MoJ launches consultations on vulnerability and QOCS as fixed costs extension looms

Government now planning for fixed costs for most cases up to £100,000 from April 2023

Consultations on ensuring appropriate provisions for vulnerable parties and witnesses, and a reconsideration of the rules on qualified one-way costs shifting (QOCS), have been issued by the Ministry of Justice (MoJ) as it prepares to extend fixed recoverable costs (FRCs).

It said it was aiming to secure Civil Procedure Rule Committee agreement on the new rules by the end of 2022 so that FRCs across the fast-track and in most money cases worth up to £100,000 can be introduced in April 2023.

The MoJ had previously indicated that it was looking at October this year for implementation.

It said it has been working with the committee on the draft rules “to ensure the smooth delivery of these reforms”, during which the issues of vulnerability and QOCS emerged.

Officials said they were “keen to ensure that those who are vulnerable (either as parties or witnesses) are not disadvantaged in bringing or defending claims which are within the scope of FRC”.

It has proposed leaving it to the judge to determine whether or not the vulnerability gave rise to sufficient extra work to justify, exceptionally, an additional amount of costs – this would be retrospective, rather than prospective, and on the basis that the vulnerability caused at least 20% of additional costs. There would be no upper limit.

The consultation on QOCS followed the Supreme Court’s 2021 judgment in Ho v Adelekun and the question of whether costs set-off should be possible in a QOCS case. The Supreme Court found that the CPR restricted a defendant’s ability to offset costs awarded to the defendant against only the damages awarded to the claimant.

This had a knock-on effect to the earlier Court of Appeal decision in Cartwright v Venduct, which said accepting a part 36 offer did not create an enforceable order for the purposes of QOCS. The MoJ said that decision was “manageable in practice” because – until Ho came along – parties could then agree an offset against costs.

“Thus, the combined outcome of both of these cases is to undermine the effectiveness of QOCS and part 36 in resolving disputes,” the consultation paper said.

To deal with this, the MoJ has proposed amending section II of CPR 44 so that a claimant’s entitlement to costs was considered to be part of the overall fund against which set-off could be applied; and extend costs orders to deemed orders, so a defendant could enforce a deemed order for costs (especially following acceptance of a part 36 offer) without the permission of the court.

The consultations can be found here. They are open until 20 June.