Permission To Appeal Costs | When Hopeless Grounds And False Citations Justify A 75% Costs Award Against The Applicant

, , , ,

The High Court’s decision in Taiwo v Homelets of Bath Limited [2025] EWHC 3173 (KB) demonstrates when exceptional circumstances justify departing from the general rule that respondents do not recover costs for attending permission to appeal hearings.

Background

The claim arose from events in 2010 when the defendant, Homelets of Bath Limited, sought to evict the claimant, Wemimo Mercy Taiwo, from a property in Bath. The claimant succeeded at a liability trial in 2018, where it was found she had been harassed and assaulted [§1]. The matter proceeded to a quantum trial to assess damages, with the claimant seeking approximately £2 million for psychiatric injury, injury to feelings, and loss of earnings [§2].

At the quantum trial before HHJ Blohm KC, the defendant successfully invoked section 57 of the Criminal Justice and Courts Act 2015. The judge found the claimant had been fundamentally dishonest regarding three matters: the genuineness of her marriage, her claims for Employment Support Allowance benefits, and the deliberate exaggeration of her disability from October 2013 onwards [§3]. Consequently, the entire claim was dismissed, including the claim for Vento damages for injury to feelings, which the court confirmed fell within the definition of “personal injury” for s.57 purposes [§84-89]. The judge also determined the claimant was no longer a protected party.

At a consequentials hearing on 13 March 2025, the judge ordered the claimant to pay the defendant’s costs of the claim, to be assessed on an indemnity basis, with an interim payment of £25,000 [§4]. The appointment of Mr Emmanuel Diamond as the claimant’s litigation friend was terminated. Furthermore, Mr Diamond and Mr Abayomi Bamidele Odebode were joined to the proceedings as additional defendants for the purpose of considering non-party costs orders under section 51 of the Senior Courts Act 1981.

The claimant sought permission to appeal both the quantum trial order and the consequentials order. The original Appellant’s Notice was filed by the claimant, and Mr Diamond later filed an N161 seeking a re-hearing of the permission application [§6, §11]. Permission was refused on the papers by Sheldon J on 28 March 2025 [§10]. This judgment concerns the oral renewal of that application for permission to appeal. A separate non-party costs order was later made against Mr Diamond and Mr Odebode on 6 August 2025 [§16]. Numerous further applications were made by the claimant and Mr Diamond throughout the appeal process.

A notable feature of the proceedings was the submission of documents containing false legal authorities, including citations to non-existent cases such as “Irani v Duchy Farm Kennels [2020] EWCA Civ 405” and “Chapman v Tameside Hospital NHS Foundation Trust [2018] EWCA Civ 2085” [§25-27]. The court found these were “no doubt falsely created by AI” and rejected Mr Diamond’s explanation that he had “stepped back” from the litigation when these documents were prepared [§26].

Costs Issues Before the Court

The court was required to determine several distinct costs issues arising from the litigation history. The primary issue was whether to award the respondent its costs of attending the oral renewal of the permission to appeal hearing, which is generally not permitted under the standard rules [§141]. A related issue was the appropriate basis and percentage of any such costs award. The court also had to consider the claimant’s liability for the costs orders made at the quantum trial consequentials hearing, namely the indemnity basis costs order and the £25,000 interim payment, the stay on which was now lifted [§119-120]. Additionally, the court had to address the procedural validity and merits of the appeal against the consequentials order, which included the termination of the litigation friend and the joinder of parties for non-party costs. Finally, the court was tasked with deciding whether to impose a civil restraint order on the claimant and/or Mr Diamond due to the manner in which the litigation and appeals had been conducted [§127].

The Parties’ Positions

The respondent sought its costs of responding to the application for permission to appeal. It requested that these costs be assessed on an indemnity basis, with an interim payment of £15,000, plus a summarily assessed sum of £4,000 for dealing with the civil restraint order application [§140]. The respondent invited the court to depart from the general rule in Practice Direction 52B paragraph 8.1 that respondents are not usually awarded costs for attending permission hearings, relying on the guidance in Mount Cook Land Ltd v Westminster City Council [2004] 2 Costs LR 211 [§141-142].

The applicant objected to any costs order being made against her [§140]. While her formal position on the respondent’s application was not detailed in the judgment beyond a general objection, her conduct and submissions throughout the proceedings formed the backdrop to the court’s assessment. The applicant, through Mr Diamond, had filed multiple iterations of grounds of appeal and skeleton arguments, some of which contained bogus legal authorities [§9-10]. The court noted that Mr Diamond appeared to be advancing arguments on the joinder issue for his own benefit rather than the claimant’s [§124].

The Court’s Decision

The court refused permission to appeal against both the quantum trial order and the consequentials order, finding none of the grounds to be reasonably arguable [§108, §126]. It also refused to extend time for the appeal against the consequentials order. The stay on the costs orders from the consequentials hearing was lifted, meaning the claimant was liable for the defendant’s costs on an indemnity basis, subject to detailed assessment, and was required to make the £25,000 interim payment [§119-120].

On the costs of the permission to appeal hearing, the court departed from the general rule in PD 52B paragraph 8.1 and made an order in the respondent’s favour [§144]. Applying the guidance from Mount Cook at paragraph [76], Constable J found exceptional circumstances. These included the hopelessness of several grounds of appeal, the persistent pursuit of those grounds through numerous repetitive and undisciplined submissions, and the citation of false authorities, which the judge found had “undoubtedly added considerably to the burden on the Court and on the Respondent” [§143]. The judge noted that not all arguments were hopeless, so a full award was not appropriate. Balancing these factors, the court ordered the applicant to pay 75% of the respondent’s reasonable costs incurred from the date of Sheldon J’s paper refusal (28 March 2025), including any costs dealing with the CRO, to be assessed on the standard basis if not agreed, with an interim payment of £7,500 [§144].

The court also granted a limited civil restraint order against both the claimant and Mr Diamond [§132]. This was justified by two applications found to be totally without merit: the application struck out by Bourne J [§127] and the earlier appeal against a costs budgeting decision, which Sheldon J had found to be “misconceived and unarguable” [§130]. The judge cited the persistent and undisciplined conduct of the litigation, including the submission of an unsolicited witness statement after the draft judgment was circulated, as further demonstration of the need for restraint [§136].

The judgment also affirmed the indemnity costs order from the consequentials hearing. It found no arguable basis to appeal the indemnity basis, holding that there could be no appeal against it “in principle given the Applicant’s failure to beat a Part 36 Offer“, and confirmed that the indemnity assessment and £25,000 interim payment should now take effect [§119]. Furthermore, it found the joinder of Mr Diamond and Mr Odebode for non-party costs consideration to be not reasonably arguable as a ground of appeal, noting Mr Diamond’s deep involvement in the claim’s conduct [§122-124].

YouTube player

Indemnity Costs Awarded For Unsubstantiated Fraud Allegations In Original Pleading

Failed Fraud Allegations Justify Indemnity Costs Order Despite Proper Conduct

Non Party Costs Orders | Court Of Appeal Decision

Fundamental dishonesty found on appeal by reason of material non disclosure

Dishonest Evidence And Baseless Allegations Justify Indemnity Costs Order

Indemnity Costs And The High Risk Of Pursuing A Weak Case

Can Defendants Be Ordered To Pay Costs When Fundamental Dishonesty Allegations Fail?

, , ,

The High Court’s decision in Hakmi v East & North Hertfordshire NHS Trust [2025] EWHC 2597 (KB) establishes that defendants may be ordered to pay a percentage of a claimant’s costs arising from unsuccessful fundamental dishonesty allegations, even where the claimant has lost the underlying claim.

