PERSONAL INJURY: QOCS, S.57 and 10% UPLIFT
The issues raised in this blog are dealt with in Kerry’s course Qualified One Way Costs Shifting and Jackson Update – book here.
Type of work
The current Qualified One Way Costs Shifting scheme covers all personal injury work without exception, but nothing else. All relevant cases, irrespective of the parties’ financial circumstances, are covered.
CPR 44.13 states:
“(1) This Section applies to proceedings which include a claim for damages –
(a) for personal injuries;
(b) under the Fatal Accidents Act 1976;
(c) which arise out of death or personal injury and survives for the benefit of an estate by virtue of section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1934,
but does not apply to applications pursuant to section 33 of the Senior Courts Act 1981 or section 52 of the County Courts Act 1984 (applications for pre-action disclosure), or where rule 44.17 applies.
(2) In this Section, “claimant” means a person bringing a claim to which this section applies or an estate on behalf of which such a claim is brought, and includes a person making a counterclaim or an additional claim”.
Section 57 applies “on a claim for damages in respect of personal injury” and by Section 57(8) “personal injury” includes any disease and any other impairment of a person’s physical or mental condition;”
Personal injury is not defined in the Civil Procedure Rules dealing with Qualified One Way Costs Shifting but CPR 2.3(1) provides that “a claim for personal injuries” means proceedings in which there is a claim for damages in respect of personal injuries to the claimant or any other person or in respect of a person’s death, and “personal injuries” includes any disease and any impairment of a person’s physical or mental condition.
Section 57(8) of the Criminal Justice and Courts Act 2015 uses exactly the same definition as CPR 2.3(1):
“”personal injury” includes any disease and any other impairment of a person’s physical or mental condition;”
Employment Tribunals have the power to award damages for actual personal injury arising out of discrimination, including physical, but more typically psychological, injuries, see for example Vento v Chief Constable of West Yorkshire Police (No 2)  IRLR 102 Court of Appeal. The ordinary civil courts have the same power in relation to discrimination in non-employment fields, such as the provision of services. Actual injury cases in the Employment Tribunal and in civil court discrimination cases would appear to be covered both by QOCS and Section 57 insofar as relevant, but in fact is it is not as simple as that.
In the civil courts the matter appears relatively straightforward – actual injury claims will be covered.
However the position in Employment Tribunals is less clear. There are generally no costs in Employment Tribunals and therefore nothing to shift. They are governed by entirely different costs rules and the Civil Procedure Rules dealing with QOCS – CPR 44.13 to CPR 44.17 – have no application.
Thus I am satisfied that QOCS does not apply to Employment Tribunal cases involving actual injury, let alone injury to feelings.
However on the face of it Employment Tribunal proceedings are capable of coming within section 57(1)……”proceedings on a claim for damages in respect of personal injury…..”.
As we have seen the duty under section 57(2) to dismiss the claim “includes the dismissal of any element of the primary claim in respect of which the claimant has not been dishonest”. (Section 57(3)).
So, exaggerate your client’s future loss of earnings claim and the safest case will be dismissed in its entirety if there is a personal injury element.
Is a safe unfair dismissal claim lost because of exaggeration of future loss if there is a personal injury claim for discrimination included, even though there is no exaggeration in relation to the personal injury element? The answer appears to be yes, just as an ordinary personal injury claim is lost in its entirety if, for example, the credit hire claim is exaggerated.
Injury to Feelings
Is injury to feeling s species of personal injury? Does it involve impairment of a person’s mental condition?
Shorter Oxford English Dictionary
No definition given.
- Make less effective or weaker; devalue, damage, injure.
- Become less effective or weaker; deteriorate, suffer injury or loss.
- One that has been impaired.
- Of the driver of a vehicle or driving; adversely affected by alcohol or narcotics.
The action of impairing, or fact of being impaired; deterioration, injurious lessening or weakening.
