There has been speculation around a potential avalanche of litigation because of upcoming changes to the Civil Procedural Rules.
Qualified one-way cost shifting (QOCS) limits the liability of a claimant for the defendant’s costs in personal injury and related claims. The protection offered under QOCS has enabled claimants to settle cases in a myriad of ways before trial as it has forced defendants to carefully consider the extent of costs accrued defending a case.
The current position for claimant practitioners is that defendants are not able to offset their costs against both the claimant’s damages and costs (Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654; [2018] 1 WLR 6137 and Ho v Adelekun [2021] UKSC 43; [2021] 1 WLR 5132).
However, on 2 February The Civil Procedure Amendment Rules 2023 were laid before Parliament. One of the notable changes were those to CPR 44.14, where a deemed order can be enforced and offset against an aggregate of damages, interest and costs (where it was previously limited to the total damages awarded to the claimant alone). Essentially, this creates a larger pot of money from which the defendant will be able to enforce their costs entitlement.
In order to take advantage of the current, more favourable position solicitors may look to issue cases prior to the implementation date of 6 April, although this might prove limited as claimants cannot artificially alter the position of a case. Put simply, applications made prematurely solely to take advantage of the existing rules would likely result in such actions being brought to the attention of the courts by the defendants.
Claimant representatives should however keep an eye on the likely impact on legal cover and the effects that come from this. Current insurance policies appear equipped to cover claimants against such adverse costs. However, the higher risk could result in increased premiums, in turn adding to the overheads of firms running cases on a no-win, no-fee basis. This in turn could impact access to justice, especially if it creates a more risk-adverse approach to accepting cases.
What may seem like a technical matter may therefore have more of an effect on consumers in civil justice than many realise.