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In this week’s Dekagram we consider recent cases which raise
some urgent questions around how the QOCS and whiplash tariff
systems are working. And speaking of urgent questions, we encourage
readers to get their questions on health tourism and cross border
clinical negligence ready – for on Wednesday Dominique Smith
and Travlaw’s Matt Gatenby will be rolling up their sleeves and
answering them – use this link to register for what will be an
informative discussion.
Can claimants afford to get cold feet when skating on
thin ice? Costs consequences and QOCS protection on
discontinuing
With the recent cold snap, and with rising fuel costs, this
article considers whether QOCS protection will keep warm the wallet
of a claimant who gets cold feet.
The judgment handed down last week by the Court of Appeal in
Excalibur & Keswick Groundworks Ltd v Michael McDonald
[2023] EWCA Civ 18 makes clear that it will.
The claim
- The claimant claimed for personal injury. His case was that
during the course of his employment he had been on a ladder that
had slipped, causing him to sustain injury. - The defendants asserted that a mobile scaffolding tower had
been provided for use by its employees and that the use of ladders
was forbidden. - Inconveniently for the claimant, his medical records contained
an entry suggesting that he had tripped on a pavement, while
another entry stated that he had fallen from scaffolding. - Awkwardly for claimant counsel, the District Judge listed to
hear the trial had read the papers and, on the morning of trial,
raised the inconsistency between the medical records and the
claimant’s case. - The District Judge asked claimant counsel if the claimant
wanted to consider his position. Understandably he did. After
taking time, the claimant served Notices of Discontinuance. - Entirely understandably, the defendants, who had incurred the
expense of defending the matter to trial, only for the claimant to
get cold feet, applied to set aside the Notices of Discontinuance,
to strike out the claim on the grounds that the claimant’s
conduct had obstructed the ‘just disposal of the
proceedings’, with the consequence that the claimant would not
then be entitled QOCS protection and would have to pay their
costs.
Decision at First Instance
- The District Judge, on noting the discontinuance at
‘the eleventh hour and fifty nineth minute’,
stated that the inevitable outcome of the claimant’s conduct
was to increase costs and take up Court time and resources; such
conduct did indeed obstruct the just disposal of proceedings. - The District Judge set aside the Notice of Discontinuance and
did not allow the Claimant QOCS protection.
Decision of the Court of Appeal
- The Court of Appeal however disagreed, stating:
Setting aside a Notice of Discontinuance
- CPR 38.2(1) gives a claimant a right to discontinue all or part
of a claim ‘at any time‘ by serving a
Notice of Discontinuance, subject to limited exceptions. - Whilst a defendant can apply to have a Notice of Discontinuance
set aside, (CPR 38.4), the court needs ‘powerful
reasons‘ to do so, with evidence of the abuse of the
court’s process or egregious conduct of a similar nature being
required. - The approach is no different in a personal injury claim to
which QOCS applies. - In this case the claimant had, (following the intervention of
the trial Judge and no doubt legal advice from his counsel),
recognised the inconsistencies in his case, weighed up his
prospects of success, and decided to discontinue. - This did not provide the ‘powerful reasons’ upon which
a Notice of Discontinuance could or should be set aside. - Of note, the defendants did not allege that the claimant was,
or might be, fundamentally dishonest.
Strike Out
- The bar to striking out a Statement of Case is a high one: A
court may strike out a Statement of Case if it appears that it is
‘an abuse of the court’s proceeding or is otherwise
likely to obstruct the just disposal of the proceedings’,
(CPR 3.4(2)). - The essence of strike out being that a claimant must be guilty
of misconduct which is so serious that it would be an affront to
the court to permit him to continue to prosecute his claim. - In the present case, the question to be answered was
‘is the litigant’s conduct of such a nature and degree
as to corrupt the trial process so as to put the fairness of the
trial in jeopardy?’ - The claimant’s conduct did not begin to meet the
seriousness which is envisaged in this formulation. - The material inconsistency in the claimant’s account did
not demonstrate a determination by the claimant to pursue
proceedings with the object of preventing a fair trial. - Whilst it was ‘regrettable’ that consideration
by the claimant of his differing accounts had not taken place
earlier, the defendant had been in possession of such accounts and
could have applied for summary judgment. Had the defendant
successfully obtained summary judgment, the claimant would still
have been entitled to QOCS protection.
