Djanogly: QOCS applies to all

Jonathan Djanogly
Tuesday 10 July 2012 by John Hyde

Qualified one-way costs-shifting (QOCS) will apply to all personal injury claimants no matter what their financial means, the Ministry of Justice has confirmed.

In a written ministerial statement today, justice minister Jonathan Djanogly (pictured) said there would be no financial test to determine eligibility. The new costs regime is being introduced as part of the Legal Aid, Sentencing and Punishment of Offenders Act, due to come into force from next April.

QOCS will mean that claimants conducting their case properly do not have to pay towards defendants’ costs if the claim fails. Protection would be lost only if the claim is found to be fraudulent, if the claimant has failed to beat a defendant’s ‘part 36’ offer to settle, or where the case has been struck out where it is an abuse of the court’s process.

Djanogly also confirmed that the MoJ is considering whether QOCS protection should apply to elements of a claim for personal injury pursued for the benefit of a third party.

Under part 36 of the Civil Procedure Rules, there is to be an additional sanction paid where the judgment for the claimant is more advantageous than a defendant’s part 36 offer. This will be calculated at 10% of damages where damages are in issue, and 10% of costs for non-damages claims.

Sanctions will be gradually reduced for claims over £500,000 and there will be only one sanction applicable for split trials.

The rules were drafted following advice from the Civil Justice Council and will be considered by the CPR Committee in the autumn, to come into effect next April.

Comments

Some thoughts

Interesting ideas but this leads to a series of potential consequences - an increase in the number of claims lodged by LiP's, an increase in the number of defendants standing for thier case in person when costs may clearly be not recoverable but more than anything in my opinion to a confusing period as to how do you draw the line between a case properly conducted and one improperly conducted.

How much bearing would following the correct procedural aspect and how much bearing would the merit of the claim have in deciding the proper conduct? Certainly it appears to me that this has to e decided on a case by case basis.

Utter Tosh

Thousands of Claimants (both individuals and small businesses) will be denied access to justice as a result of this Gov not listening. As of April 2013, there will be less access to justice than in 2000. 13 years and 2 steps on (Woolf & CPR), they are forcing us to take 4 giant steps back.

Do you really consider the

Do you really consider the Woolf reforms to be a step forward?

Claptrap

So QOCS will apply to all Claimants irrespective of their financial position, unless they lose their case....

If you're going to screw people at least have the decency to call it what it is!

Is anyone else confused? He

Is anyone else confused? He refers to all 'all Claimants' but as far as I understand the government has specifically told the Civil Justice Committee only to deal with QOCS in relation to personal injury matters.
What about other litigation, actions against the police, defamation or judicial review for example?
ATE recovery has been withdrawn here too but will QOCS apply here as Jackson recommended?

Any information would be greatly appreciated.

The aim of QOCS was supposed

The aim of QOCS was supposed to be to eliminate the need for/reduce the cost of ATE, but as it will not apply to those who fail to beat a Part 36 offer, ATE will still be needed on essentially the same basis as it is now. The only change will be that the Claimant themselves have to pay this cost.

The alternative would be to risk pursuing a claim with no ATE and face having to accept whatever offer the Defendant makes you.

It really seems that no one has thought about what these reforms are trying to achieve or why!

what?

Let me get this right. A Claimant brings a weak claim against an innocent defendant. The claim fails and the innocent defendant is left to pay its own costs. I always thought costs follow the event? What is this all about? Sounds like the bad old days of legal aid in PI where the innocent defendant offered £1,000 (as even if they win at trial they can recover no costs) and had his hand taken off as that meant the try it on Claimant got all of their costs paid. What, really do the Claimants and their costs-motivated ambulance chasing frients have to lose/complain about? Even if you lose you don't pay. Have a go my friend, it's all free (but not for the defendant). Hardly a level playing field my Claimant friends. I can only foresee a huge influx of dodgy claims, paid out as the Defendant will lose even if they win. Total madness.

I think that's why they call

I think that's why they call it 'qualified' one way cost shifting.

Rest assured that with the advent of the LASPO the insurers will be like pigs in the proverbial.

What is Qualified

The point is who decides what "qualifies". In the current market the solicitor reviews a case on merit and decides whether to act on a CFA. ATE insurance then asseses again to ensure it is a viable claim and issues cover. If the case loses the "innocent party" gets their costs paid by the insurance. You have a double layer of vetting by independent parties to decide if the claim should go ahead. Who decides under QOCS? What percentage prospects of success will "qualify" 50? 60? maybe less? Who advises on prospects?