To make worse, less valuable, or weaker; to lessen injuriously; to damage, injury.
Rendered worse; injured in amount, quality or value; deteriorated, weakened, damaged.
Roget’s Thesaurus gives the following alternative for “impair”:
Damage, harm, diminish, reduce, weaken, lessen, decrease, blunt, impede, hinder, spoil, disable, undermine, compromise, threaten.
Roget’s Thesaurus gives the following alternatives for “impaired”:
Disabled, handicapped, incapacitated, debilitated, infirm, weak, weakened, enfeebled, paralysed, immobilised.
Roget’s Thesaurus gives the following alternatives for “impairment”:
Disability, handicap, abnormality, defect, deficiency, flaw, affliction, disadvantage, problem.
Those definitions seem to me to be potentially wide enough to cause injury to feelings to amount to an impairment of a person’s mental condition and thus to bring injury to feelings into the sphere of QOCS protection.
Injury to feelings awards are usually in the Employment Tribunal. There costs do not follow the event and thus QOCS is of no application, for the reasons set out above.
However injury to feelings awards are also made in the County Court where costs do follow the event; discrimination in relation to the provision of services is a County Court, not an Employment Tribunal matter.
My view is that the court could legitimately decide the issue of whether injury to feelings is a species of personal injury either way, although it is significant that the word “injury” is used.
Employment Tribunals have the power to award damages for actual personal injuries arising out of the discrimination, including physical, but more typically, psychological injuries. These are generally awarded under the “injury to feelings” ahead of damages. The appellate courts have frequently said that there is no fine line between actual psychological injuries and injuries to feelings.
For example, in Birmingham City Council v Jaddoo UKEAT/0448/04/LA
the Employment Appeal Tribunal referred to “the inevitable overlap between injury to feelings and psychiatric damages…..” (Paragraph 31).
In Vento v Chief Constable of West Yorkshire Police (No 2) IRLR 102 the Court of Appeal said that tribunals should have “……regard…..to the overall magnitude of the sum total of the award for compensation for non-pecuniary loss made under the various headings of injury to feelings, psychiatric damage and aggravated damages” such that “in particular, double recovery should be avoided by taking appropriate account of the overlap between the individual heads of damage”.
In HM Prison Service v Salmon  IRLR 425 the Employment Appeal Tribunal said that it is “necessary to stand back and consider the non-pecuniary award as a whole”.
On balance my view is that injury to feeling should be classed as a species of personal injury and that cases involving claims for injury to feelings should attract the protection of Qualified One Way Cost Shifting in the civil courts, but not in Employment Tribunals.
In Timothy James Consulting Ltd v Wilton  IRLR 368 EAT
the Employment Appeal Tribunal overturned the decision of the Employment Tribunal that had made an award of £10,000.00 for injury to feelings but had then grossed it up to take into account income tax at the rate of 40% and thus awarded £16,666.00.
There was no dispute that £10,000.00 was the correct figure; the issue was whether it should be grossed up to take into account tax and thus the real issue was whether injury to feelings awards are taxable.
Historically it had always been assumed that such awards were free of income tax and the current legislation is the Income Tax (Earnings and Pensions) Act 2003 and section 406 provides:-
“This Chapter does not apply to a payment or other benefit provided—
(a) in connection with the termination of employment by the death of an employee, or
(b) on account of injury to, or disability of, an employee.”
This replaced, and is a similar wording to, section 148 of the Income and Corporation Taxes Act 1988.
Here the Employment Appeal Tribunal carried out an exhaustive analysis of the authorities.
The Employment Appeal Tribunal said that the reasoning of the Employment Appeal Tribunal in the case of Orthet Ltd v Vince-Cain  IRLR 857 EAT was persuasive and was preferable to a decision in the First Tier Tribunal (Tax Chamber) in Moorthy v Commissioners for HM Revenue and Customs  IRLR 4 UKFTT which had held that awards for injury to feelings were taxable.