Background

The claim arose from clinical negligence allegations concerning the treatment of Mr Mohamed Atef Hakmi, a consultant orthopaedic surgeon, following a stroke on 16 November 2016. It was alleged that the second defendant’s stroke consultant at Norwich & Norfolk Hospital failed to offer thrombolysis, resulting in serious disability. Quantum was agreed at £1,033,824, subject to liability. [§1]

The trial, held in June 2025, focused on breach of duty and causation. The court dismissed the claim, finding that thrombolysis would probably not have altered the outcome even if offered. [§97] While the court identified certain process failures (including failure to check telemedicine equipment before the shift and failure to conduct hourly neurological checks post-admission [§65, §75]), the claim ultimately failed on causation: Mr Hakmi had made a very good, if imperfect, recovery, achieving a Modified Rankin Scale score of 2, which falls within the range of a good outcome whether or not thrombolysis had been administered. [§95-97]

During the proceedings, the defendants raised an allegation of fundamental dishonesty against Mr Hakmi under section 57 of the Criminal Justice and Courts Act 2015, contending that he had deliberately underperformed in neuropsychological and other assessments conducted by their experts (Dr Bach, Dr Hassan, and Dr Santullo) to advance his claim. [§98] This allegation was raised formally in the defendants’ counter-schedule dated 18 March 2025 and was maintained throughout the trial. [§134-135] The allegation was ultimately rejected by the court, which found that Mr Hakmi’s poor performance in testing could be explained by his psychological condition, fatigue from serious familial issues, and the organic effects of his stroke rather than deliberate malingering. [§126-129]

Costs Issues Before the Court

Following the dismissal of the claim, the court was required to determine the appropriate costs order. [§131] The primary issue was whether the defendants should bear a portion of the claimant’s costs due to their unsuccessful pursuit of the fundamental dishonesty allegation. The defendants had raised this issue in their counter-schedule dated 18 March 2025, and it was maintained throughout the trial despite the evidence becoming “increasingly wanting.” [§133]

The court also had to consider the general principle that costs follow the event, given the claim’s dismissal, and whether any order for costs payable by the claimant should be subject to enforcement restrictions.

The Parties’ Positions

The claimant submitted that the defendants should pay a percentage of his costs from the date the fundamental dishonesty allegation was formally raised (18 March 2025), arguing that the issue had been pursued without sufficient basis and had caused significant distress and reputational damage. [§134] The claimant’s solicitors had previously put the defendants on notice that costs would be sought if the allegation failed. [§132] The claimant proposed that 25% of his costs from 18 March 2025 would be appropriate, reflecting the resources devoted to defending the allegation. [§134]

The defendants contended that costs should follow the event, with the claimant paying their costs of the action. [§131] They argued that the fundamental dishonesty issue was properly investigated and pursued, and that some costs associated with it would have been incurred in any event as part of the defence. The defendants highlighted that they had made two “drop hands” offers shortly before trial, which were not accepted. [§132] They maintained that the allegation was raised and pursued in good faith, with counsel assuring the court that “careful consideration had been given to making and maintaining the allegation right through to submissions.” [§133]

The Court’s Decision

The court held that, while the claimant was liable for the defendants’ costs as the unsuccessful party, the defendants’ failure to establish fundamental dishonesty warranted a partial costs order in the claimant’s favour. [§133, §135]

The court found that the allegation had been pursued to the end of the trial despite the evidence being “properly explored at the trial and found increasingly wanting.” [§133] Critically, the court rejected the defendants’ argument that making such an order would “undermine the costs regime” or give defendants a “free tilt at raising the issue of fundamental dishonesty.” The court stated: “If anything it is the converse, not to make such an order would give a defendant a free tilt at raising the issue of fundamental dishonesty.” [§133]

The court noted several factors supporting a costs order in the claimant’s favour:

      • Reputational impact | There was “unfavourable national press coverage on the first day of trial” [§134]
      • Serious consequences if proved | The allegation, if established, “would have been disastrous for his reputation and career” [§134]
      • Opportunity to abandon | “It would have been open to Mr de Bono to have abandoned the issue after the close of evidence, or indeed earlier, but he did not do so” [§133]

The court rejected the claimant’s submission for 25% of costs, considering it too high, and instead ordered the defendants to pay 15% of the claimant’s costs from 18 March 2025, subject to detailed assessment on the standard basis if not agreed. [§134-135] This percentage reflected that some costs would have been incurred regardless, but acknowledged the additional burden imposed by the fundamental dishonesty allegation. The court also accepted Mr de Bono’s submission “that some of the costs would have been incurred in any event.” [§134]

The court also ordered that the claimant pay the defendants’ costs of the action, not to be enforced without the leave of the court. [§135]

YouTube player

Fundamental dishonesty found on appeal by reason of material non disclosure

No Procedural Tension Between CPR 44.11 And s57 of the Criminal Justice and Courts Act 2015

QOCS Protection Lost Where Dishonesty Inflated Claim Value By 100%

Costs Determined Following Partially Successful Clinical Negligence Claim

Claimant Penalised In Costs For “Unreasonable and Unrealistic” Costs Budget

Mixed Claims And CPR 44.16(2)(b) | Exceptions To Qualified One Way Costs Shifting (QOCS)

No Procedural Tension Between CPR 44.11 And s57 of the Criminal Justice and Courts Act 2015

, , ,

The Senior Courts Costs Office’s decision in XX v Young & Aviva Insurance Limited [2025] EWHC 2443 (SCCO) confirms that costs judges cannot make quasi-fundamental dishonesty findings during detailed assessment proceedings.

Background

The dispute originated from a road traffic accident in which the Second Claimant, a 62-year-old woman, was struck by a vehicle driven by the First Defendant while crossing a road. The Second Defendant, Aviva Insurance Limited, was the insurer liable to satisfy any judgment. The Claimant sustained significant injuries, including pelvic and acetabular fractures requiring surgical intervention, with an anticipated earlier need for a hip replacement. The claim proceeded on quantum only, with liability remaining in dispute, and the parties eventually settled at a Joint Settlement Meeting for £149,000, a sum expressed to be “net of contributory negligence” [§49]. The consent order provided for the Second Defendant to pay the Second Claimant’s costs, to be assessed on the standard basis, with a specific term that neither party would be precluded from raising conduct issues during the assessment [§85].

The Second Claimant’s bill of costs was drawn in the sum of £517,985. The detailed assessment was heard over two separate three-day sittings before Costs Judge Nagalingam, during which interim written judgments were provided. Following the line-by-line assessment, the bill was significantly reduced to £339,565.16, a reduction of approximately 34% [§2]. A further judgment on 4 August 2025 addressed the issue of proportionality, applying an additional reduction which effectively concluded the detailed assessment. The reduction to profit costs alone, excluding the costs of the assessment, amounted to approximately 38% [§3].

Costs Issues Before the Court

The matter before the court was the Second Defendant’s application for permission to appeal the judgment of 4 August 2025. The application focused on the judge’s decision regarding proportionality and his rejection of the Second Defendant’s arguments for a costs reduction based on the alleged misconduct of the Second Claimant under CPR 44.11 [§25]. The central issue was whether the judge erred in his approach by not making further reductions to the bill on these grounds. The Second Defendant argued that the case raised important points of principle concerning the relationship between allegations of fundamental dishonesty in the substantive claim and the ability to seek costs sanctions for misconduct on assessment.

The Parties’ Positions

The Second Defendant’s Position

The Second Defendant, represented by Ms McDonald, sought permission to appeal on two grounds. Firstly, under CPR 52.6(1)(a), it was argued that the appeal would have a real prospect of success. The defendant contended that the judge failed to properly consider the Second Claimant’s failure to provide evidence explaining why she accepted a settlement sum significantly lower than her pleaded claim following the disclosure of surveillance evidence [§25(c)]. It was submitted that the judge erroneously reversed the burden of proof and neglected to consider proportionality-based reductions for costs incurred after the date the Claimant should have recovered, and for work on heads of loss (future losses and accommodation) for which no damages were ultimately recovered [§28].

