Dividing lines. When the intention of a claim is clear, QOCS and Judicial process
Introduction
Costs recoverability and QOCS continues to be interesting area. One moment the ground is stable, the next it seems to begin to tilt, often due to a completely unforeseen factual development.
As a result, it was some interest that I read the decision of Mr Justice Borne in Pathan v Commissioner of Police of the Metropolis [2022] EWHC 3244 (KB).
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The facts of Pathan
In a nutshell, the Appellant was arrested in December 2017 and was released with no further action being taken. In of May 2019 she presented a claim for unlawful arrest and detention, arguing that she had suffered high blood pressure and felt faint while in detention. She claimed that she had suffered loss and damage as a result. The interesting point here was that the Appellant did not state that she was making a claim for personal injury.
A defence was served in June 2019 denying that the police had acted unlawfully and alleging that the claim form did not comply with the rules for personal injury claims, in particular because it did not give details of any injury or annexed a medical report.
Jumping forward nearly a year, the Appellant in August 2020 applied unsuccessfully to amend her claim to seek damages for personal injury. Later, in January 2021, the Court granted permission for her to amend her particulars of claim to introduce a personal injury claim.
The matter went to trial, where it appears the Appellant was not successful, the judge ruling that the arrest and detention were lawful. He decided that costs would follow the event, namely that the Appellant would be ordered to pay the Defendant's costs, subject to the effect of QOCS.
So basically, as the Appellant recovered no damages, there could not be a directly enforceable costs order against her (as per part 44.15 CPR)
It was decided that protection under the qualified one-way costs shifting regime applied to the period before the claim was amended to include an action for personal injury. The meaning of?part 44.13 (1) CPR?was clear.
It was also identified that the QOCS regime (which included certain layers of judicial discretion), applied if proceedings included a personal injury claim and did not apply if proceedings did not.
Where was the dividing line?
A nuance of the decision was that the judge held that the QOCS protection could not apply before January 2021 because until that date, the case was a loss of liberty case and not a personal injury case. He therefore held that the Appellant should pay the Respondent's costs of the action up until January 2021 on the standard basis and for the whole of the action, but as from January 2021, it should be applied as subject to QOCS.
So far, this seems to make sense, but, at its core the Appellant argued that this claim was always one of personal injury, and submitted that the judge erred because the wording of?part 44.13 CPR?and?part 44.14 CPR?made clear that if there was a personal injury claim, QOCS applied to the entire proceedings.
The Appellant submitted that although part 44.16 (2) (b) CPR created a discretion to permit enforcement, it did not mean that QOCS protection could not apply to costs incurred during a period before a personal injury claim was added by amendment.
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The appeal
Interestingly, and in my opinion quite helpfully the Appeal was allowed on reasons that clarify the position of the law in similar situations. The Court came to the careful conclusion that when analysed, the judge below had not;
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In Mr Justice Bourne’s analysis, the meaning of?part 44. 13 (1) CPR?was clear and he sets out at paragraph 27 of the judgment that;
“the learned Judge did rule that the QOCS regime was inapplicable to the period before the amendment… the words "QOCS protection cannot apply" are more consistent with that meaning, and the Judge's rejection of the "submission that this is a retrospective application" can only mean that, in the view of the Judge, the amendment did not have the effect of applying QOCS to the whole of the claim.
Moreover, the reason given in paragraph 88 for the judge's order is that the claim at the relevant time "was not a personal injury case". The judge did not say that the case fell within part 44.16 (2) (b) CPR because it was a mixed claim and that he therefore had a discretion to permit enforcement, or give any reason for his exercise of the discretion other than the lack of a personal injury claim at the relevant time”.
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On considering the ratio of Achille v Lawn Tennis Association Services Ltd [2022] EWCA Civ 1407 the Court was able to distinguish it, and continued at paragraphs 29 – 31 of the judgment that analysing the issues and how QOCS applied to them;
“this was not a case of an amendment having retrospective effect. Instead, a choice had been made by the drafters of the CPR about when the enforcement position was automatic and when it was discretionary. Whilst the danger of encouraging spurious personal injury claims had been recognised in case law, the solution was identified as the exercise by judges of the discretion conferred by part 44.16 (2)(b) CPR in mixed claims. The solution was not a reading of part 44.14 and 14 CPR?which excluded a period of time before a personal injury claim was added by amendment (Siddiqui v University of Oxford [2018] EWHC 536 (QB), and Brown v Commissioner of Police of the Metropolis [2019] EWCA Civ 1724 considered).
…it was impossible to conclude that an order permitting enforcement of the pre-amendment costs was necessarily the just outcome. It was for the judge to consider what order was just, having regard to the application of QOCS and therefore to the fact that non-enforcement was the starting point. He had not done so. The judge would then have had to consider the nature of the mixed claim, including what was known, and what could reasonably be inferred, about the reason why the proceedings did not initially include a personal injury claim”.
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The core of the matter
The nucleus of the judgment at paragraph 38 is powerful. It concludes that;
“In my judgment, it is impossible to conclude that an order permitting enforcement of the pre-amendment costs was necessarily the just outcome. It was for the judge to consider what order was just, having regard to the application of QOCS and therefore to the fact that non-enforcement was the starting point, and I have held that he did not do so. … At one end of the spectrum is the case where a spurious personal injury claim is "tacked on", but (given the facts as summarised above) I see no basis for concluding that this was such a case. At the other end might be a case where all claims, personal injury and otherwise, arose from the same incident (as in this case) and where a personal injury claim initially was not advanced because of a lack of professional advice (which may or may not have been the case here). Even if the judge was minded to permit some enforcement, he would have had to consider what order would be just for the period between 13 August 2020 (when permission to add a personal injury claim was first sought, albeit without evidence from a psychiatrist) and 22 January 2021 when permission was granted.”
The matter was therefore remitted to the County Court.
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Conclusion
Pathan is an important reminder not only of how a Court can should approach the issue of the applicability of QOCS in personal injury claims but also when they should be seen as applicable. It is also helpful for Defendants who need to be bale to make commercial decisions as to how a claims should be dealt with, but also for Claimants to know what their exposure to costs is.
One issue I do have with the decision is that there in the judgment, there is no clear answer as to how the Appellants failure to comply with part 16.4 CPR and PD 16.4 CPR (the same setting out the requirements for a personal injury claim) should be addressed and balanced against the benefit of part 44.14 CPR.
It’s an interesting decision, and one that I for one expect will have more than a small impact in claims going forward in 2023, and beyond.