A defendant who had initiated a counterclaim – and tried to receive the subsequent costs benefits of being a claimant – has lost his argument in the county court.
In Waring v McDonnell, the defendant lost his counterclaim but asserted he was protected by qualified one-way costs shifting and that any costs order against him could therefore not be enforced by the winning claimant.
The litigants had been cycling in opposite directions in West Sussex in June 2016 when they collided head-on. Both sustained injuries and pursued damages, but in September judgment was given for the claimant and the defendant’s counterclaim was dismissed.
Sitting at Brighton County Court, Her Honour Judge Venn rejected the submission that ‘proceedings’, as used in Civil Procedure Rules, should be construed widely enough to give the defendant QOCS protection in the claim.
Deciding otherwise, she said, would create several unjust and inconsistent consequences, not least that insurers of defendants in PI claims would be incentivised to encourage counterclaims for damages knowing there would be no liability for costs. The judge also stated that claimants in RTA claims would be significantly worse off than other claimants with a different PI claim.
‘It would be surprising if any solicitor continued to act once a counterclaim was intimated as they would be unlikely to ever recover any costs,’ added the judge. ‘The Part 36 regime would have no teeth; costs recovery would be limited to the amount of damages recovered in the counterclaim (if any).’
She ruled that the defendant was not an unsuccessful claimant but rather an unsuccessful defendant, and could only be protected by QOCS if it was his own PI claim.
Kevin Latham, of Kings Chambers, who represented the successful claimant, said the ruling expressly disagrees with an earlier judgment of His Honour Judge Freedman in Ketchion v McEwan, which dealt with precisely the same issue.
Latham, who was instructed by Aidan Jones of Alyson France & Co Solicitors, added: ‘Whilst the defendant did not apply for permission to appeal in Waring, this is an important decision on the applicability of the QOCS regime which seems destined to be determined at a higher, authoritative level in the near future, given the existence of two entirely contradictory non-binding decisions.’