The Government has announced there is to be no means test to benefit from qualified one-way costs-shifting (QOCS).
In a statement to Parliament last week that followed advice given by the Civil Justice Council, justice minister Jonathan Djanogly said there will also be no minimum payment required of a losing party.
He said QOCS protection will be lost if the claim is found to be fraudulent on the balance of probabilities; the Claimant has failed to beat a Defendant’s part 36 offer to settle; or the case has been struck out where the claim discloses no reasonable cause of action or where it is otherwise an abuse of the court’s process (or is otherwise likely to obstruct the just disposal of the proceedings).
Mr Djanogly added that QOCS protection will apply in relation to claims that are discontinued during proceedings (subject to the fraud exception) and for all appeal proceedings “as the requirement for permission to appeal controls unmeritorious appeals”.
Part 36 will override QOCS, but only up to the level of damages recovered by the claimant. There is to be an additional sanction of 10% of damages (or 10% of costs for non-damages claims) where judgment for the claimant is more advantageous than a defendant’s part 36 offer. This will be subject to a tapering system for claims over £500,000 so that the maximum sanction is likely to be £75,000. Also, there will only be one sanction applicable for split trials.
The minister said the Ministry of Justice is still considering the practicality of QOCS protection not applying to elements of a claim for personal injury that are pursued for the benefit of a third party, such as a property damage insurer or a credit hire provider.
As revealed by the Master of the Rolls, Lord Neuberger, in May, the new rule on proportionality has been agreed by the Civil Procedure Rule Committee. “The senior judiciary are considering revisions to the Costs Practice Direction to give effect to the new rule,” Mr Djanogly said.
He concluded: “Changes to the Civil Procedure Rules will be considered by the committee in the autumn, in order for the necessary changes to come into effect for April 2013.
“The Ministry of Justice will continue to engage with key stakeholders throughout the implementation stage and will also work closely with the senior judiciary on other aspects of Lord Justice Jackson’s reforms, which are due to come into effect at the same time.”
Law Society president Lucy Scott-Moncrieff said: “It’s good that the government has listened to the concerns expressed by solicitors QOCS law costs draftsman.
“The mooted means test applied to the new qualified one-way costs shifting rules, introduced into personal injury cases by the Jackson reforms, would have undermined the logic of the reforms and been an administrative nightmare.
“It might have led to further litigation about the scope of the rules themselves. Our Law costs draftsman also took the view that access to justice would not be served by claimants having to make a minimum payment on losing a case.
“The society welcomes the government’s decision to amend their original proposals and looks forward to continued collaboration with the Ministry of Justice and the Civil Justice Council in the implementation of the rest of the civil justice changes.”