More bad news for defendants in QOCS claims: no set-off of costs against damages following settlement even where a court order is necessary.

In this blog Jeremy McKeown considers the Court of Appeal decision of University Hospitals of Derby & Burton NHS Foundation Trust v Harrison [2022] EWCA Civ 1660.

IMPORTANT PRACTICE POINT: This decision (as with all other similar authorities) is currently good law but its shelf-life has been severely limited by the recent published changes in the QOCS rules to take effect from April 2023 (see our recent blog post: Costs Earthquake – QOCS rules to change radically in April).

In this important decision on the impact of QOCS on a defendant’s ability to recover its costs, the Court of Appeal clarified Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654 and confirmed that damages recorded or referred to in a necessary court order, for example where the court’s permission is required to accept a Part 36 offer after the relevant period, is not an “order for damages and interest” within the meaning of CPR 44.14.

If the resulting court order had been considered a qualifying order within CPR 44.14, the defendant could have set-off their costs against the agreed damages. Those costs were considerable since the claimant accepted a Part 36 offer some two years after the end of the relevant period.

The case builds on well-established authority that defendants cannot set-off their costs after the relevant period against damages resulting from acceptance of a Part 36. The rationale for this rule is that acceptance of an offer does not fall within the strict wording of the CPR which allows set-off against damages in QOCS claims only where there is an “order for damages and interest” (CPR 44.14). Where a case settles, there is rarely a court order for damages and therefore no ability to set-off.

However, in Harrison, owing to late acceptance of the offer (CRU had accrued since the offer was made) the court’s permission was required. In granting permission, the court issued an order which the defendants said satisfied CPR 44.14 and allowed them to set-off their costs against the agreement damages.


On appeal, Coulson LJ made the following key findings:

  • In (1) granting permission for the offer to be accepted and (2) directing the amount of the deduction payable to CRU, the court “was not carrying out any evaluation or assessment of what was due or to be paid. [The Judge at first instance] was not, therefore, making an order for damages in favour of the claimant” [para. 28].
  • Instead, the Judge was simply “directing the amount of deduction” that was to be made to the settlement figure in accordance with the CPR provisions.
  • This was reinforced by the method of enforcement open to the claimant if the defendants did not pay. The party would have to enforce in accordance with the procedure set out in CPR 36.14(7) rather than by claiming the other party had breached a court order. The defendant’s obligation to pay therefore arose from the effect of the CPR and not from the order [paras. 29-30].
  • If it were to be otherwise, “form would be elevated over substance”. It would create a two-tier system where certain (regular) settlements within Part 36 would continue to afford QOCS protection to a claimant whereas other settlements which happened to require the court to issue a certain type of order containing a reference to the damages in the body of the order, as here, would lose QOCS protection. If that were so, all that would matter would be the form of court order required [paras. 36-37].
  • In fact, the concern was said not to be merely hypothetical. There are certain types of claim where Part 36 requires the court to make an order to reflect the settlement between the parties. Those include: cases where the claimant lacks mental capacity, where the claimant is a child, where the claimant is disabled and qualifies for provisional damages or periodic payments, or where a dependant claimant of the deceased is entitled to an apportionment of dependency damages. If the appellant’s argument were to succeed, it would mean that an ‘ordinary’ claimant would keep QOCS protection whereas any of the above would lose it. The court concluded that was not what the CPR intended [paras. 40-41].

In obiter comments, the court also indicated that the following circumstances were also unlikely to entitle a defendant to set-off under CPR 44.14:

  • Approval hearings (CPR 36.14(2));
  • Orders for Periodical Payments (CPR 36.18(7));
  • Disputes over CRU (CPR 36.22(9)(b));
  • Judgment where, following acceptance of a CPR, Part 36 offer, payment is not made within 14 days (CPR 36.14(7)).


The decision follows closely on the heels of Chappell v Mrozek [2022] EWHC 3147 (QB) which also denied the defendant the ability to set-off its costs (see our previous blog post: QOCS trumps Part 36 – Another Claimant “victory” (for now)?).

The decision offers further proof of the claimant-friendly framing of the QOCS rules following settlement. It is a reminder to defendants that disposal by way of settlement, whether under Part 36 or otherwise, will almost never attract the right to set-off against damages.