Consequently the Employment Appeal Tribunal held that injury to feelings awards are not taxable and therefore reduced the award back to £10,000.00.
It was a necessary part of the reasoning here, and in the Orthet case, that “injury” could include the concept of injury to feelings.
This reasoning was necessary because of the wording of section 406 set out above which exempts payments made “on account of injury to, or disability of, an employee”.
There is no reference there to injury to feelings and therefore to come within that definition the Employment Appeal Tribunal here and in Orthet held that “injury” includes injury to feelings, or to put it another way injury to feelings is a species of personal injury itself.
Thus here the Employment Appeal Tribunal, at least equal in standing to the High Court, held that injury to feelings Is an injury.
However the feedback that I am getting from practitioners in discrimination cases in the civil courts is that those courts are not treating injury to feelings as personal injury and thus are not providing QOCS protection.
In Black v Arriva North East Limited  EWCA Civ 1115
the Court of Appeal rejected an application for a costs capping order.
Here, the appellant appealed against a judgment in a disability discrimination case but had not taken out a sufficient level of After-the-Event insurance before such insurance became unrecoverable by virtue of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. Thus any fresh premium, to cover the increased level of cover required, would not be recoverable.
Consequently the appellant sought to have Arriva’s costs capped at £50,000.00.
The Court of Appeal pointed out that this would now apply to all new cases as a result of Parliament ending recoverability of After-the-Event insurance premiums by means of LASPO 2012.
“So the argument could be raised in any appeal brought in respect of a case under that Act. Such a result is difficult to square with the indication in the Practice Direction that an order for costs capping should only be made in exceptional circumstances” (paragraph 12).
The Court of Appeal also pointed out that it is not a function of costs capping orders to remedy the problems of access to finance for litigation. “If for instance, the respondent’s costs were agreed to be proportionate, it would not be possible to exercise any jurisdiction to make a costs capping order simply because without it the appeal would not continue to be financially viable.”
That is because CPR 3.19(5) (b) only allows a costs capping order if “there is a substantial risk that without such an order costs will be disproportionately incurred;”
There were other fact- specific reasons for refusing a costs capping order in this case but they do not establish any new legal principles.
Interestingly one of the submissions made in favour of a costs capping order, but rejected, was that there was a lacuna in the law in that Qualified One-Way Costs Shifting applied in personal injury cases but not Equality Act cases. As this is a disability discrimination claim in relation to the provision of services one would expect damages for injuries to feelings to be available. The issue as to whether such damages are in fact damages for personal injuries, and thus covered by QOCS, does not appear to have been considered in this case.
“Another factor was that the potential subject of the Costs Capping Order – Arriva – had already incurred vastly more costs than £50,000.00 prior to the application being made and therefore the Costs Capping Order would have been retrospective:-
“The effect of what I have described is that by the time of the application, the major part of the solicitor’s costs of the appeal had been incurred. The effect of the order sought would, therefore, be that the Respondents will have already spent what is, if the costs capping order is made, in substance a budget laid down by the court without knowing that it had to stick to that insofar as it sought to recover its costs. In principle, the person who is the subject of the costs capping order ought, so far as possible, to know the budget to which he must work in advance.” (Paragraph 25).
QOCS protection is of no relevance in Employment Tribunals, neither in relation to actual injury or injury to feelings.
Applies to actual injury cases in civil courts arising out of discrimination.
May apply to injury to feelings cases in civil courts arising out of discrimination. – see the discussion of what is “injury” in Timothy James Consulting Ltd v Wilton  IRLR 368 EAT.
Appears to apply to actual injury cases in Employment Tribunals arising out of discrimination.
May apply to injury to feelings cases in Employment Tribunals – see the discussion what is injury in Timothy James Consulting Ltd v Wilton  IRLR 368 EAT.
