29 June 2022

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Legally aided claimants are eligible for QOCS protection, Senior Costs Judge rules

Andrew Gordon-Saker also holds that order for interim damages is not an order for damages for the purposes of CPR 44.14

Qualified one-way costs shifting (QOCS) protection is available to legally aided claimants, the Senior Costs Judge (SCJ) ruled this week.

Andrew Gordon-Saker also held that an order for interim damages was not an ‘order for damages and interest’ for the purposes of QOCS.

Macaulay v Karim & Anor [2022] EWHC 1270 (SCCO) concerned a legally aided clinical negligence claim which, following a split trial on liability, succeeded against the second defendant but not the first. The trial judge in 2017 noted that the causation issues raised by the first defendant had "dominated much of the trial, but… did not ultimately prevail".

He held there was no alternative other than to order the claimant to pay the first defendant's costs limited to the issue of breach of duty, but not the causation argument, "to be paid on the usual basis associated with a legally aided claimant". These were to be paid from any damages awarded to the claimant at the conclusion of his action against the second defendant but were not to be enforced without permission of the court.

The judge ordered the second defendant to make an interim costs payment of £450,000 and interim damages payment of £250,000, as well as a legal aid assessment of the claimant's own costs.

The claim against the second defendant settled last year by way of a Tomlin order and in the latest hearing various preliminary issues were before the SCJ, particularly that of whether QOCS applied to a legally aided claimant.

The first defendant argued that it was “improbable” that the intention was for claimants to have both legal aid (under section 11 of the Access to Justice Act 1999) and QOCS protection. His counsel suggested that nowhere in the Jackson report was it suggested that QOCS should be substituted for legal aid costs protection. Rather, QOCS was designed to provide protection for claimants following the reforms which removed recoverability.

The SCJ said the difficulty with this argument was that “there is nothing in the rules by which QOCS was introduced to indicate that it does not apply to claimants who are legally aided. That may be by design or by accident, but there is nothing to suggest that it was intended not to apply”.

Had this been the intention, the specific QOCS exception in rule 44.17 for cases begun before 1 April 2013 “would have been the obvious place to put it”.

“QOCS applies to proceedings which include a claim for damages for personal injuries (CPR 44.13(1)), the claimant falls within the definition of those to whom QOCS applies (CPR 44.13(2)) and there is nothing in the rules to exclude him because he was legally aided. Accordingly, in my judgment, CPR 44.14 applies to the claimant in this case.”

That rule provides that orders for costs made against a claimant may be enforced without the permission of the court to the extent that the amount does not exceed their damages.

The SCJ said: “It seems to me that there is no difficulty in the approach to be taken in the case of a legally aided party who is also entitled to QOCS, because legal aid costs protection relates to the amount to be paid and QOCS relates to enforcement. The applicability of QOCS is not a bar to a determination under s.11 of the 1999 Act (or s.26 of the 2012 Act), although, in practice, if QOCS does apply, there may be little reason for the receiving party to make a request for a determination.”

The judge was then asked whether the damages paid pursuant to the Tomlin order were "damages awarded to the claimant at the conclusion of his action" within the meaning of 2017 order. Following Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654, he said an agreement to pay a sum under a schedule to a Tomlin order is not an order for damages and interest. As a result, the sum paid by the second defendant would not enable the first defendant to enforce his costs order.

The final issue was whether the order for interim damages was an order for damages for the purposes of CPR 44.14. The SCJ said that, given the claimant may ultimately have to repay some of an interim award following trial, “it cannot have been intended that a defendant could enforce an order for costs against the full amount of the interim payment, including the overpayment”.

“Yet that would be a consequence of the wide definition that the first defendant seeks to place on ‘orders for damages’. However, it is not necessary to look for practical difficulties in that interpretation. The plain words used, ‘orders for damages and interest’, would not include an order for a payment of a sum on account of damages.”

The SCJ concluded that the court would proceed on the basis that the claimant was entitled to QOCS and that no order for damages or interest had been made against which the first defendant could enforce its costs order.

Shaman Kapoor (instructed by Russell Cooke) for the claimant. Murray Heining (instructed by Gordons Partnership) for the first defendant.