QOCS Protection
- The QOCS regime ‘represented a major departure from the
traditional principle that costs follow the event’,
providing that, ‘subject to limited exceptions’, a
claimant in a personal injury claim can commence proceedings
knowing that if they are unsuccessful, they will not be obliged to
pay the successful defendant’s costs. - It is only if a case has been struck out that the removal of
QOCS protection by reason of the claimant’s conduct under CPR
44.15(c) becomes engaged. - The defendants had effectively sought to remove the protection
afforded by the ‘broad-based and mechanical provisions of
the QOCS scheme’. They had failed.
Conclusion
It’s easy to have sympathy for the defendants’ plight,
but this case makes clear that such sympathy is misplaced, for the
present at least, as the QOCS system is i) broad-based, ii)
mechanical, iii) represents a major departure from the traditional
position that costs follow the event, and iv) designed to introduce
a bar against enforcement of costs orders made against claimants
should their claims fail.
In short QOCS means that claimants who get cold feet after
skating on thin ice can still keep a warm wallet.
About the Author
Rob Horner was called in 1999 and is ranked by Chambers &
Partners and the Legal 500 as a leading personal injury junior. He
acts for both Claimants and Defendants in all claims involving
personal injuries, including complex cross border claims raising
questions of applicable law. He also has extensive experience of
representing interested parties at inquests.
A mixed reaction to mixed injury claims
Back on 19th May 2021, I presented a Webinar on the
incoming whiplash reforms, and concluded with a meme of the
ill-fated Eddard Stark from Game of Thrones staring into the
distance with the phrase “judgments are coming” plastered
over his head.
Hate to say I told you so.
The combined appeals of Rabot and Briggs are
in my view just the beginning. Where claims are brought involving
tariff and non tariff-applicable injuries, the judgment leaves
scope for further argument as to the correct approach. Given that
there are 24,000 claims being made monthly in the Portal, and 91%
of the claims are being fronted by lawyers, it is almost inevitable
that further appeals will be made to gain clarity.
The law
For those less familiar with the new system, the law is
eloquently set out in the judgment itself at paragraphs 7-14 of the
judgment; (See https://www.bailii.org/ew/cases/EWCA/Civ/2023/19.html).
The facts
Rabot involved whiplash and injuries to both knees.
Award at first instance:
- Tariff award: assessed at £1,390;
- Non-tariff award: assessed at £2,500
- Global award: The Judge added the two figures and ‘stepped
back’ to reach total award of £3,100.
Briggs involved whiplash and injuries to the elbow, hip
and knee. Award at first instance:
- Tariff award: assessed at £840;
- Non-tariff award: assessed at £3,000;
- Global award: £2,800.
The approaches to quantifying mixed claims
As set out in the judgment, there are four possible approaches
to assessing quantum in cases involving tariff and non tariff
injuries:
- Make a tariff award for the whiplash injury – then a
conventional award for the other injuries – then aggregate
the two awards: A + B= C; - Make a tariff award for the whiplash injury – then a
conventional award for the other injuries BUT then apply totality
and discount for overlap (the approach taken at first instance): A
+ B = a bit less than C; - Make the tariff award the starting point – then treat all
PSLA common to both tariff and non-tariff injuries as fully
compensated for by the tariff award, meaning only a small extra
amount would be appropriate for any additional PSLA caused solely
by that injury: A + (B-A) = a bit more than A; - Make an award of PSLA which “reflects the combined
effect” of the tariff and non-tariff injuries, with the
non-tariff award reflecting the totality of any overlap between the
PSLA: B + (A-B) = who knows.
