In edition 247 of BC Disease News (here), we reported on the personal injury case of Ketchion v McEwan (2018). Here, the court interpreted CPR 44.13 in such a way that a Part 20 (counterclaiming defendant) claimant benefitted from qualified one-way cost shifting (QOCS) in the main action. In this article, we examine a more recent personal injury ruling, which contradicts the finding in Ketchion, i.e. Part 20 claimants are not afforded QOCS protection.
FACTS OF THE CASE
Waring v McDonnell (Brighton County Court, 2018) concerned a head-on road traffic collision between cyclists. The claimant brought a claim for damages for personal injury and the defendant counter-claimed for injuries sustained.
On 25 September 2018, Her Honour Judge Venn gave judgement for the claimant and dismissed the defendant’s counterclaim. The issue of costs was adjourned until October 2018.
WHAT ‘PROCEEDINGS’ ENGAGE QOCS PROTECTION?
Pursuant to CPR 44.13(1), QOCS protection applies to claims for damages for personal injury. Protected parties, under CPR 44.14(1), can only have costs enforced against them up to the value of damages and interest made in their favour. However, consistent with CPR 44.13(2), 'claimants' also include any person that brings a ‘counterclaim or an additional claim’.
Do the civil procedure rules therefore bestow upon counterclaiming defendants, or Part 20 claimants, the opportunity to rely on QOCS in ‘one set of proceedings’ (the claimant’s claim)?
Case law has shed some light on the issue.
Wagenaar v Weekend Travel Ltd  EWCA Civ 1105
In the Wagenaar case, Vos LJ interpreted the meaning of ‘proceedings’, for the purpose of CPR 44.13(1):
‘In my judgment, the proper meaning of the word “proceedings” in CPR Pt 44.13 has to be divined primarily from the rules on QOCS themselves. The whole thrust of CPR rr 44.13 to 44.16 is that they concern claimants who are themselves making a claim for damages for personal injuries, whether in the claim itself or in a counterclaim or by an additional claim (as defined in CPR r20.2(2)) ...
It is true, however, that the word “proceedings” in CPR r 44.13 is a wide word which could, in theory, include the entire umbrella of the litigation in which commercial parties dispute responsibility for the payment of personal injury damages. I do not think that would be an appropriate construction. Instead, I think the word “proceedings” in CPR r 44.13 was used because the QOCS regime is intended to catch claims for damages for personal injuries, where other claims are made in addition by the same claimant ...
Thus, in my judgment, CPR r 44.13 is applying QOCS to a single claim against a defendant or defendants, which includes a claim for damages for personal injuries or the other claims specified in CPR r 44.13(1)(b) and (c), but may also have other claims brought by the same claimant within that single claim ... CPR r 44.13 is not applying QOCS to the entire action in which any such claim for damages for personal injuries or the other claims specified in CPR r 44.13(1)(b) and (c) is made’.
Cartwright v Venduct Engineering Limited  EWCA Civ 1654
In edition 239 (here), we reported that BC Legal had successfully established that costs orders can be enforced against claimants, up to the level of damages received from another defendant, in a noise-induced hearing loss (NIHL) case.
Proceedings were issued against 6 defendants. The claim in negligence against 2 defendants was compromised by discontinuance by consent; another defendant received a discontinuance by notice; and the remaining 3 defendants made a full and final settlement, by Tomlin order.
At the Court of Appeal, Coulson LJ found that the defendant, for whom BC Legal acted, could not enforce their costs against a Tomlin order, but could hypothetically enforce their costs against a judgment awarded against another defendant.
The fact that QOCS applied where there was mixed success meant that ‘proceedings’ encapsulated the defendant parties to the claim.
PART 20 CLAIMANT SUCCESS ON QOCS
Does the word ‘proceedings’ encompass both the claimant’s claim and the defendant’s counterclaim, or does a Part 20 claim constitute ‘separate proceedings’, outside of the main claim?
Ketchion v McEwan (Newcastle County Court, 28 June 2018)
As discussed in the introduction, this question was answered in the case of Ketchion, by His Honour Judge Freedman. Prior to the September County Court hearing, permission was given for parties to file written submissions which contemplated the impact of Cartwright. At paragraphs 21 to 23 of his judgment, HHJ Freedman explained:
Until the judgment in Cartwright was handed down, it seemed to me that, it was at least arguable that it would be possible to divide up proceedings into, on the one hand, a claim and, on the other, a Part 20 claim, i.e. two sets of proceedings, albeit that the decision in Howe tended to suggest otherwise. However, in the light of the decision in Cartwright, it seems to me that proceedings must be given a wide definition’.
Accordingly, I accept the submission, without hesitation, that it would be patently absurd and illogical if the word proceedings is deemed to cover all of the claims brought against six separate defendants, but not a claim and Part 20 claim, both of which arise out of the same accident and are joined in one action. Whilst, on one view, it may seem unjust that the defendant can avoid payment of costs in the main action, purely as a result of bringing Part 20 proceedings for damages for personal injuries, it seems to me that that is an inevitable result of the wording of CPR44.13 and 44.14 ... if the intention was to limit a Part 20 claimant’s protection in costs, such would have been expressly set out in the rules’.