Secondly, under CPR 52.6(1)(b), it was argued there was a compelling reason for the appeal to be heard. The defendant submitted that the judgment created a problematic juxtaposition, implying that defendants must take allegations of fundamental dishonesty to trial to secure a finding under section 57 of the Criminal Justice and Courts Act 2015, rather than seeking a conduct-based reduction under CPR 44.11 at the costs assessment stage [§25(b)]. It was suggested that guidance from an appellate court was needed on this point, with an anecdotal assertion that the Federation of Insurance Lawyers (FOIL) had an interest in the outcome [§15].

The Second Claimant’s Position

The Second Claimant, represented by Mr Mason, resisted the application. While his submissions are not detailed in the judgment, the court’s decision reflects that the Claimant’s position aligned with the judge’s reasoning: that the bill had already been substantially reduced, that the costs order agreed by the parties did not contain the limitations the defendant now sought, and that the assessment was not the correct forum to re-litigate substantive allegations that could and should have been pursued before the trial judge.

The Court’s Decision

Costs Judge Nagalingam dismissed the application for permission to appeal [§109]. Addressing the first ground, the judge held that the appeal would not have a real prospect of success. The court rejected the argument that it had failed to consider the Claimant’s lack of explanation for the settlement, noting that the settlement was a commercial agreement net of contributory negligence and that a party cannot be compelled to waive privilege concerning its reasons for settling [§105]. The judge also found no merit in the arguments regarding further proportionality reductions. He clarified that it was not open to him to retrospectively determine a date of full recovery or to assume that nil damages were recovered for specific heads of loss, as the global settlement sum was not apportioned [§67].

The judge emphasised that the purpose of a detailed assessment is not to hear arguments a party wished it had run but did not [§57]. He noted that the defendant could have sought an issues-based, time-limited, or percentage-based costs order when settling the case if it wished to protect its position, but it had agreed to a standard order for costs [§58-60]. The significant reductions already applied (a 44% reduction in time claimed for work on documents [§63]) were deemed sufficient to bring the costs to a proportionate level.

On the second ground, the judge found no “compelling reason” for an appeal. He firmly rejected the notion of a tension or “lacuna” between the fundamental dishonesty regime in section 57 of the 2015 Act and the general misconduct provision in CPR 44.11 [§77]. The judge reasoned that the two mechanisms serve distinct purposes: section 57 provides for the dismissal of a claim, a serious step requiring a trial, whereas CPR 44.11 allows for costs sanctions for a broad range of unreasonable or improper conduct [§78]. He found the defendant’s argument that the judgment would lead to a blocking of the courts with trials to be speculative and unsupported by any evidence, noting the absence of any formal interest from FOIL [§94-98].

Finally, the judge confirmed that he had properly considered and rejected the CPR 44.11 misconduct argument during the assessment, finding the threshold for a finding of unreasonable or improper conduct had not been met [§107]. Consequently, permission to appeal was refused. There was no order as to the costs of the permission hearing, as the respondent’s attendance was not directed by the court and the substantive costs of the assessment had already been agreed between the parties [§115].

 

YouTube player

 

CPR 44.11 | Claimant’s Costs Of £174,565.79 Reduced To Nil

Direct CPR 44.11 misconduct case with complete disallowance of costs for unreasonable behaviour

Allegations of misconduct and the court’s powers under CPR 44.11

Comprehensive analysis of CPR 44.11 powers and requirements for misconduct findings

CPR 44.11: Misconduct in detailed assessment proceedings

Court of Appeal authority on misconduct in detailed assessment with mis-certification issues

Solicitor’s Costs Budget Figure, Prepared on Reasonable and Proportionate Basis, Does Not Inherently Constitute Misleading or Improper Conduct Under CPR 44.11

Recent 2025 High Court decision on CPR 44.11 threshold for misconduct

Fundamental dishonesty found on appeal by reason of material non disclosure

Court of Appeal case distinguishing fundamental dishonesty from general misconduct

Appeals from costs judges: Seeking permission to appeal

Procedural guidance on permission to appeal from costs judges under CPR 52.6

QOCS Protection Lost Where Dishonesty Inflated Claim Value By 100%

, , ,

Ms O’Connell, a former gunner in the Royal Horse Artillery, brought proceedings against the Ministry of Defence following a riding accident in September 2015. The claim was pursued both in negligence and under the Animals Act 1971, seeking damages totalling £2,446,738.66.

The defendant sought not only dismissal of the claim but also a finding of fundamental dishonesty and permission to enforce any costs order against the claimant under CPR 44.16(1), which provides that costs orders “may be enforced to the full extent of such orders with the permission of the court where the claim is found on the balance of probabilities to be fundamentally dishonest.”

The allegations centred on surveillance evidence from March 2022 showing the claimant performing physical activities inconsistent with her reported disability, together with evidence regarding her responsibility for horses, representations about vehicle adaptations, and other material inconsistencies.

The Parties’ Positions on Fundamental Dishonesty and Costs

The defendant argued that the claimant had misrepresented her disability in a manner that constituted fundamental dishonesty. They relied particularly on surveillance footage showing the claimant driving a manual transmission horsebox and performing various physical tasks using her allegedly disabled left arm. The defendant submitted that the dishonesty tainted the entire claim, affecting claims for general damages, loss of earnings, and future care costs.

The defendant also relied on sophisticated attempts to conceal evidence, including Facebook messages showing the claimant seeking someone to provide false evidence about vehicle adaptations that had never occurred.

The claimant contended that she had been consistent in reporting her disability to medical experts and that the surveillance evidence showed only brief periods of exceptional activity enabled by pain medication and a spinal cord stimulator. She argued that any inconsistencies could be explained by the stress of lengthy litigation and pointed to her continued invasive treatment as inconsistent with dishonesty.

The Court’s Analysis | Applying CPR 44.16 Fundamental Dishonesty Principles

The court applied the dishonesty test from Ivey v Genting Casinos Limited, requiring first a subjective assessment of the claimant’s actual state of knowledge, then an objective determination of whether the conduct was dishonest by the standards of ordinary decent people.

For fundamental dishonesty, the court applied the approach in Howlett v Davies, distinguishing between dishonesty that is merely “incidental” or “collateral” and dishonesty that goes “to the root of either the whole of his claim or a substantial part of his claim.”

The judge considered the three questions from Muyepa v Ministry of Defence: when the dishonest conduct started, whether it tainted the whole claim, and how the value of the underlying valid claim compared with the dishonestly inflated claim.

Key Findings on Dishonesty

The court found that the claimant had been fundamentally dishonest across multiple areas:

Surveillance evidence: The differences between what the claimant told experts and what she could be seen doing were “stark” and not capable of explanation by assistance from her friend or by pain medication. The claimant’s presentation on video was “of someone with normal or near normal function in their left upper limb and shoulder.”

Responsibility for horses: The court rejected the claimant’s evidence that she was merely helping a friend, finding that she had been responsible for the care of horses on a long-term basis, contradicting her accounts of disability.

Vehicle adaptations: The court found that the claimant owned two different white Audi A3 vehicles, transferring the number plate between them in December 2022 after being asked to provide evidence of adaptations. Facebook messages demonstrated the claimant seeking false evidence about vehicle alterations that had never occurred.

Employment capacity: The claimant’s schedule claimed she was only fit for part-time work, but she told an investigator she was working full-time hours.

The CPR 44.16 Fundamental Dishonesty Finding

Applying the Muyepa questions, the court found:

    • The dishonest conduct started by December 2018 when the claimant told her orthopaedic expert she had adapted her vehicle when she had not.
    • The dishonesty tainted the whole claim because it went to the extent of the left upper limb disability which formed the basis for all compensation claims.
    • The underlying valid claim would have been worth perhaps 50% of the dishonestly inflated claim, despite the claimant still having had a substantial claim due to her lost army career.

The Costs Decision

The court concluded that the dishonesty went to the heart of the claim, supporting higher general damages, a significantly greater loss of earnings claim, and a claim for future support to which she would not otherwise have been entitled.

