Qualified One Way Costs Shifting, known to its friends as QOCS, was introduced in 2013. The idea was to secure access to justice by limiting the circumstances in which a losing claimant could be required to pay the costs of the other side. In fact, there have been numerous problems with the scheme which has produced a series of court decisions.

The most recent is Faulkner v Secretary of State for Business, Energy and Industrial Strategy [2020] EWHC 296 (QB) which concerns the Defendants’ right to set off a liability for costs against costs otherwise protected by QOCS. The original claim for brought by a former coal miner for a work-related health issue. As that matter approached trial, the claimant’s solicitors filed a notice of discontinuance, presumably in the light of unsupportive evidence. The Defendants then applied to set the notice aside and to have QOCS disapplied. That application failed and the Defendants were ordered to pay the costs of £7000.

They then applied to have those costs set off against costs ordered in their favour at an earlier hearing – about £3500. This then led to a further consideration as to whether the set off could apply to all the costs to which the Defendants would have been entitled, which would eliminate the whole £7000 liability.

Mr Justice Turner held that he was bound by the Court of Appeal decision in Howe v Motor Insurers’ Bureau (2017) WL 05659795 and that the Defendants were entitled to seek to set off the costs liability against all of the costs.

This was subject to the court’s discretion. On the fact of this case the judge refused to exercise that discretion in favour of the Defendants. The reason for this was that, otherwise, the Claimants would be worse off than they would have been if the unsuccessful application had not been made by their opponents.

“But for the defendant’s application, the position would have been simple. The claim had been discontinued, the defendant’s ability to enforce the deemed costs order in its favour by virtue of CPR 38.6 would have been effectively nil.”

The issues are discussed in detail in the blog of Gordon Exall who appeared for the claimants –

THE SET OFF OF COSTS AND QOCS: A HIGH COURT DECISION: THE COURT HAS A DISCRETION TO SET OFF COSTS – BUT ON THE FACTS OF THIS CASE WOULD NOT DO SO

We have experience in dealing with all issues arising out of the application of QOCS. Please feel free to contact us to discuss.

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