ Oldroyd said: “The practice direction envisages that, where this arises, the court will normally order the claimant to pay costs notwithstanding that they exceed the level of damages and interest awarded, i.e. will allow enforcement. It goes on to consider the position, where the personal injury claim is only a modest part of the total claim and the additional claim is the dominant one.

“There is little doubt to me (sic), based on the medical evidence that I have seen, that the first defendant’s personal injury claim is worth no more than £2,000 to £2,500. On that basis, it is clearly dwarfed by the claim for credit hire. In those circumstances, I agree entirely with the submissions made to me by [Nicholas Robinson of Ropewalk Chambers, for the claimant] that this is a case in which it would be appropriate to make an exception to QOCS in respect of the claim by the first defendant as well as the claim by the second defendant.”

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