The judge noted that the claimant had “persisted with her dishonesty over a long period” and had “sought to engage others” with “sophisticated” attempts to conceal the truth. The court found this “an appropriate case in which to grant permission to the Defendant to enforce any order for costs it may obtain against her to its full extent.”

The QOCS protection that would ordinarily apply to this personal injury claim was therefore displaced, allowing the defendant to enforce costs orders against the claimant without the usual restrictions under CPR 44.13-44.16.

Broader Implications

The case demonstrates the application of established fundamental dishonesty principles to sophisticated attempts at concealment. The court’s willingness to examine Facebook messages and vehicle registration transfers shows the detailed scrutiny that may be applied where fundamental dishonesty is alleged.

The judgment confirms that where dishonesty affects the core presentation of a claimant’s disability rather than being merely collateral to minor aspects of the claim, removal of QOCS protection will follow. The case also illustrates how multiple strands of inconsistent evidence can combine to establish a pattern of fundamental dishonesty that taints an entire claim.

Fundamental dishonesty found on appeal by reason of material non disclosure

QOCS Protection Limited To 50% Of Costs In Mixed Personal Injury Claims

, , ,

In Searson v Chief Constable of Nottingham Constabulary [2025] EWHC 1982 (KB), Wall J’s costs decision following a partially successful appeal provides instructive guidance on how courts approach QOCS protection in mixed claims. The case demonstrates that even claimants bringing identical causes of action on the same claim form can face dramatically different costs consequences depending on whether they include a personal injury element.

The Costs Orders | Contrasting Protection Levels

Following HHJ Owen’s dismissal of all claims at trial, the costs orders strikingly differed between the two claimants:

  • Mr Searson: No QOCS protection – fully liable for the defendant’s costs
  • Mrs Searson: 50% QOCS protection under CPR 44.16 – enforcement limited to half the assessed costs

These differentiated orders survived appeal, confirming important principles about individualised assessment of QOCS protection.

Background | The Claims and Costs Context

The Searsons brought claims for false imprisonment, trespass to person and trespass to goods following their arrest and detention in March 2019. Crucially for costs purposes, Mrs Searson alone included a personal injury claim, alleging physical and psychological effects on her pre-existing health conditions.

The appeal succeeded only on a technical point regarding Mrs Searson’s detention review, establishing unlawful detention for 2 hours 14 minutes but resulting in nominal damages of £1.

The QOCS Analysis | Individual Assessment Required

Mr Searson | No Personal Injury Means No Protection

Wall J applied the principle from BB v Khayyat [2025] EWHC 443 (KB): QOCS protection is determined by reference to each claimant’s specific claims. Despite sharing a claim form with his wife’s personal injury claim, Mr Searson received no protection because he made no personal injury claim himself.

The court rejected arguments that claims could be “so bound up” as to extend QOCS protection by association – a position “sensibly abandoned” at the hearing.

Mrs Searson | The Mixed Claim Evaluation

For Mrs Searson, the court:

  • Correctly identified her claim as mixed under CPR 44.16
  • Conducted the required evaluation of how proceedings were actually conducted
  • Determined 50% protection appropriately reflected that “the majority of the trial was taken up with the determination of the lawfulness of her detention and not an assessment of her pleaded injuries”

Wall J emphasised the discretionary nature of costs orders, stating he would only interfere if the decision was one the judge “could not properly have come to.”

Key Principles for Costs Practice

Individual Assessment on Joint Claims

The decision confirms that:

  • Each claimant must be assessed individually for QOCS protection
  • Using the same claim form provides no costs protection advantages
  • “Protection by association” is not available even between spouses
  • Each claimant’s costs liability is determined separately

Mixed Claims | The Practical Evaluation

When assessing mixed claims under CPR 44.16, courts consider:

  • How trial time was actually allocated, not just the pleadings
  • The relative focus on personal injury versus other claims
  • What damages would have been recoverable without the personal injury element
  • The practical conduct of proceedings

The Discretionary Threshold

Wall J’s approach reinforces that:

  • Partial QOCS protection is a realistic outcome in mixed claims
  • Courts have wide discretion in determining protection levels
  • Appeals face a high threshold – the decision must be one the judge “could not properly have come to”

Practical Implications

This decision provides valuable guidance for costs practitioners handling multi-claimant cases:

Strategic considerations: When advising multiple claimants, practitioners must assess each client’s position individually. The inclusion of personal injury claims by one claimant provides no costs protection for others, even family members on the same claim form.

Mixed claims evaluation: The reality of trial conduct matters more than pleaded claims. Where substantial trial time addresses non-personal injury issues, expect reduced QOCS protection even where personal injury is pleaded.

Client advice: Practitioners must ensure clients understand that partial success may still result in significant costs exposure. Here, proving unlawful detention attracted nominal damages of £1 while exposing Mrs Searson to 50% of the defendant’s costs.

Procedural efficiency: Using a single claim form for multiple claimants offers no costs protection advantages and may complicate costs assessments where different protection levels apply.

The Broader Costs Context

This case reinforces developing jurisprudence on mixed claims and QOCS protection. It confirms courts will take a granular approach, examining:

  • The actual conduct of proceedings
  • The substantive focus of trial time
  • The true nature of claims pursued

The decision sits comfortably alongside BB v Khayyat in confirming that QOCS protection cannot be shared between claimants based on procedural convenience or personal relationships.

Conclusion

Searson provides clear guidance on individualised QOCS assessment in multi-claimant cases. The contrasting costs orders – full exposure for one claimant, 50% protection for another – demonstrate the importance of careful claim formulation and client advice about costs risks.

For costs practitioners, the case reinforces that strategic decisions about including non-personal injury claims alongside personal injury claims require careful cost-benefit analysis. The nominal damages award despite proving unlawful detention serves as a reminder that procedural victories don’t necessarily translate into costs protection where QOCS is limited or unavailable.

The decision confirms that courts will maintain a principled, individualised approach to QOCS protection, looking beyond claim forms to the substance of what each claimant actually pursues at trial.

Credit Hire Companies Liable For Costs As Real Parties Under QOCS Exception

, , ,

Background

These consolidated appeals concerned two road traffic accident cases where claimants had entered into credit hire agreements and subsequently brought proceedings that included claims for personal injury and credit hire charges. In both cases, the claims failed and costs orders were made in favour of the defendants. However, due to the operation of Qualified One-Way Costs Shifting (QOCS), these costs orders could not be enforced against the claimants. The defendants then sought non-party costs orders against the respective credit hire companies.

In the first case, Tescher v Direct Accident Management Limited, a motorcycle accident occurred on 19 November 2018. The claimant entered into credit hire agreements with Direct Accident Management Limited (DAML) and brought proceedings through solicitors Bond Turner. The claim included damages for personal injury and special damages of over £22,000, of which £19,633.36 related to credit hire charges for 88 days. The claimant pleaded impecuniosity. District Judge Swan dismissed the claim on 8 December 2022 and ordered the claimant to pay the defendant’s costs, subject to QOCS protection. The judge directed DAML be joined as a second defendant for costs purposes.

District Judge Jeffs subsequently heard the defendant’s application for a non-party costs order on 10 May 2023. Evidence was filed including documents showing DAML and Bond Turner were part of the Anexo group, which described itself as focused on providing replacement vehicles and legal services to impecunious customers involved in non-fault accidents. DJ Jeffs dismissed the application, finding DAML was not the “real party” and that causation had not been established. Permission to appeal was granted and the matter was transferred to the Court of Appeal.

In the second case, AXA Insurance v Spectra, an accident occurred on 23 October 2019 resulting in the claimant’s vehicle being written off. The claimant entered into a credit hire agreement with Spectra Drive Limited on the day of the accident. Liability was admitted on 28 October 2019, but the hire continued for 89 days. Proceedings were commenced against AXA Insurance under the European Communities (Rights against Insurers) Regulations 2002, claiming general damages for personal injury (unlikely to exceed £3,800) and special damages of £16,160.94, predominantly credit hire charges.