Harrison appears to stand in contrast to the recent case of MRA v Education Fellowship Ltd [2022] EWHC 1069 (QB) where the High Court held that an order following approval of a settlement sum did constitute an order of the court allowing the defendants to set-off. That decision must be questioned in light of the Court of Appeal’s recent findings.

The Court of Appeal also addressed the ongoing consultation on changes to the QOCS rules triggered by the Supreme Court’s decision in Ho v Adelekun [2021] UKSC 43. Ironically, the fact that there is said to be a need for changes to CPR 44.14, and that there were known proposed changes in the works, supported the court’s thinking that the appellant’s interpretation of the rule as it currently stands must be wrong.

The decision also helpfully cites the current proposed changes under consideration by the CPR rules committee: At the meeting of the CPRC on 7 October 2022, a fuller amendment was agreed (emphasis added):

“(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for or agreements to pay damages, costs and interest made in favour of the claimant.”

For defendants, this presents a welcome change. As many commentators have noted, the rule as currently written clearly runs contrary to the intention and policy aims when QOCS was being debated:

“As to the second scenario (claimant fails to beat defendant’s offer), the defendant will have adequate protection: the court will be likely to make a costs order against the claimant in respect of the post-offer period in circumstances where (a) the claimant was acting unreasonably in rejecting a proper offer and (b) the costs in respect of the pre-offer period plus the damages recovered by the claimant provide sufficient funds out of which the claimant can reasonably be expected to pay at least some costs” Chapter 19, (4.10) of Jackson’s Review of Civil Litigation Costs: Final Report dated December 2009

Practice points

  • Defendants should go back and reconsider any Part 36 offers in live cases. If there was reliance on the defendants being able to set-off costs based on a reading of CPR 44.14 which the court in Harrison has now contradicted, you may wish to consider a revision of those offers.
  • The case is a useful reminder of the importance of the one strategic advantage held by defendants, namely the ability to severely limit the Claimant’s costs where the defendant makes an early Part 36 offer. In Harrison, the one consequence for the claimant in accepting an offer almost two years after the end of the relevant period was that they were denied all costs after that date.

Costs Earthquake – QOCS rules to change radically in April

This blog was written by Andrew Roy, Deputy Costs Judge & Head of 12KBW’s Costs Team.

The present

CPR 44.14 as currently (and originally) enacted provides (emphasis added):

Effect of qualified one-way costs shifting

(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the claimant.

(2) Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.

(3) An order for costs which is enforced only to the extent permitted by paragraph (1) shall not be treated as an unsatisfied or outstanding judgment for the purposes of any court record.

Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654; [2018] 1 WLR 6137 established that this precluded enforcement against damages recovered via settlement under e.g. Part 36 or a Tomlin order.

For a time defendants could recover at least some of their costs by way of set off against a claimant’s costs, even if QOCS precluded direct recovery because there was no order for damages in the claimant’s favour.

However, the Supreme Court in Ho v Adelekun [2021] UKSC 43; [2021] 1 WLR 5132 then held that setting off a defendant’s costs against a claimant’s was a species of enforcement.  It was therefore precluded where it exceeded the cap reflecting the sum of any orders for damages and interest made in favour of the claimant. 

The upshot of all this is that QOCS makes it virtually impossible for a defendant to recover costs from a claimant when a claim settles. This was recently confirmed in University Hospitals of Derby & Burton NHS Foundation Trust v Harrison [2022] EWCA Civ 1660.

Given that (a) the vast majority of personal injury claims settle; and (b) going to trial and having an order for damages made against it is generally the last outcome that a defendant would wish to seek, in practical terms the scope for defendants to obtain any effective costs recovery (save where one of the exceptions such as fundamental dishonesty applies) is vanishingly small.

Defendants are therefore precluded from recovering costs in any number of very common scenarios e.g.:

  • When a claimant accepts a Part 36 offer out of time;
  • When a claimant is ordered to pay the costs of an interim hearing;
  • When a claimant loses a post-settlement costs dispute.

However, from April 2023 all this is going to change.

The future

Ho was a landmark victory for claimants.  However, it was so favourable a result that it carried with it the danger of winning not wisely but too well.

The Supreme Court at [9, 31, 44-45] acknowledges that the claimant’s interpretation led to results which could be considered counterintuitive and unfair.  It therefore recommended that the Rules Committee revisit the rules in question.