None of this has been thought through and the true victims will be genuine claimants and innocent defendants.

everyone is complaining

Claimants are complaining. Defendants are complaining. Looks like the balance is just about right then.

Nope, no balance at all and

Nope, no balance at all and few Defendants are complaining about the 'package' - it's quite clear that those that have the misfortune to find themselves injured as a result of someone else's stupidity that have been well and truly shafted.

Nonsense. People who have

Nonsense. People who have been genuinely injured will always be compensated. Granted some defendant insurers may mess about a bit before seeing sense but unfortunately chancers and fraudsters have ruined it for everyone.

Of course - that's 100%

Of course - that's 100% correct.

It must be.

I think they could do with your services at the Ministry of Justice (or the Legal Ombudsman, as your arguments are startlingly similar to his).

Clearly as a nation we are wasting too much money on having a court system. After all, we don't need one do we, as insurers ALWAYS pay out compensation when a person has been genuinely injured.

Likewise, the Court of Appeal could cut out a significant amount of its workload, as its services are clearly not needed - after all, the only requirement is to rely on the insurance company.

  • © 2012 Association of British Insurers

I am not suggesting for a

I am not suggesting for a moment that we need to do away with the Court system. The Court system is there for when the parties can't agree and the case genuinely requires judicial intervention, be that as a result of obstinence or lack of prospect of success.

In my experience on both sides of the fence the outcome at Court is more often than not the correct one based on the evidence and no amount of changing the rules is going to affect that. If the Insurance Company has dragged its heels beforehand then they will still be penalised by way of a costs order in the same way that they are now, if anything the difference is that they may be disinterested in fighting the borderline cases for fear of winning but facing substantial costs of their own.

Genuine Claimants are not going to be adversely affected at all in my opinion.

That's assuming that the poor

That's assuming that the poor chap being 'messed about' with by the insurers can find a decent lawyer (and I stress the word decent) willing to take his uncertain claim on.

God forbid if the claim is worth under £5k (or whatever the insurers decide the small claims limit should be) and he will find himself entirely unrepresented.

I dont agree at all. The

I dont agree at all. The Claimant with an uncertain case today will face exactly the same difficulties that the Claimant with an uncertain case will face after the reforms. He still needs to persuade a solicitor that he has a reasonable prospect of success. The only difference is he wont face the risk of the Defendant's costs if he loses after the reforms, ergo its probably more likely that more borderline cases will be brought to trial as being 'worth a punt' without the worry of an adverse costs order or the need for ATE insurance from twitchy providers.

As for the small claims limit, I am in agreement that it doesnt seem overly sensible and will massively impact Judicial time, capacity and patience.

Forget the "dishonest claimant" argument - what about Part 36?

Dear itsgrimupnorth, your faith in the system is touching, but you are overlooking the problem posed when a genuine claimant is faced with a part 36 offer at the very bottom of an extensive bracket and finds they have to accept this lowest possible sum because the consequences of failing to beat it don't bear thinking about. And don't even get me started on defendant representatives who make part 36 offers when the medical evidence isn't even complete, or even available. Genuine claimants will be adversely affected as they will either have to accept low offers, or pay for ATE insurance which isn't recoverable.

In my view no Court in the

In my view no Court in the land would penalise a Claimant for not accepting a Part 36 offer when they simply didnt have the evidence available to make a reasoned decision. Part 36 provides for an application to be made in this circumstances and from a Defendant's point of view I wouldnt even run the argument. Any sane Judge would send me packing with my tail between my legs.

Pre-med offers are a handy tactic to persuade a Claimant to take the money and run but in any event the Defendant has no entitlement to costs pre-issue and its rare that a claim is issued without medical evidence available. As for a Part 36 Offer at the bottom end of the bracket then ATE will still be required when a Part 36 is made so a Defendant will be less likely to make a rubbish offer. If the offer made is not reasonable then the Claiamnt has no fear of rejecting it. If the offer is made in bad faith (and I cant see how a pre-med offer made Part 36 is anything other) then I can see the Court awarding the ATE premium. I think you wil see more Calderbank pre-med offers to still try and tempt the more settlement-minded Claimant.

I seriously think these reforms are good for Claimants and Defendants in equal measures... lets face it we all eat from the same trough so what damages Claimant firms damages Defendant firms equally. The bunting is definitely not up on either side.

Really?