AXA made a Part 36 offer of £2,750 for the personal injury claim only on 18 November 2020. On 25 May 2021, AXA’s solicitors highlighted that the claimant had insured another vehicle within 10 days of the accident and threatened to plead fundamental dishonesty. The claimant discontinued on 28 May 2021, resulting in the usual costs order under CPR r38.6(1), subject to QOCS.

AXA applied for two orders: setting aside QOCS protection on grounds of fundamental dishonesty and a non-party costs order against Spectra. Deputy District Judge Carson found no fundamental dishonesty but initially awarded 65% of AXA’s costs (£3,432) against Spectra. On appeal, HHJ Gargan overturned various findings and refused the non-party costs order, noting AXA’s “good fortune in escaping a judgment and costs” as a factor against making such an order. He suggested general guidance would be welcome given the frequency of credit hire cases.

Costs Issues Before the Court

The central issue before the Court of Appeal was whether and in what circumstances non-party costs orders should be made against credit hire companies when credit hire cases fail and the claimant is protected by QOCS. This required the court to consider the interaction between the QOCS regime introduced in 2013 and the established principles governing non-party costs orders under section 51 of the Senior Courts Act 1981.

The court needed to determine whether credit hire companies could be characterised as “real parties” to the litigation or persons for whose financial benefit claims were made within the meaning of CPR r44.16(2)(a). This rule provides an exception to QOCS where proceedings include a claim made for the financial benefit of a person other than the claimant, and r44.16(3) expressly contemplates non-party costs orders in such circumstances.

A crucial subsidiary issue was causation – whether the credit hire companies’ involvement had caused the defendants to incur costs they would not otherwise have incurred. This included examining the nature and extent of control exercised by credit hire companies over litigation and whether a strict “but for” test applied.

The court also had to consider the proper approach to exercising discretion when the jurisdiction for non-party costs orders was engaged, including questions of attribution between different elements of mixed claims (personal injury and credit hire) and what proportion of costs should be ordered against the credit hire company.

The Parties’ Positions

The appellants (the defendants in the original proceedings) contended that non-party costs orders should have been made against both credit hire companies. They argued that the credit hire companies were the real beneficiaries of the litigation relating to hire charges and exercised sufficient control over the proceedings through the structure of their agreements. They submitted that the inevitability of litigation flowing from credit hire agreements with impecunious claimants satisfied the causation requirement.

The appellants relied on Farrell v Birmingham City Council [2009] EWCA Civ 769, where a non-party costs order was made against a credit hire company, arguing this established the principle in the credit hire context. They contended that Lord Mustill’s observation in Giles v Thompson [1994] AC 142 about “healthy discipline” through costs orders supported their position. They also argued that CPR r44.16(2)(a) and Practice Direction 44 paragraph 12.2 specifically identified credit hire as an example of claims made for another’s financial benefit.

Regarding the Spectra case specifically, the appellants submitted the judge erred in relying on AXA’s “good fortune” in obtaining a costs order following discontinuance, citing Nelson’s Yard Management Company v Eziefula [2013] EWCA Civ 235 that potential success at trial does not justify departing from the usual costs consequences of discontinuance.

The respondent credit hire companies argued that credit hire claims were legitimate claims by claimants, validated by Giles v Thompson and Lagden v O’Connor [2003] UKHL 64. They contended they were not the “real party” as they had no direct right to damages and the claimant retained a genuine legal liability for hire charges. They submitted that any benefit they derived was consequential rather than direct.

The respondents argued there was no principled distinction between credit hire companies and solicitors acting on conditional fee agreements, neither of whom face non-party costs orders in ordinary circumstances. They challenged Practice Direction 44 paragraph 12.2 as wrong and without legislative force. On causation, they argued for a strict “but for” test, submitting the defendants would have incurred similar costs defending the personal injury claims regardless of the credit hire element.

In the Spectra case, the Respondent’s Notice challenged the judge’s findings that Spectra was the principal beneficiary and primary cause of the litigation, arguing these conclusions were incorrect even without the “good fortune” point.

The Court’s Decision

The Court of Appeal allowed both appeals and made non-party costs orders against the credit hire companies. Lord Justice Birss, giving the leading judgment, established comprehensive guidance for future cases involving non-party costs applications against credit hire companies in the QOCS context.

The court held that credit hire companies in these circumstances satisfy the “real party in all but name” test. The essential characteristics of credit hire agreements – hire on credit with payment deferred until conclusion of damages claims – combined with claimants’ alleged impecuniosity made litigation inevitable for all practical purposes. The court found this created sufficient control over the litigation and established the necessary causation, as litigation was the only realistic means by which credit hire companies would be paid.

On the interpretation of CPR r44.16(2)(a), the court confirmed that credit hire claims are made for the financial benefit of a person other than the claimant. While QOCS was introduced to protect claimants in personal injury claims, it was not intended to protect non-parties for whose financial benefit claims were made. The court noted that r44.16(3) expressly contemplates non-party costs orders in these circumstances.

The court rejected the respondents’ analogy with solicitors acting on CFAs, distinguishing that solicitors are not the genesis of claims, their fees are not the subject of claims, and CFAs do not bind claimants to pursue claims. Credit hire companies, by contrast, were found to be the real beneficiaries of litigation for hire charge damages through the structure of their agreements.

Regarding causation, the court rejected a strict “but for” test, holding that the inevitability of litigation flowing from the credit hire agreement structure was sufficient. The court stated it was unnecessary to consider whether costs would be higher without the credit hire element, as such questions were better addressed at the stage of determining quantum.

The court proposed a two-stage approach for future cases: first, determining whether the non-party costs jurisdiction is engaged, and second, deciding the appropriate amount. Where credit hire claims are several times larger than personal injury claims, an order for all costs would likely be appropriate absent special circumstances.

In the DAML case, the court found the judge’s conclusions on the “real party” test and causation were incorrect. The court ordered DAML to pay all the defendant’s costs, given the credit hire charges were several times larger than the personal injury damages.

In the Spectra case, the court dismissed the Respondent’s Notice and found the judge correctly identified Spectra as the principal beneficiary. However, the judge’s reliance on AXA’s “good fortune” was held to be an error. The court reinstated the Deputy District Judge’s original order requiring Spectra to pay 65% of AXA’s costs.

The court emphasised that PD 44 paragraph 12.5(a) provides that when r44.16(2)(a) applies, courts will usually order the other person to pay costs, while it will only be exceptional to permit enforcement against the claimant. This guidance aligned with the court’s analysis that non-party costs orders against credit hire companies would be likely absent special circumstances.

QOCS In 2025 | The Current Landscape

, ,

The world of Qualified One-Way Costs Shifting (QOCS) in England and Wales has seen significant shifts since the Civil Procedure Rule (CPR) amendments of April 6, 2023. For legal practitioners, understanding these changes is not just beneficial, it’s essential for navigating the complexities of litigation in 2025 and beyond. These reforms have fundamentally altered defendants’ ability to recover adverse costs and have breathed new life into the strategic power of CPR Part 36 offers. Meanwhile, the application of QOCS to “mixed claims” – those combining personal injury with non-personal injury elements – continues to be a dynamic area, shaped by ongoing judicial interpretation.

This post will delve into these critical developments, highlighting the increased financial risks for claimants and the imperative for legal professionals to adopt proactive, informed, and agile litigation strategies.

QOCS | A Refresher and the Game-Changing 2023 Reforms

QOCS was introduced on April 1, 2013, as a cornerstone of Lord Jackson’s civil justice reforms. Its primary aim was to ensure access to justice for individuals pursuing personal injury claims, particularly against well-resourced defendants. The core principle is straightforward: an unsuccessful claimant in a personal injury case generally isn’t liable for the defendant’s legal costs. This was designed to reduce the financial burden on claimants and lessen the need for After-the-Event (ATE) Legal Expenses Insurance. 