They have done so.  The result is a radical reformulation of QOCS.

CPR 44.14 will from 6 April 2023 read as follows (amendments tracked, bold emphasis added)

(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages or agreements to pay or settle a claim for, damages, costs and interest made in favour of the claimant.

(2) For the purposes of this Section, orders for costs includes orders for costs deemed to have been made (either against the claimant or in favour of the claimant) as set out in rule 44.9.

(2) (3) Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.

(4) Where enforcement is permitted against any order for costs made in favour of the claimant, rule 44.12 applies.

(3) (5) An order for costs which is enforced only to the extent permitted by paragraph (1) shall not be treated as an unsatisfied or outstanding judgment for the purposes of any court record.

(The Civil Procedure (Amendment) Rules 2023 (

The effect of this is as follows:

  • The new sub-paragraphs (2)-(3) explicitly and directly reverse Cartwright.
  • However, they go further than that.  They raise the general enforcement cap to give defendants an absolute right to enforce up to the level of any damages or costs recovered by claimants.  Pre-Ho, enforcement against costs could only be achieved indirectly by way of set-off.  That was so even pre-Cartwright.
  • Deemed orders at CPR 44.9 includes those under CPR 36.13(1) or (2) (claimant’s entitlement to costs where a Part 36 offer is accepted).  For there to be any jurisdiction for a claimant to seek assessment of his or her own costs there must be a document giving rise to a right to detailed assessment.  This means a costs order or proof of a deemed costs order; PD47 13.3, Bayliss v Powys [2021] EWHC (QB).  So the very fact of a claimant’s entitlement to costs will bring such costs within the scope of this provision.
  • However, this provision in fact appears academic, given that enforcement is possible in respect of any damages or costs recovered by it by order or by settlement.
  • The new sub-paragraph (4) explicitly and directly reverses Ho.

Ho has thus proved the ultimate Pyrrhic victory for claimants.  The changes to the rules it has prompted will not merely reverse the effects of Ho itself.  They will also reverse the effect of Cartwright.  Indeed, they will create a more favourable costs regime for defendants than if Cartwright had been decided the other way and the rules left unchanged.

There is however a silver lining for claimants in the form of a transitional provision that the amendments “apply only to claims where proceedings are issued on or after 6th April 2023”.

(The Civil Procedure (Amendment) Rules 2023 (

Takeaway Practice Points

  • Defendants’ Part 36 offers will in the future have much more bite.
  • This is self-evidently crucial in respect of costs, which are important in themselves. 
  • The effects moreover feed into settlement dynamics, and thus into both strategy and tactics. Parties and their advisers will need to factor these considerations into any decision, as to what offers to make, accept or reject.
  • These changes will also dramatically alter the cost/risk/benefit analysis of:
    • Making or resisting interim applications.
    • Post-settlements costs disputes.  This includes detailed assessments.  At the moment a defendant in a settled personal injury claim cannot recover its costs of these; PME v The Scout Association [2023] EWHC 158 (SCCO).  That will no longer be the case.
  • Claimants would be well advised where possible to issue proceedings before 6 April 2023.
  • There will an increased need for ATE insurance or other protection against adverse costs.  By the same token, premiums for such insurance are likely to rise to reflect the greatly increased risks.
  • The precise effect of these rules is likely to be subject to argument.  All of the many significant changes to the costs rules in recent times have generated satellite litigation.  Most if not all have generated unintended consequences (the original iteration of QOCS being a prime example). Watch this space.

QOCS trumps Part 36 – Another Claimant “victory” (for now)?

In this blog Henry King considers the decision of Judge Stevens in Chappell v Mrozek [2022] EWHC 3147 (KB).

Key Takeaways

The key takeaway from Chappell is that in a battle between the two self-contained regimes that are CPR Part 36 and QOCS: it is QOCS which comes out on top. If a Claimant accepts a Part 36 offer after the expiry of the relevant period, the Defendant will not be able to enforce its costs from the expiry of the relevant period against the sum offered under CPR Part 36. However, the editors of this blog note that this could soon be subject to change in light of the comments of LJ Coulson in University Hospitals of Derby & Burton NHS Foundation Trust v Harrison [2022] EWCA Civ 1660 at [51-52] and the proposed changes to CPR 44.14 discussed by the CPRC, see below.