‘In my judgment, therefore, the proper interpretation of CPR 44.13 is that the reference to proceedings is to both the claim and the counterclaim; and that since it is expressly stated that a Claimant includes a person who brings a counterclaim/additional claim, it follows that the Defendant/Part 20 Claimant has the protection of QOCS’.
THE ADJOURNED WARING HEARING ON COSTS
Arguments Raised by the Parties
At the October County Court hearing, submissions on costs were considered. The defendant contended that the claimant could not recover his costs for succeeding at trial, because he too was entitled to QOCS protection, arising out of the claimant’s claim.
HHJ Venn summarised the defendant’s argument, as follows:
‘The emphasis ... is on protecting a claimant who brings a claim, including when they are a counterclaimant, because whilst they are a defendant to the claimant’s claim, they are nevertheless also a claimant’.
Ultimately, the defendant submitted that the ‘status of a litigant’ can be important. In this instance, it was averred that the act of characterising an order for costs against the defendant as if they were acting in their ‘capacity as a defendant’, rather than a Part 20 ‘claimant’, was ‘artificial’.
Instead, the defendant relied on HHJ Freedman’s analysis, in Ketchion (discussed above).
Whereas, counsel for the claimant deliberated that the word ‘proceedings’, in CPR 44.13(1), should be construed ‘narrowly’ to exclude counterclaimants from asserting QOCS protection.
It was submitted that Cartwright should be distinguished against Waring, as the claimant had ‘no control’ over the fact that a counter-claim was brought. Conversely, in Cartwright, the claimant had ‘control’ over the number of defendants pursued.
In addition, it was argued that Ketchion was ‘not binding’ and was ‘wrongly decided’.
Firstly, HHJ Venn hypothesised the implications of a defendant bringing an ‘additional claim’, e.g. a counterclaim against the claimant, within the scope of CPR 20.2(2) and 20.3(1):
‘... in this case there were two claims; the first claim was the claim brought by the claimant against the defendant; the second claim was the additional claim brought by the defendant against the claimant, where the defendant was Part 20 claimant and the claimant was Part 20 defendant. Applying Wagenaar, the QOCS regime protects each of the claimants in the two claims in this case as follows:
- the claimant, in the claim in which he claims damages for personal injury against the defendant;
- the defendant, in the additional claim, in which he counterclaims damages for personal injury against the claimant’.
Having identified that ‘the word “proceedings” is often used interchangeably with the word “claim” in the CPR’, HHJ Venn reasoned that ‘“proceedings” in CPR 44.13 means the claim or the counterclaim; it does not mean the entire action, including the claim, the counterclaim and all the parties’.
Consequently, the judge did not follow HHJ Freedman’s approach in Ketchion. She considered that he ‘did not appear to have the benefit of the full argument’ and was wrong to use Cartwright to extend the scope of QOCS:
‘I do not accept the submission ... that the effect of Cartwright is that the word “proceedings” in CPR 44.13 must be construed more widely, so as to give the defendant QOCS protection in the claim he is defendant in’.
HHJ Venn rationalised that the judge in Ketchion incorrectly viewed ‘the claim against six defendants in Cartwright as six separate claims’ in ‘one set of proceedings’. By this analogy, he determined that ‘two separate claims (a claim and a counterclaim) must also be one set of proceedings for the purposes of CPR 44.13’.
Alternatively, HHJ Venn elucidated that ‘the claim brought by Cartwright against six separate defendants was not six separate claims for the purposes of the QOCS regime; it was a single claim against a number of defendants (as envisaged by Vos LJ in Wagenaar)’.
As a result, QOCS protection was engaged in Cartwright because there was a single claim for damages arising out of a single injury’. Moreover, the defendants were not Part 20 claimants:
‘It is obvious that the defence of a personal injury claim is not itself a personal injury claim ...’
Accordingly, HHJ Venn concluded, at paragraph 46, finding in favour of the claimant:
‘The defendant in this case was not an unsuccessful claimant in the claimant’s claim for damages for personal injury (he was not a claimant at all in the claimant’s claim for damages for personal injury); he was an unsuccessful defendant (and an unsuccessful claimant in his counterclaim for damages for personal injury). He only has the protection of the QOCS regime in respect of his claim for damages for personal injury and does not benefit from it in the claimant’s claim for damages for personal injury’.
The defendant has not elected to appeal the decision.
In summary, HHJ Venn did not follow Ketchion because HHJ Freedman inaccurately described a multi-defendant personal injury claim as a single set of proceedings, comprising of multiple claims. A personal injury claim brought against multiple defendants is a single claim in a single set of proceedings.
As a result, HHJ Freedman’s decision to interpret a claim and a counterclaim as a single set of proceedings, on the basis of his inaccurate understanding of multi-defendant claims, was flawed. The Court, in Waring, interpreted that a counterclaim (for personal injury or otherwise) is separate from a claimant’s personal injury claim and therefore constitutes separate proceedings.
Until binding judgment is entered, there is conflicting case law at County Court level over whether Part 20 claimants can rely on QOCS protection which in personal injury proceedings.
Full transcription of the Waring judgment can be accessed here.