An important issue to consider around what happens if you lose your personal injury claim is, firstly, to determine when you started your retainer with your instructing solicitor. In the event that your personal injury claim was commenced before 1^st April 2013 and you instructed your solicitors on a Conditional Fee Agreement, you may have the benefit of After The Event insurance which covers you for the costs liability of the Defendant.

However, from 1^st April 2013, the principal of Qualified One-way Costs Shifting (QOCS) applies to personal injury and fatal accident claims which are not funded by a pre-commencement funding arrangement. In laymen’s terms, this means that if you instruct a solicitor on a Conditional Fee Agreement after 1^st April 2013, QOCS will apply to your claim.

What is Qualified One-way Costs Shifting?

Qualified One-way Costs Shifting (QOCS) regime limits a losing Claimant’s liability to pay costs to the Defendant, should the claim for personal injury be unsuccessful. In effect, the Defendant will not be able to enforce any costs orders against the Claimant unless certain circumstances apply. QOCS applies to:

1. Claims against the Motor Insurance Bureau (MIB)
2. A Claimant or counter Claimant making a personal injury claim
3. An appeal (includes a second appeal and appeal brought by a Defendant and where the Court declined to exercise its discretionary powers to limit recoverable costs under Civil Procedure Rule 52.19.

QOCS does not apply to claims where the Claimant has entered into a pre-commenced funding arrangement before 1^st April 2013.

Application of pre-action disclosure:

The effect of QOCS is subject to the exceptions of Civil Procedure Rules 44.15 and 44.16. Costs orders may be enforced against the Claimant without the permission of the Court but only to the extent that the amount of costs does not exceed any orders for damages made in the Claimant’s favour.

Costs orders against Claimants may only be enforced after proceedings have been concluded and the costs have been assessed or agreed.

Costs orders which are enforceable against the Claimant for damages and interests are to be treated as an unsatisfied outstanding judgement for the purpose of any Court record. In practice, this appears to mean that it is not be entered on the registry of County Court judgements.

Costs orders: exceptions to QOCS:

Costs orders can be enforced against Claimants without Court permission where proceedings have been struck out on the grounds that:

1. The Claimant has disclosed no reasonable grounds for bringing the proceedings
2. Proceedings are an abuse of the Court process, or
3. The conduct of the Claimant (or person acting on the Claimants behalf and with the Claimants knowledge) is likely to obstruct just disposal of the proceedings.

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