However, QOCS protection isn’t absolute. Exceptions exist, notably when a claim is found to be fundamentally dishonest. Other instances include claims struck out for lacking a cause of action or those pursued primarily for a third party’s benefit. The application of QOCS has been continually refined through case law. 

The most recent and impactful legislative intervention came on April 6, 2023, with significant amendments to the Civil Procedure Rules, particularly CPR 44.14. These revised rules apply exclusively to claims where proceedings were issued on or after this date. The government’s motivation for these reforms was to provide defendants with greater opportunities to recover costs, especially in cases deemed unmeritorious , aiming to rebalance a costs regime some felt had become overly skewed towards claimants. 

Enforcement | The Post-2023 Reality

The Old Rules: A Shield for Claimants

Before April 2023, defendants faced significant limitations in recovering costs under QOCS. A claimant’s liability for adverse costs was strictly capped at the monetary value of damages and interest awarded by a court order. This “damages cap” ensured claimants wouldn’t be out-of-pocket for adverse costs beyond their compensation.

Two appellate decisions further restricted defendant recovery:

  • Cartwright v Venduct Engineering Ltd EWCA Civ 1654: This ruling extended QOCS protection to damages recovered through settlement agreements (like Part 36 offers or Tomlin Orders), meaning defendants often couldn’t recover costs even when a claim settled in their favour.
  • Ho v Adelekun UKSC 43: The Supreme Court ruled that adverse costs could not be set off against a claimant’s recoverable costs. This meant recovery was limited solely to awarded damages.

These judgments made it extremely difficult for defendants to recover costs, even when successful. This often made it “cheaper and more time efficient than contesting the claim and taking the case to court” for defendants to simply settle. The Ho v Adelekun decision, while initially seen as a claimant victory, was ultimately a “pyrrhic victory” , leading to outcomes widely considered “counter-intuitive and unfair to defendants” , which directly prompted the swift legislative response.

The New Rules | Expanded Enforcement Powers (CPR 44.14)

The Civil Procedure (Amendment) Rules 2023 explicitly reversed the effects of both Cartwright and Ho. The scope of enforcement has expanded considerably: adverse costs orders can now be enforced without court permission against “any order or agreement to pay or settle a claim for damages, costs and interest made in favour of the claimant”. This includes damages recovered via Part 36 offers and Tomlin Orders, directly overturning Cartwright.

The “general enforcement cap” has also been raised. Defendants can now recover costs up to the aggregate amount of damages plus costs awarded to the claimant, moving beyond the previous damages-only limitation. This means a defendant’s costs order can potentially “completely erode the combined sum that the Claimant recovered in damages and costs”. Crucially, the right to set off adverse costs against the amount owed to the claimant has been restored, directly reversing Ho v Adelekun.

Practical Implications for Claimants and Defendants

This post-April 2023 landscape has “tipped the balance in favour of defendants” , introducing “new challenges for claimants”. Claimants now face “greater financial risks” and may find themselves “liable for significant costs”. This shift has been described as a “devastating blow to Claimants and their representatives”.

A direct consequence is the renewed and increased necessity for claimants to obtain After-the-Event (ATE) insurance. While QOCS aimed to reduce this need, ATE cover may now be “vital” in cases with potential for significant adverse cost orders. This creates a paradox: the mechanism designed to facilitate access to justice now, through its rebalancing, imposes a greater financial hurdle. This could deter legitimate claims, especially those with lower damages where the cost of ATE or heightened risk might outweigh potential compensation.

The changes also signal a shift in litigation dynamics. Defendants are now “more likely to contest a claim that they dispute rather than simply paying to settle”. The reforms aim to restore a “sense of balance” in costs recoverability, encouraging more vigorous defence where merited.  

Table 1 | Key QOCS Rule Changes (Pre- vs. Post-April 2023)

Feature / Rule Pre-April 2023 Position Post-April 2023 Position (Effective 6 April 2023) Relevant Snippets
Enforcement against Settlements (Part 36/Tomlin Orders) Precluded enforcement against damages recovered via settlement (e.g., Part 36, Tomlin Orders) (Cartwright v Venduct Engineering Ltd). Explicitly allowed enforcement against settlement agreements, including Part 36 offers and Tomlin Orders.
Set-off of Costs (Defendant’s costs vs. Claimant’s costs) Precluded set-off of defendant’s costs against a claimant’s recoverable costs (Ho v Adelekun). Explicitly permitted set-off of adverse costs against the amount owed to the claimant, including their recoverable costs.
Enforcement Cap (Limit of Claimant’s Liability) Limited to the aggregate amount of damages and interest awarded to the claimant. Claimants would not be out-of-pocket beyond awarded damages. Expanded to the aggregate amount of any orders for, or agreements to pay or settle a claim for, damages, costs, and interest made in favour of the claimant.
Need for ATE Insurance Reduced necessity, as QOCS provided significant protection. Increased imperative and vitality due to greater financial risks for claimants.
Applicability Applied to claims issued before April 6, 2023. Applies to claims issued on or after April 6, 2023.

Part 36 Offers | A Renewed Strategic Weapon

The April 2023 reforms have profoundly amplified the strategic importance and effectiveness, or “bite,” of defendant Part 36 offers. Previously, Cartwright and Ho had significantly diminished the costs consequences for claimants who failed to beat a defendant’s Part 36 offer, as enforcement against settlements or set-off against recoverable costs was largely precluded. This effectively “robbed Part 36 offers of much of their teeth” for defendants.  

Under the amended CPR 44.14, if a claimant rejects a defendant’s Part 36 offer and then fails to secure a more advantageous judgment at trial, the defendant’s costs incurred from the expiry of the relevant period can now be enforced. This enforcement can be levied against the aggregate amount of damages, costs, and interest recovered by the claimant. This restoration of enforceability means the “full utility” of Part 36 offers for defendants has been reinstated. Defendants now have greater leverage and are more inclined to contest disputed claims rather than settling solely to avoid costs exposure, creating a “more level playing field”.  

Claimants’ Heightened Risks and the Critical Need for Early, Robust Claim Valuation

The increased enforceability of adverse costs places claimants and their legal representatives under considerable pressure. They must now “think very carefully before rejecting offers”. The prospect of their own damages and recoverable costs being eroded or entirely wiped out by a defendant’s costs order is a significant concern, especially for cases funded by Conditional Fee Agreements (CFAs), where the potential erosion of the claimant’s legal costs is of “particular concern”. 

This heightened risk necessitates a “critical need for early, robust claim valuation”. Legal practitioners advising claimants are now strongly advised to “get a grip of the value of claims as early as possible”. This proactive approach is essential for effective case management and mitigating substantial costs risks. It implies greater “frontloading of claims for claimants” , requiring thorough assessments earlier. Claimants will also have to “carefully consider any offer to settle a claim, sometimes before the value is capable of being assessed, to ensure that they obtain a fair settlement whilst mitigating the risk of a costs order against them”. 

Impact on Settlement Negotiations, Interim Applications, and Multi-Defendant Cases

The revised QOCS regime has far-reaching implications:

  • Settlement Negotiations: Claimants must approach settlement offers with extreme caution. The need to “carefully consider any offer to settle a claim, sometimes before the value is capable of being assessed” is paramount to prevent a costs order from reducing or eliminating their settlement. This compels claimants to be more pragmatic and potentially accept reasonable offers earlier. 
  • Interim Applications: Adverse costs orders from interim applications (e.g., for relief from sanctions or disclosure disputes) are now enforceable against the claimant. This means practitioners must give “proper thought to whether or not they should make/resist any applications”. A loss on an interim application will now “inevitably diminish” the claimant’s potential net recovery. 
  • Multi-Defendant Cases: The previous QOCS regime inadvertently encouraged claimants to issue proceedings against multiple defendants “protectively,” knowing they could later discontinue against some with limited costs exposure. The new rules fundamentally alter this. “Settlement against one defendant cannot now be followed by the swift and carefree discontinuance of a claim against another” , as such discontinuance triggers a deemed order for costs in favour of the discontinued defendant, now fully enforceable. This demands “careful thought and thorough investigation” before issuing against multiple defendants.  

