Qualified One Way Costs Shifting Applies To Detailed Assessment Proceedings

Challis v Bradpiece [2024] EWHC 1124 (SCCO) involved a personal injury claim arising from clinical negligence. The claimant, Sharon Challis, brought a claim against the defendant, Howard Bradpiece. The case settled by way of a Tomlin order, with the defendant accepting the claimant’s Calderbank offer. Under the terms of the settlement, the claimant was entitled to her costs.

As the costs could not be agreed between the parties, the matter proceeded to a detailed assessment before Deputy Costs Judge Roy KC in the Senior Courts Costs Office. The assessment could not be completed within the allocated one day, so the parties agreed the judge should determine the outstanding issues on the papers.

Chronology of Key Events

• The claimant brought a personal injury claim against the defendant arising from clinical negligence.
• The claim settled by way of a Tomlin order, with the defendant accepting the claimant’s Calderbank offer.
• Under the settlement, the claimant was entitled to her costs from the defendant.
• The parties could not agree on costs, so the matter proceeded to a detailed assessment before Deputy Costs Judge Roy KC.
• The detailed assessment hearing took place on 25 May 2023 but could not be completed in the allocated one day.
• The parties agreed the judge should determine the outstanding issues on the papers.
• After a delay due to administrative errors, the judge determined the outstanding issues.
• The judge then asked the parties to either agree consequential matters or identify any disputed consequential matters to be determined on the papers.
• The parties made written submissions on disputed consequential matters.
• The claimant failed to beat the defendant’s Part 36 offer, entitling the defendant to a costs order in his favour in respect of the costs of the detailed assessment.

Issues to be Decided

The key issue to be decided by the court was whether the qualified one-way costs shifting (QOCS) regime applies to detailed assessment proceedings.

Specifically, the question was whether detailed assessment proceedings fall within the scope of CPR 44.13(1)(a), which provides that QOCS applies to “proceedings which include a claim for damages…for personal injuries”.

If detailed assessment proceedings are covered by this provision, then QOCS would preclude enforcement of the defendant’s costs order from the detailed assessment against the claimant. If detailed assessment proceedings are not covered, then QOCS would not apply and the defendant could enforce his costs order.

The judge noted this was a difficult point of statutory construction that had not been previously decided. The parties made extensive written submissions putting forward arguments on both sides of the issue.

Parties’ Positions

The defendant argued that detailed assessment proceedings do not fall within CPR 44.13(1)(a) and therefore QOCS does not apply. His key arguments included:

• A detailed assessment is a distinct proceeding, not a continuation of the personal injury claim.
• As a matter of ordinary language, a detailed assessment is not a claim for damages for personal injury.
• Interpreting QOCS as covering detailed assessments would be contrary to the legislative intent and would make defendant Part 36 offers largely toothless.

The claimant argued that detailed assessment proceedings do fall within CPR 44.13(1)(a) and therefore QOCS does apply to preclude enforcement of the defendant’s costs. Her main arguments included:

• The term “proceedings” in CPR 44.13(1)(a) has been interpreted broadly by the courts to give effect to the purpose of QOCS.
• If QOCS did not apply, it could leave a claimant with a net liability for the defendant’s costs, contrary to the purpose of QOCS.
• There is prima facie binding authority that detailed assessments are not standalone proceedings.
• The lack of any explicit exclusion for detailed assessments, in contrast to the specific exclusion for pre-action disclosure applications, indicates they are intended to be covered.

Decision

The judge found that the term “proceedings” in CPR 44.13(1)(a) should be interpreted broadly and purposively to give effect to the purpose of QOCS:

“Case law has established that the term “proceedings” as used in the QOCS rules does not bear this natural meaning in its full sense. It requires some qualification in this context in order to give effect to the purpose of the QOCS regime. Thus it does not apply to a claim made by a defendant to a personal injury claim against a third party or against another defendant for contribution (Wagenaar v Weekend Travel Ltd [2014] EWCA Civ 1105; [2015] 1 WLR 1968) or to a counterclaim against a personal injury claimant (Day v Bryant [2018] EWHC 158 (QB)). These qualifications are appropriate because such claims or counterclaims have nothing to do with the purposes of the QOCS regime, which are, first, to promote access to justice in personal injury cases by removing the deterrent of potential liability for a defendant’s costs and, second, to deter frivolous personal injury claims.” [22]

