THE EFFECT OF QOCS ON LITIGATION: HERE’S THE THING: CASES WILL BE FOUGHT ON THEIR MERITS

There has been much debate about the impact of QOCS on litigation. To date much of this has, inevitably, been speculative. However it is worthwhile reading George Riley’s article, Fundamental dishonesty and litigation in the post-Jackson landscape.  This shows, honestly and clearly, the thinking behind the defendant’s stance in a case that – pre QOCS – would have settled.

“I got the impression that the claimant solicitors expected a ‘drop hands’ offer at the very least, but we decided not to make any offers.”

THE CASE

Mr Riley reports on a case or Mark Ryan -v-Amey PLC. The defendant’s case was that the claimant had deliberately slammed on his brakes to cause a crash.  However there were none of the usual signs of a dishonest claimant. No claims history; the claimant had attended his GP and physiotherapy and was not “over-egging the pudding”.

PRE QOCS AND POST QOCS: AN INTERESTING ANALYSIS

This is the most telling observation.

“I have dealt with cases of a similar nature for a number of years, including prior to the dramatic and controversial changes which Jackson introduced.  Pre-Jackson, there was a real risk that certain claimant firms would submit an inflated cost schedule with the added concern of a 100% uplift.  This meant that more often than not a sensible and commercial decision would be made to settle on best possible terms – even if there were concerns about the claim.  Alternatively a protective and tempting Part 36 would be put on the table in order to give the defendant a security blanket should the matter proceed to trial.”

However post QOCS:

” …we decided to run the case to trial as the fixed costs regime meant the financial risk in proceeding was a risk worth taking”

THE RESULT AT TRIAL

That decision was justified. The claimant was found to have applied his brakes deliberately and the claim dismissed. A finding of “fundamental dishonesty” was made and the claimant was ordered to pay the costs.

THE LESSON: DON’T START WHAT YOU CAN’T FINISH

The important point here is that the commercial realities of litigation are changing in a fundamental way.  Defendants can, and are, making different decisions under the fixed costs/QOCS regime.

  • Claims will now be litigated on their merits, with defendants less concerned about a draconian costs order.
  • Claimants should only start cases that they are prepared to take all the way to trial.  Last minute settlement may be less common.

EXPLAINING THIS TO THE CLIENT

Most cases settle. However it is now less likely that cases of a certain type will settle. Particularly those where a defendant suspects fraud or wrong-doing.  This emphasises the importance of taking a full statement from the client. Assessing credibility (which is not easy) and explaining the risks of litigation to the client, including the risk of a finding of fundamental dishonesty.

RELATED POSTS ON QOCS

RELATES POSTS ABOUT WITNESS CREDIBILITY

One comment

  1. Rob Pettitt · · Reply

    In my view a claim can be run by a claimant in one of two primary ways. (1) On the basis that a settlement will be achieved. (2) One the basis that the claim will got to trial.

    Traditionally, both ways had their advantages.

    With the introduction of QOCS and the abandonment of necessity in the assessment of the proportionality of costs there most viable way of conducting a claim is on the basis that the claim will go to a trial.

    The difference between the approaches may seem conjured up and minute. But the reality is that they are very different in terms of the costs that are incurred and where they are incurred. The former is reactive and latter is pro-active.

    Doing work reactively is fine if the defendant is pragmatic. If not, additional costs will be incurred (that may be difficult to justify on a paper assessment). Furthermore, a reactive approach potentially saves costs for a defendant (e.g. can deny a claim without filing a defence and without obtaining expert evidence).

    By acting purely pro-actively a claimant controls the pace of the claim, incurs the minimum costs to trial, puts pressure on a defendant with those justifiable costs and puts pressure on the defendant to incur his own irrecoverable costs. Settlement is treated as a bonus rather than the aim.

    The pro-active approach flies in the face of ADR, but the rules encourage the claimant to act pro-actively and the defendant to give it a whirl.

    Arguably, the government has increased court fees (with plans for further increases) to either deter the sort of litigation that the rules encourage or to capitalise on it.

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