Recent Case Law

Courts continue to interpret and apply the new QOCS rules, providing crucial guidance. One notable case is:

  • Amjad v UK Insurance Ltd EWHC 2832 (KB): Mr Justice Ritchie overturned a lower court’s decision to lift the QOCS cap where the claimant failed to beat the defendant’s Part 36 offer. The ruling reaffirmed that the QOCS cap can be lifted only in “certain defined circumstances” and applies specifically to personal injury damages. This highlights ongoing judicial scrutiny of QOCS cap lifting and its interaction with Part 36 offers. 

Mixed Claims | CPR 44.16(2)(b) Discretion

Defining “Mixed Claims”

“Mixed claims” involve a claimant seeking damages for personal injuries alongside other claims not strictly defined as personal injury damages. While personal injury damages under QOCS include pain and suffering, and directly linked heads like loss of earnings and treatment costs , claims for vehicle damage, credit hire, data protection breaches, human rights claims, or police malfeasance constitute the “non-PI” elements that create a mixed claim. The presence of these non-PI elements fundamentally alters QOCS application. 

The Court’s Discretion | “Just to Do So”

In mixed claims, QOCS protection isn’t automatic. CPR 44.16(2)(b) grants the court discretion. The key question is whether the claimant is asserting “anything other than damages for personal injuries”. If so, the court determines “whether, and if so to what extent, it is just to permit enforcement of a defendant’s costs order”. The court doesn’t need to dissect interconnected causes of action; the focus is on the presence of any non-PI claims.  

Analysis of Recent Key Judgments

Recent judgments provide crucial guidance on applying QOCS to mixed claims:

  • The Commissioner of Police of the Metropolis v Brown EWHC 2046 (Admin) (upheld by Court of Appeal): This landmark case clarified that QOCS protection doesn’t automatically apply when non-PI elements are present. The court noted that if two claims are “inextricably linked,” this can influence discretion in the claimant’s favour, potentially limiting costs enforcement. 
  • ABC & Ors v Derbyshire County Council & Ors, Re Costs EWHC 1337 (KB): This High Court judgment provides significant post-April 2023 guidance. Claimants brought Human Rights Act (HRA) and negligence claims, all dismissed. The judge ordered claimants to pay defendants’ costs but limited enforcement to 5% of total costs. The court acknowledged QOCS relevance even with other claims and considered “exceptional features” to justify a substantial reduction. This case demonstrates the court’s willingness to limit enforcement, even when non-PI claims are unsuccessful, acting as a safeguard against disproportionate outcomes.
  • Amjad v UK Insurance Ltd EWHC 2832 (KB): This case (also discussed under Part 36) involved mixed claims (PI + credit hire). The court reaffirmed QOCS applies only to PI claims, but discretion in mixed claims depends on who benefits (claimant vs. third party). 

Table 2: Summary of Recent Key Judgments on Mixed Claims (Post-April 2023)

Case Name & Citation Date of Judgment Key Legal Issue Court’s Holding / Rationale Implication for Practitioners Relevant Snippets
The Commissioner of Police of the Metropolis v Brown EWHC 2046 (Admin) (upheld by CA) July 31, 2018 (CA Oct 18, 2019) Application of QOCS to claims combining PI with non-PI elements (e.g., police malfeasance, data misuse). QOCS protection does not automatically apply to mixed claims. Court has discretion under CPR 44.16(2)(b) to permit enforcement. Emphasized “inextricably linked” claims may favour claimant discretion. Defendants should pursue costs in successfully defended mixed claims. Claimants must carefully assess non-PI elements and argue for linkage.
ABC & Ors v Derbyshire County Council & Ors, Re Costs EWHC 1337 (KB) June 6, 2023 Extent of costs enforcement in mixed claims (HRA + negligence) where QOCS applies. Claimants liable for defendant’s costs, but enforcement limited to 5% of total costs. Court exercised discretion based on “exceptional features” despite claims being dismissed. Court retains significant discretion to limit enforcement in mixed claims, even post-April 2023. Arguments for proportionality and justice remain vital for claimants.
Amjad v UK Insurance Ltd EWHC 2832 (KB) November 15, 2023 Disapplication of QOCS cap where claimant failed to beat Part 36 offer in a mixed claim (PI + credit hire). Overturned lower court decision; QOCS cap should not be lifted. Reaffirmed QOCS applies only to PI claims, but discretion in mixed claims depends on who benefits (claimant vs. third party). Highlights ongoing judicial scrutiny of QOCS cap lifting and Part 36 interaction in mixed claims. Reinforces that specific gateways for disapplication must be met and the “benefit” test for third-party claims.

Practical Advice for Practitioners Handling Mixed Claims

For legal professionals navigating mixed claims, a nuanced approach is essential:

  • Careful Claim Dissection: Meticulously identify all potential non-personal injury elements and understand their implications for QOCS protection. 
  • Strategic Pleadings: Consider how claims are pleaded to best position the claimant for QOCS protection or to argue for favourable judicial discretion under CPR 44.16(2)(b), especially if claims are “inextricably linked”. 
  • Defendant Strategy: Proactively seek costs recovery orders where circumstances permit, particularly if there’s exaggeration in non-PI heads of claim. Be prepared to argue why enforcement would be “just.” 
  • Settlement Offers: Frame settlement offers in mixed claims to explicitly address costs. Consider offers where no payment for claimant’s costs is made until defendant’s costs are agreed and an offset is formally agreed. 

The Road Ahead: What to Expect in 2025 and Beyond

Simplified Costs Budgeting Pilot Scheme (Effective April 2025)

From April 1, 2025, to March 31, 2028, a pilot scheme for Simplified Costs Budgeting, or “Costs Budgeting Light,” will streamline the process for claims under £1 million, particularly in Business & Property Courts and specific District Registries where QOCS applies. New forms (Precedent Z, ZR, ZT) are introduced.

In QOCS cases, claimants ordinarily won’t need to serve a budget discussion report. This reflects the principle that claimants generally don’t bear defendant’s costs. However, the court retains discretion to costs manage defendant’s costs, especially if fundamental dishonesty is alleged. Full costs management (Precedent H) can also be directed if necessary. While aiming for efficiency, this dual system could lead to initial procedural uncertainty. Robust initial budgeting and preparedness for detailed costs management remain essential. 

Ongoing Government Consultations: Extending QOCS?

The government is actively considering extending QOCS beyond personal injury and clinical negligence claims. A call for evidence on extending QOCS to discrimination claims closed on February 19, 2025, exploring options like cost-capping and direct QOCS application. 

The rationale is that the prospect of adverse costs is a “major barrier to bringing claims of all types”. Discrimination cases often involve a power imbalance similar to personal injury claims. Various bodies, including Disabled People’s Organisations, advocate for QOCS extension to disability discrimination cases. The Ministry of Justice also launched a broader call for evidence on equality law changes, including proposals for extending equal pay claims to ethnicity and disability, open until June 30, 2025. This indicates a wider governmental review of costs protection mechanisms in social policy. While the April 2023 reforms tightened QOCS in personal injury, these concurrent discussions about extending it to other areas signal a complex and potentially contradictory policy landscape. 

Emerging Case Law and Ongoing Satellite Litigation

The “seismic shift” introduced by the April 2023 QOCS amendments is expected to generate “further litigation concerning its interpretation and application”. Courts will continue to clarify the nuances of the new enforcement rules, Part 36 interaction, and mixed claims application. Recent judgments like Amjad v UK Insurance Ltd and ABC & Ors v Derbyshire County Council & Ors, Re Costs illustrate the judiciary’s active role. 