“… the term “proceedings” in CPR 44.13 refers to all of the claims made by a claimant against a single defendant, when one such claim is a claim for personal injury. Thus, in a mixed claim case, QOCS applies pursuant to the basic rule in CPR 44.14, unless one of the exceptions in CPR 44.15 or CPR 44.16 applies.” [26]

He considered that if QOCS did not apply to detailed assessment proceedings, it could leave a claimant with a net liability for the defendant’s costs, contrary to the purpose of QOCS:

“If QOCS did not apply to DA proceedings a claimant could be left with a net liability for the defendant’s costs. That would be completely contrary to the purpose of QOCS… Such an interpretation would go wholly against the grain of the Supreme Court decision in Ho v Adelekun supra at [37-41].” [52/53]

The judge noted prima facie binding authority confirming that detailed assessments are not standalone proceedings:

“There is prima facie binding authority confirming that DAs are not standalone proceedings. See Serbian Orthodox Church – Serbian Patriarchy v Kesar & Co [2021] EWHC 1205 (QB) at per Foxon J at [56].” [55]

There was a dispute between Mr Latham and Mr Hogan as to whether the service of notice of commencement of costs assessment proceedings was to be equated with service of originating process for the purposes of CPR 6.15. Mr Hogan pointed to the fact that CPR 47.6 refers to “commencement of detailed assessment proceedings” and sets out how the “detailed assessment proceedings are commenced”. I accept that the detailed assessment of costs is a distinct phase of the proceedings, with a distinct process for commencement. However, I do not accept that this is equivalent to the commencement of originating process. By the time costs are assessed, in personam jurisdiction over the defendant has long been established, and the defendant has been fully engaged in the proceedings. The commencement of “detailed assessment proceedings” is the next step in the proceedings, which a defendant against whom an adverse costs order has been made should be expecting. I accept that the service of notice of commencement bears some resemblance to the commencement of a claim, in that a failure to respond in time can generate a default liability, but that is also true of a failure to serve a defence in response to particulars of claim. For these reasons, I have approached the Appellant’s application under CPR 6.15 on the basis that the particular considerations engaged by applications relating to the service of originating process do not apply.

However:

“…it seems to me that this is per incuriam. The court’s attention was not drawn to the rules that:

(a) DA proceedings have their own strict jurisdictional gateway, namely a costs order or proof of a deemed costs order; PD47 13.3, Bayliss v Powys [2021] EWHC (QB). The fact that the court has jurisdiction over a party for the purposes of substantive proceedings does not by itself provide any jurisdiction in respect of DA proceedings.

(b) By CPR 46.14 there can be jurisdiction for the purposes of DA proceedings even in the absence of any substantive proceedings.” [56]

The judge concluded that the lack of any explicit exclusion for detailed assessments, in contrast to the specific exclusion for pre-action disclosure applications, supports the claimant’s interpretation:

“The specific and explicit exception for pre-action disclosure juxtaposed with the lack of any such exception for DAs support this. If the intention had been to exclude DAs as well as PAD applications, the rules would and could have said so. CPR 47.20(7) provides that: “For the purposes of r36.17 (costs consequences of failing to beat a part 36 offer following judgment), detailed assessment proceedings are to be regarded as an independent claim.” This suggests that DA proceedings should not be regarded as a separate claim for other purposes.” [57/58]

He acknowledged that the defendant’s interpretation accords better with a purely grammatical construction of the rules. However, he considered that a purposive approach was required:

“I acknowledge that, leaving such matters aside, the defendant’s interpretation accords better with a purely grammatical construction of the rules. However, it would not be appropriate to leave these matters aside. Per Lord Burrows in Hassam & Anor v Rabot & Anor [2024] UKSC 11; [2024] 2 WLR 949 at [11] “the modern approach to statutory interpretation requires the courts to ascertain the meaning of the words used in the light of their context and the purpose of the provisions“.” [69/70]

The judge ultimately concluded that QOCS does apply to detailed assessment proceedings and precluded enforcement of the defendant’s costs order in this case However, given the difficulty of the issue, the judge granted the defendant permission to appeal:

“For reasons which will be apparent from my analysis above, this is a point where the test for permission to appeal is very clearly met. I therefore grant the defendant permission should he wish to pursue the point further.” [74]