Factual Background

The Claimant was severely injured on 16 December 2016 whilst riding his motorbike. Liability was formally admitted some 6 months after receipt of the letter of claim. Proceedings were served nearly 3 years later, accompanied by a Schedule of Loss totaling £8,432,461.26. On 19 May 2020 the Defendant served a Part 36 offer to settle the claim for the sum of £250,000, that offer was accepted nearly 2 years later on 16 February 2022: well beyond the expiry of the relevant period.

The (Cross)Applications

The Defendant refused to pay the settlement sum of £250,000, thereby attempting to force the Claimant to make an application for judgment pursuant to CPR 36.14(7) which provides that “If such sum is not paid within 14 days of acceptance of the offer, or such other period as has been agreed, the claimant may enter judgment for the unpaid sum.” However, what the Claimant did was make an application pursuant to CPR 34.14(8) which provides, where “a party alleges that the other party has not honoured the terms of the [Part 36] offer, that party may apply to enforce the terms of the offer without the need for a new claim.”

The Defendant cross-applied to enforce its costs against the £250,000 offered; it should be noted that the Defendant did not seek to offset its costs against the Claimant’s costs. The Defendant submitted that this should be done by either (i) treating the Part 36 offer as an order for damages; or (ii) asking that the Court enter judgment for the unpaid sum pursuant to CPR 36.14(7).

The Relevant CPR Provisions

CPR 44.14 provides for the enforcement of costs orders against claimants by way of set-off against “any orders for damages and interest made in favour of the claimant”. The question was whether such a set-off can apply against a “sum of money” tendered by way of a Part 36 offer. The Claimant submitted that it did not given that a Part 36 offer reflects the commercial value a party has placed on resolving a dispute which is markedly different to a judicially determined award of damages supplemented by a judicial calculation of interest. The Defendant submitted that it did.

A written notice of acceptance under CPR Part 36.11, results in a stay of proceedings and automatic obligations on the offeror to pay the settlement sum in a specified timeframe. If there is a breach of those obligations, the claimant contended that whilst the offeree can apply to enter judgment for the unpaid sum under CPR 36.14 (7), the resultant court order is not an “order for damages and interest”, but is a completely different species of order, with a DNA more analagous to that of a Tomlin order.

It was agreed by the parties that the Claimant had his costs up to the expiry of the relevant period and the Defendant had its costs from expiry to acceptance. However, despite both parties being represented by “very experienced” costs counsel it was noted at [11] that:

“Both parties asked me to imply markedly different meanings to words in the civil procedure rules in order to arrive at the respective interpretations which they say reflect the original policy intentions. The battleground in this case, has a focus on the words “settlement sum” or “damages and interest” as the target funding pot for the defendant’s additional costs outlay, beyond the relevant 21 day period for acceptance of their offer. There is a separate issue about which statements in the various judgments to which I was referred establish precedent or are otherwise binding upon me.”

The Decision

Having considered the authorities, including the policy background to QOCS following Sir Rupert Jackson’s Review of Civil Litigation Costs 2009 and the Government’s Response in March 2011, the Judge held that the Defendant’s course of action (deliberately refusing to pay the settlement sum offer under CPR 36) could not result in enforcement against the Claimant’s damages.

LJ Coulson’s judgment in Cartwright was considered in detail and it was noted at [35]:

The court rejected submissions that the addition of wording, (whether implied or express) in CPR 44.14(1)to include, “a sum payable by way of damages which is compellable by court order”, would fulfil the original purpose of the rule and indeed encompass Tomlin orders as well. A conclusion was reached at paragraph 46 “At the very least,…the rule would have to refer, not only to an order, but to an agreed settlement”. Once again, the line of reasoning, even though it did not reference Part 36, would naturally encompass it.

The Supreme Court’s judgment in Adelekun was also carefully considered and it was noted at [42]:

The clear message that I take from Adelekun is that the court was not prepared to imply or infer words into Part 44 to expand the scope for enforcement, where the brief wording of the rule might otherwise seem to produce an unfair result on occasion… the Supreme Court did not consider it appropriate to add words to the QOCS scheme which is currently set out “with commendable brevity” (as noted at paragraph 19), to expand its scope, preferring that words should be given their straightforward meaning and any amplification or further finesses should only be introduced by the CPRC.

