A problem to be fixed by somebody, anybody or (nearly) nobody – fixed costs and the Supreme Court

Thu, 07 Oct 2021

The Supreme Court handed down judgment in the case of Ho v Adelekun, limited to the question of whether set off was allowed by a defendant with costs orders in its favour against the cost orders in the claimant’s favour, in this case arising from the settlement of the claim by a Part 36. As the claim settled by a Part 36 there were no ‘judgment’ damages against which the defendant could enforce its costs under the QOWCS regime. The Supreme Court held that the QOWCS regime precluded the right of set off, such that the Claimant was entitled to her costs and damages, whilst the Defendant’s significant costs orders in its favour for the appellate proceedings were, in effect, worthless.

This result has been covered elsewhere by many other practitioners. But another issue arises which should be focused on. Lord Briggs and Lady Rose said this at [9], with my emphasis added:

“We should say at the outset that we doubt the appropriateness of a procedural question of this kind being referred to this court for determination. The very fact that two eminently constituted Courts of Appeal have differed profoundly over the interpretation of a provision of the CPR suggests that there must be an ambiguity which practitioners need to have sorted out. The CPRC exists for the purpose of keeping the CPR under constant review. It is better constituted and equipped than is this court to put right such ambiguities, all the more so where, as here, the outcome is suggested by both parties and by the Association of Personal Injury Lawyers (“APIL”), intervening, to have potentially profound policy consequences for the maintenance of a reasonably fair and level playing field in PI litigation, something which this court is much less well equipped than is the CPRC to assess. Nonetheless, permission having been given, this court must decide the question of construction, leaving it to the CPRC to consider whether our interpretation best reflects the purposes of QOCS and the Overriding Objective, and to amend the relevant rule if, in their view, it does not.”

The fixed costs regime is shortly to be massively expanded, encompassing most cases up to £100,000 in value. Yet fixed costs as they presently exist in personal injury claims contain at least one “ambiguity which practitioners need to have sorted out” 7 years after they were brought into force. The CPRC have very rarely updated the rules, despite the unending skirmishes between claimants and defendants that have bothered the Court of Appeal on numerous occasions and continue to vex practitioners and judges at all levels. Such are the continuing nature and extent of the issues, I have literally written a book on them! (Available from http://www.lawbriefpublishing.com/product/pifixedcosts/)

So, a question arises. If everybody agrees there is an issue, that somebody should fix the issue, that practitioners do not care who fixes the issue so long as anybody does, but nearly nobody does because the Supreme Court think somebody else should have done it, what further problems will we see featuring in the second edition of my book?

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