The concept of “fundamental dishonesty” remains a critical exception and will continue to be tested and refined. Any significant legislative change inevitably leads to “satellite litigation” , as rules are applied to diverse factual scenarios. These cases provide concrete examples, clarifying ambiguities and establishing boundaries. The true “mastery” of the post-2023 landscape will come from understanding this evolving body of case law, making continuous legal research critical for practitioners.  

Strategic Recommendations for Practitioners

To effectively navigate the post-April 2023 QOCS landscape in 2025, legal practitioners must adopt a multi-faceted and proactive strategic approach:

  • Proactive Case Management and Early Valuation: Claimants’ solicitors must conduct rigorous and continuous case valuation from the earliest stages, understanding potential damages, recoverable costs, and how adverse costs might impact them. Defendants should ensure Part 36 offers are well-pitched and timely.
  • Thorough Client Advice on Costs Risks and ATE Insurance: Transparency and comprehensive client education on increased financial risks are paramount. Detailed discussions about potential erosion of damages and recoverable costs by adverse orders should be standard. The necessity and benefits of ATE insurance must be clearly explained.
  • Strategic Approach to Part 36 Offers: Claimants must approach Part 36 offers with extreme caution, understanding the implications of rejection. Carefully weigh the risks of failing to beat an offer against potential for a less favourable outcome and significant costs consequences. Defendants should leverage their enhanced Part 36 “bite.”
  • Navigating Mixed Claims with Precision: For mixed claims, meticulously identify and assess all non-PI components. Prepare arguments for the court’s discretion under CPR 44.16(2)(b), emphasizing “inextricably linked” elements to advocate for limited costs enforcement, drawing on recent judicial interpretations.
  • Continuous Monitoring of Evolving Case Law and Reforms: Commit to continuous professional development and vigilant monitoring of new judgments, particularly those addressing CPR 44.14 and 44.16(2)(b). Stay abreast of future government consultations or procedural pilot schemes like Simplified Costs Budgeting.
  • Reviewing Funding Arrangements: Claimant solicitors should thoroughly review Conditional Fee Agreements (CFAs) and terms of business. These must adequately reflect new costs risks and potential for reduced client recovery due to defendant costs orders, ensuring transparency and compliance.

Conclusion

The April 2023 reforms to the Qualified One-Way Costs Shifting regime represent a fundamental rebalancing of the costs landscape in personal injury litigation across England and Wales. This shift has largely empowered defendants to recover adverse costs in previously protected scenarios and significantly enhanced the strategic potency of Part 36 offers. In 2025, legal practitioners must operate with heightened awareness of these changes, understanding their profound implications for enforcement against settlements and the renewed leverage held by defendants.

While courts retain vital discretion in mixed claims, the overarching trend points towards increased financial exposure for claimants. Mastering this post-April 2023 environment necessitates a proactive approach to case management, meticulous risk assessment, robust client advice, and an unwavering commitment to staying abreast of evolving legal interpretations and future procedural developments. The current era demands a more strategic and cautious approach from all parties involved in civil litigation, ensuring that access to justice remains a core principle while navigating the complex and often challenging costs consequences.

Without Prejudice Letter Reveals Fundamental Dishonesty Undermining Claimant’s Case

, , ,

Background

The legal proceedings stem from a road traffic accident that occurred on 20 July 2018, involving Mr Keith Morris, the claimant, who was riding a motorcycle, and Mr William Simon Williams, the defendant, who was driving a vehicle. The accident was initially acknowledged as resulting from the defendant’s negligence, with the fundamental issue being the extent of injuries sustained by the claimant.

The defendant filed an amended defence on 6 April 2023, alleging fundamental dishonesty by the claimant. The defendant contended that Mr Morris had substantially exaggerated the effects and extent of his injuries, supporting this claim with surveillance footage purportedly demonstrating the claimant performing various daily activities inconsistent with his injury claims.

The procedural history reveals a complex legal journey, with the matter coming before District Judge Dodsworth on 22 January 2025. The specific application before the court concerned a Part 18 request and the potential admissibility of a letter dated 12 May 2023, which was marked “Without Prejudice – save as to costs”.

The letter, authored by Minster Law (the claimant’s solicitors), represented a Calderbank Offer attempting to settle the claim. Notably, the offer included a provision for the claimant to admit fundamental dishonesty, but only within the confines of a non-disclosure agreement preventing any public discussion of the case.

Costs Issues Before the Court

The primary costs issue centred on the admissibility of the without prejudice correspondence, specifically whether the letter could be introduced as evidence given its potential demonstration of fundamental dishonesty. The court was required to determine whether the letter fell within the narrow exceptions to the without prejudice rule, particularly the “unambiguous impropriety” exception.

The Parties’ Positions

The defendant argued that the letter should be admitted as evidence because it demonstrated the claimant’s acceptance of fundamental dishonesty. Mr Paul Higgins, counsel for the defendant, referenced previous cases such as Merrill Lynch v Raffa, where without prejudice communications were admitted to prevent potential fraud.

Conversely, the claimant, represented by Mr David Morris, contended that the letter did not constitute a clear admission of fundamental dishonesty. He emphasised the need to construe the unambiguous impropriety exception narrowly, particularly at an interim stage of proceedings, citing authorities including Motorola Solutions Inc v Hytera Communications Corporation and Ocean on Land Technology v Richard Land.

The Court’s Decision

District Judge Dodsworth carefully examined the legal principles governing without prejudice communications, drawing on established precedents such as Rush & Tompkins Limited v Greater London Council and Unilever PLC v The Proctor & Gamble Company.

The judge ultimately determined that the letter did contain a clear admission of fundamental dishonesty. Despite the future-tense language, the court viewed the letter as substantively admitting potential misrepresentations in the claim. Crucially, the judge found that excluding the letter would permit the claimant to pursue a case known to be, at least partially, false.

Applying the unambiguous impropriety exception, the court ruled that the public interest in full disclosure outweighed the protection typically afforded to without prejudice negotiations. The letter was therefore allowed to be adduced as evidence, a decision analogous to the approach in Merrill Lynch v Raffa.

Court of Appeal Clarifies Recovery of Success Fees and QOCS in Hybrid Personal Injury and Media Claims

, , , ,

Background

The case of Birley v Heritage Independent Living Ltd involved an appeal to the Court of Appeal concerning costs issues related to a claim for damages due to alleged breaches of the General Data Protection Regulations (GDPR) and misuse of private information. The claimants, Nathaniel Birley and Virginer Bell, acting as personal representatives of the estate of Ms Rosa Taylor, brought the action against Heritage Independent Living Ltd. The case primarily focused on whether the cost provisions allowing recovery of a success fee and after-the-event (ATE) insurance premium could apply alongside qualified one-way costs shifting (QOCS) in personal injury claims.

Costs Issues Before the Court

The main costs issue before the court was whether QOCS could apply simultaneously with the recovery of a success fee and ATE insurance premium in a claim that included both personal injury and media-related causes of action. Additionally, there were questions about the court’s power to award costs in the context of late service of the claim form and whether the claimants’ conduct constituted an abuse of process, potentially justifying the disapplication of QOCS.

The Parties’ Positions

The appellant, Heritage Independent Living Ltd, argued that the claimants had “cherry-picked” between different pre-action protocols to gain a favourable position on costs. They contended that the claimants’ conduct, including the use of anonymised pre-action correspondence and failure to notify Heritage of the claim’s issue, constituted an abuse of process. The claimants, on the other hand, maintained that their actions did not amount to an abuse of process and that QOCS should apply as the claim included a personal injury component.

The Court’s Decision

The Court of Appeal held that QOCS could indeed apply alongside the potential recovery of a success fee and ATE insurance premium in cases where both personal injury and media-related claims were involved. The court found that the claimants’ conduct, while flawed, did not constitute an abuse of process sufficient to disapply QOCS. The appeal was dismissed, and the costs of the appeal were awarded to the claimants, as they were deemed the overall winners. The court also addressed procedural issues related to the dissolution of Heritage Independent Living Ltd and the involvement of its insurers in the appeal.