One Way or Another…Qualified One-way Cost Shifting

Qualified One-way Costs Shifting or QOCS would be the method used to apportion the costs of civil litigation initially in Personal Injury Claims.

Currently two way costs shifting rules are in application, the introduction of QOCS would result in the Defendant being liable to pay the Claimants costs even if the Claimant loses; and in addition to their own costs. The Claimant would only pay the Defendants costs should the court impose a discretionary Costs Order against them. Discretionary orders will be available in certain circumstances when the Claimants conduct will be considered at the conclusion of proceedings. The issue of offers made under CPR Part 36 must be one such circumstance under review.

In essence the court would have jurisdiction to award costs based on the conduct of the parties, conduct encapsulates simply whether or not there have been reasonable attempts to settle the proceedings. Jackson says implementation of QOCS would be ‘cheaper’ for the Defendants than the rule as it currently stands and it would reduce the risk on Claimants.

Jackson also recommends success fees and ATE Premiums are no longer recoverable and must be a cost born by the claimant. In practical terms the Claimant would no longer necessarily need to purchase ATE products in conditional fee cases resulting in a substantial Defendant cost saving. Instead premiums will be deducted from damages payable if they are utilised. In relation to the success fee this would also be payable by the Claimant from any award of damages made.

The a foregoing certainly addresses long standing Judicial concern about Civil Litigation costs being excessive and disproportionate. The Law Society has voiced concern over further eroding access to justice; increased business operating costs and resulting in a de facto windfall for insurers.

Many Claimants will stand to lose a substantial portion of their damages. Lawyers will think twice about taking on high risk/lower value claims unless the means justify the rewards. The net result being Litigation moves inexorably closer to a contingent fee based system all the signs point in this direction.

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