Logically, in relation to injury to feelings awards, either both section 57 and QOCS apply in the civil courts or neither do. The Simmons v Castle  EWCA Civ 1039 10% uplift is subject to different reasoning, which I now consider.
Simmons v Castle 10% uplift
Actual injury awards in the civil courts attract the Simmons v Castle  EWCA Civ 1039 10% uplift.
The situation in relation to injury to feelings awards in the civil courts is unclear, “general damages” awards attract the uplift and that is obviously a wider definition than “personal injury”. My view is that injury to feelings awards being “general damages” do attract the 10% uplift in the civil courts. That does not throw any light on the issue of whether injury to feelings is a species of personal injury.
In Employment Tribunals the position is even more complicated.
There remains the issue of whether injury to feelings awards in Employment Tribunals attract the 10% uplift. Let us assume, as must be the case, that such awards are general damages and thus, on the face of it, attract the uplift. Why is there any doubt?
In Chawla v Hewlett Packard Ltd  IRLR 356 EAT
the Employment Appeal Tribunal held that the 10% uplift under Simmons v Castle  EWCA Civ 1039 did not apply to injury to feelings awards nor actual personal injury awards in Employment Tribunal cases as the rationale does not apply as successful claimants do not generally recover their costs in Employment Tribunal cases.
The case was unusual in that an award for actual injury, as well as injury to feelings, was made. The EAT quoted from paragraph 15 of that judgment where Lord Judge, the Lord Chief Justice said:-
“15. Thirdly the increase we are laying down… is attributable to the forthcoming change in the civil costs regime initiated by Sir Rupert as an integral part of his proposed reforms which were unconditionally endorsed and supported as such by the judiciary publicly, and it was plainly on the basis that the 10% increase would be formally adopted by the judiciary that the 2012 Act was introduced and enacted.”
Here the EAT points out that Employment Tribunal claims are not included on the list of specific types of litigation dealt with in the report.
At paragraph 91 of the judgment the EAT says:-
“The rationale for the uplift… does not apply to litigation in the ET. Accordingly the 10% uplift decided upon in that case does not apply to increase guidelines in cases on injury to feelings in discrimination cases in ET’s.”
This is in conflict with two previous decisions of the Employment Appeal Tribunal:-
Ozog v Cadogan Hotel Partners Ltd  EqLR 691 EAT and
The Sash Window Workshop Ltd v King  IRLR 348 EAT
In Ozog the point was conceded but the EAT said that the concession was rightly made. In The Sash Window neither of the advocates nor the judge appeared to have a clue as to what the Simmons v Castle uplift was about, with references to inflation, the inflation uprating in Da’ Bell v NSPCC  IRLR 19 EAT and that Simmons v Castle was decided because the level of general damages was generally low. The Judge herself refers to the Da’ Bell v NSPCC inflation uplift as being 4 years old at the time of the hearing here.
The discussion and judgment on this point in The Sash Window are woeful.
Chawla is a much better reasoned decision and in my view is correct.
It is also in conflict with the Presidential Guidance 2014 which makes specific reference to the Vento guidelines on injury to feelings as having been updated by Simmons v Castle at paragraphs 13 and 14 which state:-
“13…tribunals may award a sum of money to compensate for injury to feelings…
- They follow guidelines first given in Vento v Chief Constable of West Yorkshire Police, which have since been updated by Da’ Bell v NSPCC and Simmons v Castle, but are still referred to as the “Vento” Guidelines.”
A previous decision of the Employment Appeal Tribunal took the same line as the EAT here –
Pereira de Souza v Vinci Construction UK Ltd UK EAT/0328/14, unreported
Leave to appeal to the Court of Appeal has been given in Pereira.
|DOES QOCS APPLY||S.57||10% UPLIFT|
|Personal injury civil claims||yes||yes||yes|
|Personal injury Employment Tribunal claims||no||yes||?|
|Injury to feelings civil claims||?||yes||yes|
|Injury to feelings Employment Tribunal claims||no||yes||?|