Page 13 - PIC Magazine Autumn Issue 16

QOCS
he recent authority of Siu Lai Ho v Seyi Adelekun [2020] EWCA Civ 517 (“Ho”) was a seismic tremor; in the costs’ world, it’s about as exciting as it gets. The Court of Appeal ruled that the decision in Howe v Motor Insurers’ Bureau (Costs) [2017] 7 WLUK 84 (“Howe”) remained binding but expressed significant reservations as to whether it should ‘bite’ in QOCS cases.
The judgment in Ho was handed down on 9th April 2020. The Court was asked to adjudicate upon the parties’ costs’ liability following settlement. The appellant asked to set off her entitlement to costs from the respondent, against her liability for the respondent’s costs of the claim. The respondent contended that there was no jurisdiction to set off those costs, alternatively that it was inappropriate to do so.
Of course, CPR 44.12 permits such a set off, but the respondent contended that it did not apply because the case fell within the QOCS regime. The responded argued that costs’ liabilities could not be set off against each other, contrary to the decision in Howe, submitting that Howe had been decided per incuriam.
Lord Justice Newey, giving the lead judgment, stated that he had been persuaded that “with the benefit of fuller argument perhaps, the Court might have arrived at a different conclusion in Howe” (paragraph 24 of the judgment), but that the Court was bound by the decision and had to proceed on the basis that it had jurisdiction to direct costs’ set off (paragraph 32). He rejected the suggestion (as did the other two Judges) that Howe had been decided per incuriam.
The Court of Appeal then went on to consider whether this discretionary power of set off should be exercised, and concluded that it should, reasoning: (a) it was
“to be assumed that those responsible for the QOCS regime intended the Court to be able to order costs’ set off regardless of whether the claim was unfounded or the claimant had misconducted himself in some way”, (b) there was “no evidence of anything specific to the respondent’s circumstances which could render costs set off unjust” and (c) the appellant had “incurred substantial costs in vindicating her rights” and “would be left with a large shortfall even with the benefit of costs’ set off” (all from paragraph 27).
Richard Adams is a Barrister at No5 Chambers specialising in Clinical Negligence and Personal Injury Claims. Here he talks about setting off costs in QOCS cases.
Permission has been granted to appeal the
decision to the Supreme Court, and it will be interesting to see how the Supreme Court wrestles with
Howe.
That Lord Justice Newey was perhaps dissatisfied with the conclusion that he had reached in light of the decision in Howe was shown by his concluding paragraph (paragraph 33): “I would add finally that the Civil Procedure Rules Committee may wish to consider whether costs set-off should be possible in QOCS case.”
Lord Justice Males, in supporting Lord Justice Newey’s judgment, stated that “all this adds up to a powerful case, in my judgment, for calling into question the decision in Howe v Motor Insurers Bureau (No.2), albeit that it is binding upon this court” (paragraph 43). He echoed Lord Justice Newey’s suggestion that the Rules’ Committee should consider the issue.
Permission has been granted to appeal the decision to the Supreme Court, and it will be interesting to see how the Supreme Court wrestles with Howe.
Whilst it would be foolish to predict how the Supreme Court will decide this issue, it is respectfully submitted that the decision in Howe is wrong. QOCS is obviously a self-contained code, in the same way as CPR 36. It is equally obvious that setting off costs against costs is an enforcement; one party is making sure that it gets its costs from the other. If that’s not enforcing that party’s rights to its costs, then what is? So, if setting off costs against costs is enforcement, then there is no provision within the QOCS rules for this to be done, as CPR 44.14 only permits costs to be set off against damages and interest. So who is going to act first? The Supreme Court, or the Rules’ Committee?
A kind of answer was given on 15th May 2020, at the annual meeting of the CPR Committee. The CPRC’s lacuna sub- committee – great name – has resolved to review CPR 44.14 at the same time as awaiting the Supreme Court’s determination of the appeal.
To view Richard Adams’ profile visit
visit: https://www.no5.com/people/ barristers/richard-adams/
www.pic.legal
Autumn 2020
PARTNERS IN COSTS
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