Kerry Underwood

CREDIT HIRE, QOCS AND NON-PARTY COSTS ORDERS

with 3 comments


See my book on Qualified One-Way Costs Shifting, Section 57 and Set-off available for £25.00 on Amazon here.

In Select Car Rentals (North West) Ltd v Esure Services Ltd [2017] EWHC 1434 (QB)

the High Court upheld the decision of the first instance judge to award costs against the Credit Hire Company in a lost personal injury claim, where the claimant was protected by Qualified One-Way Costs Shifting and where there was no finding of fundamental dishonesty or anything else which would displace the normal QOCS rule.

Here the personal injury claim brought by three claimants included a claim for £23,456.85 for money due under Car Hire Agreements in relation to a car with a pre-accident vale of £1,710.00.

In fact the First Claimant had purchased a replacement car nine weeks after the accident but allowed her boyfriend to continue using the cars provided under credit hire until the boyfriend himself was involved in an accident.

The claims were lost, but no finding of fundamental dishonesty was made and the claimants therefore had the protection of Qualified One-Way Costs Shifting.

The successful Defendant sought and obtained an order for costs against the Credit Hire Company, Select Car Rentals, who were not a party to the case.

Thus the order was made under Section 51 of the Senior Courts Act 1981.

Even if a Non-Party Costs Order, or Wasted Costs Order is made, the starting point in a personal injury claim is that order cannot be enforced against the claimant unless one of the exceptions to Qualified One-Way Costs Shifting apply.

The relevant exception here is that the proceedings included a claim which is made for the financial benefit of a person other than the Claimant, that is the Credit Hire Company.

The Practice Direction in relation to Qualified One-Way Costs Shifting specifically lists claims for credit hire examples of claims made for the financial benefit of a person other than the claimant.

In an important statement the High Court Judge said:

“The fact that any given credit hire organisation’s connection with a claim is no greater than is commonly the case does not, without more, provide it with an automatic immunity from a Non-Party Costs Order. There is no room for the argument that it is a prerequisite to the making of such an order that such involvement be exceptional.”

Thus the starting point now is that in any unsuccessful personal injury claim involving credit hire a Costs Order can be made against the Credit Hire Company and enforced.

In fact the judge here appears to have confused the jurisdiction under Section 51 of the Senior Courts Act 1981 and Qualified One-Way Costs Shifting.

What CPR 44.16(2) in fact says is:

“Orders for costs made against the claimant may be enforced to the full extent of such orders with the permission of the court, and to the extent that it considers just, where –

(a) The proceedings include a claim which is made for the financial benefit of a person other than the claimant or a dependant within the meaning of Section 1(3) of the Fatal Accidents Act 1976 (other than a claim in respect of the gratuitous provision of care, earnings paid by an employer or medical expenses)…”

Thus if the proceedings include a claim which is made for the financial benefit of a person other than the Claimant, then the position is that the court may allow the successful Defendant to enforce the full order for costs made against the Claimant.

It needs to be remembered that in a Qualified One-Way Costs Shifting case that the order against an unsuccessful Claimant is made in the usual way.

What is different is that unless certain exception apply that order cannot be enforced against the Claimant.

Because the claim is for the financial benefit of a person other than the Claimant, that alone should not and cannot justify a Non-Party Costs Order.

What it does is to allow the order made against the Claimant, but generally unenforceable, to in fact be enforced with the permission of the court and to the extent that the court considers it just.

CPR 44.16(3) does allow the court, subject to CPR 46.2, to make an order for costs against a person other than the Claimant, for whose financial benefit the whole or part of the claim is made.

The judge here did correctly state that CPR 44.16(3) is not an exception to the QOCS regime as QOCS only protects Claimants and not non-parties.

CPR 46.2 is the CPR dealing with Non-Party Costs Orders and reads:

“46.2 – (1) Where the court is considering whether to exercise its discretion under section 51 of the Senior Courts Act 1981 (costs are in the discretion of the court) to make a costs order in favour of or against a person who is not a party to the proceedings –

a) That person must be added as a party to the proceedings for the purposes of costs only; and

b) He must be given a reasonable opportunity to attend a hearing at which the court will consider the matter further.”

Thus CPR 44.16(3) allows a Non-Party Costs Order to be made in a QOCS case but subject to the CPR 46.2 procedure being followed.

As I have previously observed the logic of CPR 44.16(3) is that anyone whose expenses form part of the special damages claim in a personal injury action is exposed to a potential Costs Order.

That is reinforced by the fact that CPR 44.16(2)(a) specifically protects those for whom a claim is made in respect of the gratuitous provision of care or earnings paid by an employer or medical expenses, which obviously means that all other special damage recipients are not so protected.

The bombs in the minefield of Qualified One-Way Costs Shifting are beginning to go off.

PS

 I particularly enjoyed paragraph 27 of Mr Justice Turner’s decision:

“I note that the authors of “Costs Funding following the Civil Justice Reforms: Questions and Answers” 3rd Edition conclude:

“Whether the working of CPR 44.16(3) (and CPR 44 PD 12.5) is intended to and does in any way relax the established common law as to the circumstances in which a third party costs order is available is a moot point and will no doubt be argued in due course.”

Having thus raised the question, however, the authors, perhaps counter-intuitively given the name of their publication, declined thereafter to venture an answer.”

 

Also see:

KERRY ON QOCS: BOOK UPDATE AND LINKS: UNIFIED

QOCS, APPEALS, SET-OFF & KAFKA

QOCS, PART 36, TWO DEFENDANTS: SOME PROBLEMS

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Written by kerryunderwood

July 14, 2017 at 8:21 am

Posted in Uncategorized

3 Responses

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  1. Reblogged this on | truthaholics and commented:
    “I note that the authors of “Costs Funding following the Civil Justice Reforms: Questions and Answers” 3rd Edition conclude:

    “Whether the working of CPR 44.16(3) (and CPR 44 PD 12.5) is intended to and does in any way relax the established common law as to the circumstances in which a third party costs order is available is a moot point and will no doubt be argued in due course.”

    Having thus raised the question, however, the authors, perhaps counter-intuitively given the name of their publication, declined thereafter to venture an answer.”

    truthaholics

    July 14, 2017 at 9:11 am

  2. Hello again
    I have had a case with a firm of solictor on a no win no fee accident was on 11/2/2011 case was ongoing for past 6 yrs was coming up for settlement last year and other side offer 15.0000 in Jan 2016 my solicitor said not to accept and gave an estimate that I could get 82 thousand pounds the other side did surveillance in march 2016 where they saw I did few things but couldn’t see or mention my limp when walking or see pain medication had increase at the same time pain management doctor advised to do more which I did and had to attend my doctors and hospital 3 times at same time surveillance was done where the activities I did effected so bad
    Despite giving solicitor proof of this she did not want to contest and advised to accept offer of 150000 and that late acceptance charge may be asked for by other side
    I wanted to go court let judge decide but she advised not to and accept late offer
    I felt they did this worried they would lose their fees
    They have been paid their fees and 150000 was kept to wait for other side costs part 36 which now almost year later they want 160000 which means I get nothing
    There has been no dishonesty I have had operation and still to date under consultation at hospital and continue to have disabilities caused by accident
    I cannot find anyone who will help me start case against solicitors for negligence
    Please can you advise me
    I have made complaint to ombudsman not had a response as yet
    I would appreciate any advise please
    Thank you
    Kind regards
    Taslim’s m mahoney

    Taslim mahoney

    July 14, 2017 at 9:47 am

  3. I will email you.

    kerryunderwood

    July 14, 2017 at 10:16 am


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