The Defendant’s attempts to distinguish Adelekun v Ho [2021] UKSC 43 on the basis that it was a set off of costs against costs whereas this was set off against damages were rejected, see the judgment at [30].

However, MRA v The Education Fellowship [2022] EWHC 1069 (QB) [43; 50] was distinguished. It was noted that the real issue in that case was whether it would be unjust to order the Claimant to pay the Defendant’s costs after the expiry of the relevant period, which was not the issue to be adjudicated upon in this case.

Reference was made (although we are surprised it was only in passing at paragraph 54) to the commentary in The White Book at 36.14.2 which explicitly states: “a claimant is entitled to be paid the offered sum within 14 days, he is entitled to such payment without set off against an unquantified costs liability (Cave v Bulley Davey [2013] EWHC 4246 (QB) (HH Judge Seymour QC)).”

Accordingly, Judge Stevens acceded to the Claimant’s application that the Defendant pay the Claimant the “settlement sum” of £250,000 and that the costs order against the claimant made in respect of late acceptance is not to be set-off against any part of the ordered sums (£250,000) in the claimant’s favour. The defendant’s cross-application was dismissed to enter judgment pursuant to CPR 36.14(7) or to treat a Part 36 settlement as an order for damages.


Given the sums at stake, the case having been pleaded at over £8m and yet settling for just over 3% of this figure at £250,000, this may not be the last we hear on this matter. We also note that proposed changes to CPR 44.14(1) have already been discussed by the CPRC on 7 October 2022 at [34-40] (proposing the explicit addition of the word “costs” such that a Defendant could enforce a costs order in its favour up to the “aggregate amount in money terms of any orders for damages, costs and interest made in favour of the claimant”.

News Flash! Two Government Consultations have opened on (1) QOCS (2) Vulnerable Parties

The Government has opened two consultations on Costs: (1) considers changes to the CPR dealing with QOCS (following the issues raised by the Supreme Court in Ho v Adelekun [2021] UKSC 43); and (2) concerning how costs for vulnerable parties might be uplifted under the extended FRC which is now set to come into force in April 2023.

The Consultations on QOCS is available here and on vulnerable parties is available here.

Proposed Changes to QOCS and Part 44
Background to QOCS
QOCS was originally implemented to enable the end of recoverable ATE premiums. Sir Rupert Jackson proposed that a new costs protection regime be developed, for PI claims, based on the legal aid ‘shield’, then in s. 11(1) of the AJA, such that:

“Costs ordered against the claimant [in any PI claim] shall not exceed the amount (if any) which is a reasonable one for him to pay having regard to all the circumstances including – (a) the financial resources of all parties to the proceedings, and (b) their conduct in connection..”

The Government decided, with the agreement of all sides that, for practical reasons, means should not be an issue in respect of QOCS in PI claims. Although conduct was accounted for in the rules as drafted through provisions such as those in relation to fundamental dishonesty. The policy objective was to put “parties who are in an asymmetric relationship onto a more equal footing.” In other words, a claimant who loses a reasonably brought PI claim should not lose their house paying the other side’s costs whilst a Claimant who has no assets may have nothing to lose.

The Current Position & Its Difficulties
At present, the QOCS regime operates such that [a Defendant’s] costs can be enforced up to the total awarded in damages; but it does not allow costs to be offset against costs, per the Supreme Court’s decision in Ho v Adelekun.

Ho follows the Court of Appeal’s decision in Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654 which held the acceptance of a Part 36 offer does not create an enforceable order for the purposes of QOCS. Prior to Ho, Cartwright was manageable in practice because parties could agree an offset against costs. However, because Ho made it clear that any offset must be limited to damages only and not costs, the decision in Cartwright cannot now be managed between parties in the same way. Thus, the combined outcome of both of these cases is to undermine the effectiveness of QOCS and Part 36 in resolving disputes.

The Proposed Changes

The proposal states that the Government considers that the most effective way of addressing issues around QOCS is by amending Section II of Part 44 as follows:

  • A claimant’s entitlement to costs is considered to be part of the overall fund against which set-off can be applied; and
  • Extend costs orders to deemed orders, so a defendant can enforce a deemed order for costs (especially following acceptance of a Part 36 offer) without the permission of the court.