But which one to take?
The judgment
LJ Davies was clear that the Civil Liability Act (‘the
Act’) was not intended to, and does not, change the method of
assessing general damages for non-whiplash claims – that
of:
- collating the awards for the various aspects of injury by
reference to the Judicial College Guidelines; and then, - stepping back from the original figures obtained (following the
approach in Sadler v Filipiak [2011] EWCA Civ 1728).
In fact, it was noted that section 3(8) of the Act mirrors the
words used in Sadler – that the award must
“reflect the combined effect of all the injuries upon the
injured person’s recovering quality of life…”
The rhetoric of the Claimant receiving a windfall from this
approach was said to have been depressed by the value of the PSLA
awarded in the tariff – which, it is quite clear, provides
far lower levels of award than based off the Judicial College
Guidelines.
To be clear, the correct approach is thus:
- assess the tariff award;
- assess the non-tariff award;
- step back, as per Sadler.
The only additional consideration is that the final award cannot
be less than would be awarded for the non-tariff injuries if that
had been the only injury suffered.
Rabot remained as before. Briggs was adjusted
because of the additional consideration as follows:
- Tariff award: maintained at £840;
- Non-tariff award: maintained at £3,000;
- Global award: On stepping back, increased to £3,500 from
£2,800 at first instance.
The dissent
Defendant insurers will, understandably, feel hard done by at
this decision. Their ill feeling will only be bolstered by the
dissenting judgment of the Master of the Rolls.
In both cases it was argued that the Claimants had:
- not suffered any loss of amenity from the non-tariff injury;
and - not suffered any non-tariff injury that was longer lasting than
the whiplash injury.
It was further argued that Parliament had, through section 3 of
the Act, legislated to reduce general damages for non-tariff
injuries where whiplash had been sustained, despite not being
specific on this issue.
Any insurer considering taking a further case to appeal should
be mindful of the pre-emptive defence of the leading ruling of LJ
Stuart-Smith. The interpretation of sections 3(1) and (2) in
particular are defended, along with pointing towards the legal
policy set out by LJ Davies. The judgment makes clear that only
Parliament can make the 2018 Act apply to non-tariff injuries.
The future
In my view, the points raised by the Master of the Rolls are
likely to lead to a future appeal in circumstances where the loss
of amenity suffered because of a non-tariff injury is more nuanced
than in Rabot and Briggs.
For example, what if you have:
- a whiplash injury that resolved in 13 months leading to an
award of £2,040 under regulation 2(1)(a); and - a non-tariff injury, say a minor head injury, which resolves in
a few weeks falling into the JC Guidelines at about
£2,210.
In this scenario, does the minor head injury cause any loss of
amenity separate from or additional to the whiplash? If it
doesn’t, how does the Court deal with the fact that the
prognosis for the minor head injury is far shorter than the
whiplash injury?
Following Davis LJ’s approach, you would:
- add £2,040 (tariff award) to the £2,210 (non-tariff
award) = £4,250; - then step back to arrive at a global award of, say,
£3500.
Following the Master of the Rolls’ approach, you would:
- Take the £2,040 (tariff award)
- Completely ignore the valuation for the minor head injury
(non-tariff) as it has caused no separate loss of amenity. - Arrive at a global award of £2,040 – £1,460 /
42% less than Davis LJ’s approach.
The Master of the Rolls’ approach would, however, be subject
to the additional consideration set out by LJ Davies noted above,
that the final award cannot be less than would be awarded for the
non-tariff injuries if that had been the only injury suffered, such
that the £2,040 would need to increase to the level of the
non-tariff award of £2,210.
For those of you who like SATS level maths, this argument will
no doubt cause endless fun. As I said at the outset: Judgments are
coming!
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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