The qualified one-way costs shifting (QOCS) rules which commenced on 01 April 2013 provided a bona fide that the losing claimant would not have to bear the defendant’s costs, other than in a small set of circumstances.
Amendments to the QOCS rules at CPR 44.14 come into force for all personal injury and clinical negligence claims issued on or after 06 April 2023. These changes will allow defendants to enforce costs orders made in their favour against cost orders made in favour of claimants. Defendants will also be able to enforce costs orders up to the aggregate amount in money terms of any settlement, including cases concluding by way of acceptance of Part 36 offers and Tomlin Orders.
The effect of this new rule is reversal of the decisions in Cartwright v Venduct Engineering Ltd (2018) – which precluded enforcement in cases where settlement had been agreed rather than the court ordering an award of damages, and Ho v Adelekun (2021) – which precluded the offset of costs against costs.
Whilst defendant settlement offers would have been carefully considered and advised upon prior to this amendment, there is no denying that defendant Part 36 offers are now likely to have far more influence post CPR 44.14 amendment, given that adverse cost orders are now more likely to be enforceable.
There is a greater need for strong ATE protection and it is good to hear that BTE insurers such as ARAG plc have published today their commitment to cover these potential adverse cost orders with no intended increase on premiums for new policies.