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Brian Kite v The Phoenix Pub Group: Addressing the Opportunistic Use of QOCS - Theo Barclay, Hailsham Chambers

11/11/15. In this county court decision, a district judge made it clear that claimants who intend to bend the qualified one-way costs shifting (QOCS) rules to gain tactical advantage will be offered short shrift by the courts. This decision is a good illustration of the increasing tendency of district judges to tackle opportunistic conduct by court users robustly.

As is well known, under QOCS defendants will be ordered to pay the costs of successful claimants but, unless exceptions apply, will not recover their costs if the claim is successfully defended. A costs order will be made, but it will not be enforceable.

Claimants have inevitably attempted to push the boundaries of QOCS, however. This has left district judges to deal with innovative and bold attempts by claimants to deploy the -already very claimant-friendly - provisions to their advantage.

Brian Kite v The Phoenix Pub Group is a good example of this. In this case the claimant issued proceedings for injuries he suffered in the Defendant pub car park. The defendant’s position was that a different company owned the pub at the date of the accident, so they could not be liable for the injuries suffered. The claimant served proceedings at the pub’s address. After receiving no reply, default judgment was entered.

The defendant then made an application to set aside default judgment because service was defective and an application to strike out the claim as there were no reasonable grounds for bringing it. At the hearing of the applications, the judge set aside default judgment under the mandatory grounds set out at r13.2 of the Civil Procedure Rules. The hearing of the strike out application adjourned to allow the claimant time to prepare for it. Importantly, the district judge made an order that the claimant should pay the defendant’s costs of the hearing.

The claimant’s solicitors then wrote to the defendant’s solicitors and reminded them that, as the case was subject to QOCS, the costs order that had been awarded could not be enforced. In response, the defendant’s solicitors argued that CPR 44.15 had to be considered. CPR 44.15 states that the effects of QOCS are disapplied if a case is struck out as the claimant has disclosed no reasonable grounds for bringing the proceedings. The defendant argued that the case would be struck out at the next hearing, and, as a result, they would be able to enforce their existing costs order any further costs orders.

The claimant’s response was to attempt to discontinue the claim to avoid it being brought within the CPR 44.15 exception, as the case would have been discontinued before it was struck out. The plan was to allow the claimant to retain the benefit of QOCS and, consequently, to render the previous costs order unenforceable and avoid a further one.

The defendant applied to the court for an order that set aside the claimant’s notice of discontinuance. In the hearing of that application, the defendant argued the courts should not tolerate or condone the claimant’s behaviour. They reasoned that the claimant had opportunistically sought to manipulate the QOCS provisions to achieve a tactical advantage that frustrated the purpose of those provisions.

The district judge duly used the courts’ general case management powers to set aside the notice of discontinuance. He said he was guided by the overriding objective, and noted that it would not be in the interests of justice to allow the claimant to benefit from their opportunism. In the circumstances of the case, it was clear that the claimant should not be entitled to the protection of QOCS. The court could not condone the pursuit of poor claims that are then promptly discontinued after there have been cost orders once it became clear that the claim will be struck out.

The district judge proceeded to strike out the claimant’s case and award the defendant costs of the hearing. Pursuant to the exception at CPR 44.15, QOCS was disapplied and the defendant could enforce both their costs orders.

It is suggested that the approach taken in this case would be taken by other district judges – although it does not, of course, bind them. Further, there will inevitably be other innovative and opportunistic attempts to manipulate the new QOCS rules while they are in their infancy.

Claimant solicitors should note that claimants will likely not retain the protection of QOCS if claims that have no merit are discontinued. Judges will, as in this case, take a dim view of attempts to abuse the QOCS regime for tactical advantage and will not hesitate to utilise their case management powers to block similar behaviour. 

Theo Barclay
Hailsham Chambers

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