You are fortunate in your experience of meeting only sane judges then. Exactly this scenario has happened to me. I have no doubt that it will happen again, and who am I to risk my clients own money in the belief that "it will all come out in the wash"?
You are right, most issued claims have medical evidence available - but it may not be a final prognosis. The expert says "I really need to see this client again 6 months post the forthcoming surgery". The defendants make a ball park offer. I say to my client, "Sorry, can't really advise you properly, but the risk if we reject and then 6 months down the line realise we should have accepted is all yours". Excellent news for claimants, as you suggest.

P.S. Are you J Djangoly going

P.S. Are you J Djangoly going incognito?

darn you Julie, I have been

darn you Julie, I have been unmasked.

My reforms are coming and theres nothing you can do about it

*skips into the sunset laughing madly*

itisgrimonthiswebsitethatreal

itisgrimonthiswebsitethatreallyshouldgetapasswordforsolicitorsonly.
"Claimants are complaining. Defendants are complaining. Looks like the balance is
just about right then". said "grimupnorth". I thought this comment was satirical in nature and eluded to Mr Sampson's comments on another article..... and I hate to admit it but I found "grimupnorth's" comments funny ....in a perverse sort of way - of course.

But I also think that if 'someone' said words to the effect that 'you should grow up' on a bulletin board that the person who complained (and consulted a Solicitor - presumably for defamation) about the comments should have been told by the Solicitor that: 'you should grow up and I will, under no circumstances, and no matter how much you pay me, progress such a claim for you'.

And I also don't understand how an application for Planning Permission can result in fees in excess of £200,000 and I also don't understand many things in the legal world. But I really do think you should get a password on your site because as the current 'Laws?' stand I am really worried that I might loose my house for 'defamation'.....well I really mean speaking the truth....and you all sound quite crazy anyway.....but why wouldn't you be as the 'Law' stands.

That deals with the LIP point

That deals with the LIP point quite nicely.

"That deals with the LIP

"That deals with the LIP point quite nicely". What do you mean by that?

Sorry,I feel really mean in

Sorry,I feel really mean in saying that 'all of you sound crazy anyway' although I am sure that you don't care anyway but I don't really think you all sound crazy.....just some of you.

The ministerial statement

The ministerial statement does not either follow Jackson recommendations or the what is envisaged in the LASPO Act.

Jackson, at p425 of his report follows the opinion of judges that the extra 10% of damages (or costs in a non-damages claim) should only apply when a claimant betters his own offer, not that of the defendant. It is that scenario that is also provided for at s55 of the Act. I therefore have doubts as to the accuracy of the Ministerial Statement.

The disproportionate consequences strengthen that view as what is said in the WMS does not encourage a claimant to make a reasonable offer but simply punishes a defendant, possibly up to £75,000, for missing its offer by as little as £1.

I know I am a bit late in

I know I am a bit late in this debate but I am a Claimant lawyer and I cannot see what all the fuss is about. Maybe I have totally misunderstood the proposals but at present I have to assess the chances of success to see if it is worth bringing a claim. If the case is borderline I may want to pursue it, but unless I jump through the hoops of instructing Counsel and pandering to an ATE insurer's whims I will not be able to because there is too much risk to my client. As we speak I have a couple of cases vaguely only half-heartedly supported by Counsel which ATE providers have refused to fund.

In the new regime if my client has only a marginally acceptable case not only do I not have to worry about there being any consequences for him if he loses but I do not even need to get a written Advice or approach an insurer to fund it. I can tell my client, "you will probably lose but let's have a go". The only risk is that I do not recover my disbursements but I can still insure that if I really want to.

On the Defendant side the insurer/Solicitors is left saying "hang on, so this Claimant has an absolutely rubbish case and even if I prove that at trial and win I will gain nothing at all for my client but will still have to bill them for the work?".

Does that not mean that an insurer has an incentive to settle absolutely every claim because it is cheaper to do that than Defend it successfully to a trial? The only caveat is if a Part 36 offer is made but as mentioned above, if a crappy case results in any offer at all then happy days for the Claimant. The Part 36 thing doesn't seem much different than now anyway; if you get a reasonable offer early on and fail to beat it the Claimant's damages will almost certainly be totally wiped out by the adverse costs order, except in very high value cases, and the ATE insurer will refuse to pay out on the basis that the offer was unreasonably rejected.

I see a world of increased litigation with no risk, more frequent insurance payouts, and big rewards for Claimant lawyers willing to have a go. Surely the Government has to raise the small claims limit just to put a stop to all that? Now then that will be bad.

Here endeth the rant.

Correction published today

Just as a quick addition, the MoJ today published a correction to the announcement, which can be found at this link: http://www.parliament.uk/business/publications/hansard/commons/todays-written-statements/