Unanimously allowing the appeal in Ho v Adelekun [2021] UKSC 43, the court clarified the extent of Qualified One-way Costs Shifting (QOCS)―a mechanism for addressing the inequality of arms in most personal injury cases. The case originally involved a road traffic accident, and spiralled into a dispute about set-off of opposing costs orders. The judgment confirmed that Part 44 of the Civil Procedure Rules (CPR) dealing with QOCS do not prevent set-off of opposing costs orders but do impose a monetary cap if defendant costs exceed the claimant’s damages and interest (unless there was fundamental dishonesty).
Acknowledging that QOCS could lead to unfairness, Lady Rose and Lord Briggs said, in their judgment: ‘No one has claimed that the QOCS scheme is perfect.’
The QOCS rules were initially proposed by Sir Rupert Jackson in his civil costs review in 2009, and came into force in 2013.
However, Matthew Hoe, partner at Taylor Rose MW, who acted for the defendant, said the decision contained ‘two particularly alarming things for personal injury defendants, insurers and compensators’.
‘The first is the approach to the construction of the CPR,’ he said.
‘The second is the likely effect on litigation and the costs of defending claims. The decision means, essentially, unless there is an order for damages or a finding of fundamental dishonesty, a claimant will not have to pay a successful defendant’s costs.’
Hoe, a Forum of Insurance Lawyers committee member, said: ‘Reaching the decision by focusing only on the words of the QOCS rules and not wider usages in the CPR will make the outcome of future cases about the CPR harder to predict.
‘Concerningly, it paves the way for claimants pursuing bad points―as the claimant had originally done in Adelekun―forcing defendants to incur costs the claimant will not have to pay, perhaps thereby applying improper pressure to settle. An urgent review of the QOCS rules by the Civil Procedure Rule Committee is required to ensure the intended checks and balances operate.’
