Introduction
The case of PME v The Scout Association and Bolt Burdon Kemp LLP [2023] EWHC 158 (SCCO) dealt with issues related to enforcing adverse costs through a non-party costs order (NPCO) against a claimant’s solicitors.
As it stands, the application of QOCS usually prevents defendants from enforcing their entitlement to costs against a claimant if the matter settles before trial.
That was the position in this case, as without the permission of the court, the Defendant had no means of recovering from the Claimant the costs which the Claimant was ordered to pay. The Defendant confirmed that it had no intention of attempting enforcement against the Claimant and instead an application was made by the Defendant to seek to enforce their costs orders against the Claimant’s solicitor.
The Law
The operation of the QOCS rules, as clarified by Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654 and Ho v Adelekun [2021] UKSC 43 (On appeal from: [2020] EWCA Civ 517) confers an indirect benefit upon any solicitor acting under a “CFA lite” or capped CFA arrangement, in that they can pursue the costs of the claim at reduced financial risk because defendants often cannot enforce their entitlement to costs against a claimant.
Before QOCS they would have borne the cost of any adverse costs orders themselves rather than passing them on to their client. Now, absent an NPCO, they may risk only their own costs and expenses. That, again, is just a consequence of the way the QOCS regime works.
Section 51 of the Senior Courts Act 1981, empowers courts to make costs orders against parties other than those who have brought or defended litigation. There must be good reason to do so. In this case, it was the applicant’s position that BBK were more than a solicitor simply acting as a solicitor as permitted by the Courts and Legal Services Act 1990.
The Defendant asserted that only BBK, and not the Claimant, had had any financial interest in the outcome of the proceedings, based upon the terms of the retainer agreement between the Claimant and BBK.
The Claimant argued that it was no part of (and was never suggested in) the Jackson reforms, or the policy behind the introduction of QOCS, that one of the effects of QOCS should be to shift, in whole or part, the liability for costs of any part of personal injury proceedings from Claimants to their solicitors. Rather, the intention was to remove that liability (in most circumstances) in return for defendants being relieved of the obligation to pay ATE premiums and to enhance access to justice.
It was therefore contended that the Defendant’s application was an attempt to circumvent what it perceived to be the unsatisfactory operation of the QOCS rules as drafted; hence the attempt to reinterpret CPR 44.16 as changing the basis upon which an NPCO can be made.
Judgment
Costs Judge Leonard, applying his substantial experience of these types of cases, concluded that:
“… if an NPCO could be justified whenever a costs order is made against the client of a solicitor pursuing costs under a CFA lite or capped CFA, merely because the client has no significant stake in the recovery of costs, then NPCOs would not be exceptional. They would become routine.”
He was not, therefore, satisfied that it would be just or consistent with established authority to make an NPCO against BBK. The application was therefore dismissed.
Analysis
This is another test case in relation to QOCS that was decided against the defendant. However, for most cases going forward this judgment will have no effect. From 6 April the Civil Procedure Rules will be changed significantly to permit enforcement in most circumstances against claimants.
I would expect further test cases in relation to the application of these new rules going forward.
Andrew Crisp is an Associate in Clarion’s Costs and Litigation Funding Department and can be contacted at andrew.crisp@clarionsolicitors.com or on 07587 554 804.
