Who ever said that following the Jackson reforms and the implementation of QOCS, there would be a never ending stream of satellite litigation to challenge the implementation and effect of these new rules.
Well they were right of course with litigation continuing, in particular as to whether QOCS will apply in claims against multiple Defendants, where a successful recovery has not been achieved against all Defendants, but has been successful against one or more Defendants.
Back in August 2017 HHJ Freedman sitting in the County Court at Newcastle, had to consider this issue in the case of Bowman v Norfran Aluminium Ltd (1), R M Easedale and Co Limited (2), Norfran Ltd (3).
Here, the Claimant suffered an industrial injury and issued proceedings against three Defendants.
The second Defendant denied having employed the Claimant and the Claimant discontinued the claim against them. At trial Claimant successfully recovered £20,000 in damages against the first and third Defendants.
The 2nd Defendant sought an Order for the Claimant to pay the 2nd Defendant’s costs following discontinuance pursuant to CPR 38.6, arguing that proceedings meant the entirety of the claim, encompassing the claim against all three Defendants. Therefore, the 2nd Defendant could set off its costs against any order for damages made in favour of the Claimant to be paid by the remaining Defendants.
HHJ Freedman found the usual Order in the event of discontinuance applied, and under CPR 38.6 the 2nd Defendants costs were to be paid by the Claimant. However, in finding for the Claimant, the Judge stated that:
“the whole idea of a set-off, in the context of liability for costs, is that a claimant should not be required to pay anything but rather the defendant pays less or nothing at all. That being the position, it is difficult to see how such would be consistent with the claimant in the instant case handing over all of her damages to the second defendant to meet any order for costs. In short, it would not be a set-off but rather the claimant would be paying money to the second defendant.”
The view taken by HHJ Freedman was that a Claimant cannot be required to pay the costs of one Defendant against whom a claim fails, from damages paid by another Defendant.
Whilst HHJ Freedman took that position as regards to the claim against the 2nd Defendant this issue is to be tested again in a case being appealed from the Regional Costs Judge S. Hale which has been leapfrogged to the Court of Appeal.
This Appeal could have far reaching consequences for claims brought against multiple Defendants, which is frequently the case in claims for occupational disease. How often does it happen that claims against some Defendants are abandoned, but are then successful against remaining Defendants?
This could have a significant effect on these claims, and future After the Event Insurance premiums.
We can only hope that the Court of Appeal reach a sensible decision and find in favour of the Claimant. It would seem a rather perverse decision and interpretation of QOCS otherwise.