The Mysterious World of QOCS - Qualified One-Way Costs Shifting
A question often ask of us is exactly what are QOCS and how are they applied. It is a subject often considered but rarely understood, but at the same time important.
The rule in respect of QOCS can be found under CPR 44 PART 44 - GENERAL RULES ABOUT COSTS (justice.gov.uk).
CPR 44.13(1) confirms that QOCS apply to proceedings which include a claim for damages:
(a) For personal injuries;
(b) Under the Fatal Accidents Act 1976; or,
(C) Which arises out of death or personal injury and survives for the benefit of an estate by
virtue of section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1934.
However, QOCS do not apply to applications pursuant to section 33 of the Senior Courts Act 1981 or section 52 of the County Courts Act 1984 or where rule 44.17 applies (proceedings where the Claimant has entered into a pre-commencement funding arrangement, we will discuss pre-commencement funding arrangements in a separate blog.
So what effect do QOCS have:
In essence CPR 44.14(1) confirms that whilst an order for costs can be made against a Claimant and can still be enforced, the value of such costs cannot exceed the value of the damages awarded, in other words the Claimant will never pay in costs more than they have received in damages, so the Claimant will never be out of pocket.
44.14(2) confirms that Orders for costs can only be enforced after the proceedings have been concluded and costs have been assessed or agreed.
44.14(3) confirms that such orders shall not be treated as an unsatisfied or outstanding Judgment for the purposes of the Court record.
Lord Jackson when implementing these rules in 2013 had intended QOCS to take the place of Legal Aid for those who could not be funded as such and affords the Claimant a similar level of protection as Legal Aid, allowing Claimant’s to bring claims without the fear of hefty and impossible legal fees.
Beware, QOCS are not an outright coverall, there are exceptions, and these come in two forms:
Permission not required (CPR 44.15):
Permission is not required to enforce the full extent of a costs order against the Claimant where proceedings have been struck out on the grounds that:
(a) The Claimant has disclosed no reasonable grounds for bringing the proceedings;
(b) The proceedings are an abuse of the court’s process; or,
(c) The conduct of the Claimant or a person acting on the Claimant’s behalf with the Claimant’s knowledge is likely to obstruct the just disposal of the proceedings.
Therefore, the Claimant will no longer have the protection of QOCS.
Permission required (CPR 44.16):
Orders for costs against the Claimant may be enforced to the full extent with the permission of the court where the claim is found on the balance of probabilities to be fundamentally dishonest.
In our experience the most common argument is under CPR 44.16, Fundamental Dishonesty as the provisions under 44.15 can be difficult to prove.
In all it is important that your client is properly advised in respect of QOCS outlining the above as a warning to them that they will be exposed to substantial costs should they fall into one of the exceptions.
For more information about QOCS or costs in general, please do not hesitate to contact us!