Discussion – Redressing the Balance
The policy objective of these changes is articulated in the consultation as follows:

“It is right that claimants have sufficient protection, so they are not left in a worse position after the claim than before it. However, there must be balance. It is the Government’s position that defendants must be able to make effective use of Part 36 and recover costs where appropriate and, if necessary, by set-off, so that there is effective control over the running of unmeritorious issues.”

Vulnerable Parties
The second consultation relates to vulnerable parties.
As those reading this blog will know, in Aldred v Cham [2019] EWCA Civ 1780 the Court of Appeal drew the distinction between “a feature of the claim” and “a feature of the claimant” (only costs incurred due to “a feature of the claim” are recoverable). Accordingly, the Court of Appeal held that the costs incurred for advising on a child settlement (which is mandatory under CPR 21) were a feature of the child as a claimant, not a feature of the claim, and were therefore not recoverable.

However, “the MoJ is keen to ensure that those who are vulnerable (either as parties or witnesses) are not disadvantaged in bringing or defending claims which are within the scope of FRC.” This issue was highlighted by the report by HHJ Cotter QC (as he then was) for the Civil Justice Council (CJC) in 2020, which was published after both Sir Rupert Jackson’s FRC report in 2017 and MoJ’s consultation on it in 2019.

Accordingly, the MoJ proposes that vulnerability in respect of parties and witnesses under the extended FRC (it should be noted that this is the new regime which has yet to come into effect, which, simply put, will be extending the fixed costs regime to all personal injury cases valued up to £100,000 with exceptions for certain diseases and a special regime for clinical negligence). The MoJ proposes that the extended FRC scheme should deal with costs associated with vulnerable parties as follows:

The Vulnerability Proposals for the Extended FRC
(i) It is a judicial decision to determine whether or not the vulnerability gives rise to sufficient extra work to justify, exceptionally, an additional amount of costs;
(ii) There needs to be a threshold, which is proposed to be 20% in line with existing provisions, of additional work caused by the vulnerability;
(iii) The procedure by which people can establish a vulnerability uplift needs to be clear and simple; and
(iv) The process needs to be retrospective (as with the assessment of costs generally), not prospective: the judge needs to be satisfied that sufficient extra work has been incurred, not that it may need to be.

There are various existing CPR provisions which allow for the above proposals already. CPR 45.13-15 and 45.29J-L set a minimum threshold of 20% additional costs to trigger additional recovery and provide for the challenging party to pay the costs of challenge if the court does not consider the claim to be appropriate or, on assessment, the minimum 20% threshold is not met. However, costs would not be capped at a maximum but would be subject to assessment by a judge to determine reasonable and proportionate costs.

These proposals don’t offer much security to those who will be acting for vulnerable Claimants (i.e. children or those who lack capacity). In fact, it is a risky strategy to try and seek further costs as if you fall short of showing an additional 20% of costs have been generated you will have to pay the costs of challenge, which look, per the likely changes to QOCS, to soon be part of the ‘pot’ against which the Defendant’s costs can be enforced.

It should be noted that there is no proposal to change the existing FRC regime (although views are invited on the same as part of the consultation). This is because it is noted that “vulnerability in itself does not automatically generate exceptional extra work to require an uplift” and “vulnerability appears to have a minimal impact in existing (low value PI) FRC regimes because the cases covered are mainly straightforward low value claims where the presence of a vulnerability has little bearing on the case or the amount of time or work that is required. Furthermore, those cases that are not of this type are typically excluded from existing FRC altogether.”

Practical Takeaways

  • Claimants should continue to take advantage of Ho which remains the current state of the law – which in practice means that interim applications can be made with little fear as to costs. ATE premiums should reflect the currently small risks on costs.
  • However, this is likely to change and it will be wise to very carefully consider the merits of interim applications if Ho is reversed – with a knock on inflationary impact on ATE premiums.
  • No changes to the current FRC for claims up to £25,000 look likely in respect of vulnerable parties.
  • There is likely to be some costs protection for vulnerable parties under the new extended FRC scheme which has yet to come into force – however, to qualify litigators will need to show that they have incurred 20% more costs as a result of the vulnerability in question as fixed costs regimes by their nature operate a system of ‘swings and roundabouts’.