Protection rejection: Weightmans defeats costs protection application
This is an important decision about the scope and exercise of the court’s discretion on costs protection in private law proceedings, and in particular…
Swift v Carpenter  EWCA Civ 165
A claimant in a personal injury case to which Qualified One-Way Costs Shifting (QOCS) applies has lost her application for a protective costs order (PCO) in the Court of Appeal proceedings arising from her appeal of one aspect of the first instance award of damages.
The claim arose from a road traffic accident in October 2013 in which the claimant was seriously injured, and following a lengthy High Court trial in August 2018 she was awarded damages of just over £4 million. The judge found that the additional capital cost of the claimant’s required special accommodation would be £900,000 more than the value of her existing home, but feeling bound by the approach approved in Roberts v Johnstone (and so by the then-negative discount rate), the court declined to make any award in respect of the additional capital cost. The claimant appealed that decision, but the appeal was adjourned on its first day (in July 2019), when the Court of Appeal gave permission for extensive expert evidence to be adduced which had not been before the trial judge. The appeal is listed for hearing over four days in March 2020.
The claimant applied for a PCO - in relation to the defendant’s appeal costs incurred after July 2019 - in late November 2019. It was common ground that QOCS attached to this appeal of a claim for damages for personal injuries, so that without the permission of the court, the defendant would be unable to enforce any order for costs in its favour, save to the level of the claimant’s award of damages/interest. The claimant asserted (on the basis of both parties’ costs estimates) that her potential costs exposure would diminish her damages award significantly.
The court refused the application on 6 February 2020, handing down written reasons for the ruling (jointly authored by the three judges, who included the Master of the Rolls) on 20 February. While accepting that the court had jurisdiction to make a PCO in a private case, the case law meant that, as a matter of judicial policy and practice, they should not do so in the present case. Even if the policy did not compel that result, in the exercise of its discretion on the facts, it would not have granted the PCO.
Eweida v BA plc  EWCA Civ 1025 is binding authority that the policy and practice of the courts is that a PCO should not be made in private litigation. Contrary to the second ‘Corner House principle’ which determine PCO applications – after R (on the application of Corner House Research) v Secretary of State for Trade and Industry  EWCA Civ 192 - the claimant “has an overwhelming private interest in the outcome of the appeal, notwithstanding that the outcome may be of wider interest to future litigants in a similar position, insurers and the legal profession. Such wider interest is true of many, if not most, of the appeals in the Court of Appeal in private litigation.” [para. 44]
In any event, on the facts of the instant case, the application would have been dismissed for two principal reasons. First, it was at the claimant’s request that the July 2019 appeal hearing was adjourned, when her advisors recognised that without further evidence, her case on appeal was compromised. Secondly, the court was concerned about the four-month delay from July to November 2019 in making the application, during which period the defendant incurred considerable costs. If a party wishes to have the protection of a PCO, the application must be made as soon as possible as its existence will be highly likely to have a material effect on decisions by the other party as to the incurring of costs and the making of offers of settlement. [para. 49]
In obiter dicta the court noted that the claimant had not sought an order protecting both parties’ costs in the appeal, as contemplated in CPR Part 52.19 - which (as amended since the decision in Eweida) provides that in any proceedings in which costs recovery is normally limited or excluded at first instance, an appeal court may make an order that the recoverable costs of an appeal will be limited to the extent which the court specifies – and in JE (Jamaica) v Secretary of State for the Home Dept  EWCA Civ 192. In any event, the court noted, it was not in issue that the claimant had the benefit of the same QOCS protection that she enjoyed at first instance.
This is an important decision about the scope and exercise of the court’s discretion on costs protection in private law proceedings, and in particular in claims for damages for personal injury to which QOCS attaches.
The defendant is represented by Weightmans (Dave Cottam, Partner, and Marie Wildt, Solicitor) whose in-house Niche Costs team (Andrew Currah and Brian Collins, Costs Lawyers) were also extensively engaged.