‘QOCS – Jacob Corstorphine V Liverpool City Council  EWCA Civ 270
Qualified One Way Cost Shifting (QOCS) was introduced as part of the LASPO reforms 2012 however did not come into effect until 1st April 2013. It means that a losing Claimant will not be responsible for the Defendant’s costs, providing that there has been no dishonesty on the part of the Claimant.
The interpretation of QOCS provisions was brought into the spotlight recently in the case of Jacob Corstorphine -v- Liverpool City Council .
The case involved the Claimant who had been injured on what he claimed to be a dangerous tyre swing in a playground. Liverpool City Council was the occupier of the playground and therefore owed a duty of care to the Claimant under section 2 of the Occupiers Liability Act 1957.
The Claimant instructed his solicitors to represent him in relation to his claim for personal injury against the Defendant in August 2012. The Claimant entered into a Conditional Fee Agreement, more commonly known as a “no win no fee” agreement. The Claimant also took out an After the Event Insurance Policy to protect him from the Defendant’s costs in the event that his claim failed.
In November 2012 the Claimant’s solicitors issued Court proceedings against the Defendant following a breakdown in negotiations. The Defendant proceeded to issue a Counter Claim against a Second Defendant who had designed the tyre swing and a Third Defendant who had sold the tyre swing to Liverpool City Council.
The case proceeded to Trial and the Court dismissed both the Claimant’s claim and the First Defendant’s counter claim. The Court held that QOCS did not apply to the Claimant and ordered that he be liable for the First, Second and Third Defendants costs.
An appeal was made by the Claimant on the basis that the Judge had made a mistake in finding that the Claimant’s Pre Commencement Funding Agreement (a conditional fee agreement entered into before April 1st 2013) included the counter claim brought against the Second and Third Defendant, and that the Judge had made a mistake in finding that the First Defendant was entitled to recover their costs.
The issue to be considered was the meaning of ‘the matter that is the subject of the proceedings in which the costs order is to be made’. Did the ‘matter’ mean the claim for damages for PSLA made against the First Defendant, or did it mean the fundamental dispute, which was the claim as a whole and therefore included the secondary claim made against the Second and Third Defendant.
The Appeal Court noted that when QOCS came into force, the Claimant had no vested rights or expectations in respect of the claims made against the Second and Third Defendant, the Claimants only expectation was against the First Defendant. When the funding agreement was entered into, the sole claim was against the First Defendant and that was the underlying dispute and therefore QOCS should have been applied in relation to the claims made against the Second and Third Defendant.
The Appeal Court also found that the Trial Judge had made an error when exercising the Courts discretion, depriving the Claimant of the costs protection afforded by QOCS. There was also Court of Appeal authority which distinguishes between costs relating to a Claimants claim and cost relating to a third party claim when it comes to QOCS.
The outcome of this case provides guidelines for the interpretation of QOCS when considering whether a Claimant who entered into a Pre Commencement Funding Agreement in relation to a personal injury claim will be afforded the benefit of QOCS when there are additional claims within the proceedings. The Courts will now consider whom the Claimants vested rights and expectation was against and consider the word ‘matter’ to relate to the underlying dispute arising from the original claim.