High Court Deliberates on QOCS, Costs Orders, and Mixed Claims in Muhammad Tanveer Amjad v UK Insurance Limited

Citation: [2023] EWHC 2832 (KB)
Judgment on

Introduction

In the case of Muhammad Tanveer Amjad v UK Insurance Limited, the High Court of Justice grapples with complex issues surrounding qualified one-way costs shifting (QOCS), the enforcement of costs orders against claimants in personal injury claims, and the specificities of mixed claims involving both personal injury and non-personal injury components. This article offers an analytical exploration of the legal principles applied in this case, as delineated in Mr Justice Ritchie’s judgment.

Key Facts

The claimant, Mr. Muhammad Tanveer Amjad, a taxi driver, sued for damages following a road traffic accident. The claim encompassed personal injuries, vehicular damage, and additionally, controversially high credit hire charges (CHC) from a company called “Bespoke.” The CHC charges were a significant portion of the claim and took center stage in the legal proceedings. After an “unless order” regarding the disclosure of financial documents was allegedly breached by the claimant, a judgment was eventually made against him, and QOCS protection was lifted as per CPR r.44.16(2), which resulted in the enforcement of costs far exceeding the damages awarded.

The judgment by Mr Justice Ritchie delivers an intricate review of significant legal principles:

  1. Qualified One-Way Costs Shifting (QOCS): The QOCS rules protect personal injury claimants from having to pay the defendant’s legal costs if the claim is unsuccessful, subject to certain exceptions. The premise of QOCS is rooted in the need to provide access to justice.

  2. Exceptions to QOCS:

    • Automatic or semi-automatic exceptions where the claim is deemed to have no reasonable grounds.
    • Discretionary exceptions involving fundamentally dishonest claims or claims for the financial benefit of a third party (CPR r.44.16(2)).

  3. Characterisation of Claims: A critical aspect is determining whether the proceeding “in the round” is principally a personal injury claim, which would attract QOCS protection, versus a mixed claim where other types of damages are sought.

  4. Gateways for Lifting the QOCS Cap:

    • CPR r.44.16(2)(a): The CHC may financially benefit from the claim, opening the gateway for QOCS cap to be lifted.
    • CPR r.44.16(2)(b): The claim is primarily for the claimant’s benefit other than personal injury, which may allow lifting the cap if the court finds it just.

  5. Enforcement of Costs Orders: The issue of whether costs can be enforced against the claimant above the cap protected by QOCS, particularly when separate components of the claim (credit hire charges) benefit a party other than the claimant.

  6. Non-Party Costs Order (NPCO): The criteria for awarding costs against a non-party such as the CHC, which requires examination of control over litigation and the real beneficiary of the claim.

Outcomes

Mr Justice Ritchie’s analysis led to the allowance of the appeal and setting aside the previous order, fundamentally on the grounds that the wrong gateway under CPR r.44.16(2) had been applied by the trial judge. The final decision hinged on:

  • The “benefit” test being binary, favoring a mutually exclusive application of CPR r.44.16(2)(a) over (2)(b) in this case.
  • A determination that QOCS protection should not have been lifted against the claimant based on the mutual exclusivity principle.
  • The financial circumstances of the claimant and the proportion of the claim attributable to personal injury factors were improperly weighted in the context of QOCS.

Conclusion

The judgment underscores the judiciary’s careful balancing act between deterring unmeritorious claims and maintaining the integrity of QOCS to fortify the claimant’s access to justice. It illustrates that courts must meticulously apply QOCS and its exceptions, interpret the “benefit” factor accurately, and ensure justice by evaluating the circumstances extensively before lifting QOCS protections. The judgment clarifies the approach to mixed claims in the context of QOCS, particularly emphasizing the court’s discretion and the significant distinction between financial benefits of the claim as it relates to the respective gateways under CPR r.44.16(2). The reiteration of QOCS as a starting point and the exceptional nature required to lift the cap serve as critical guidance for future personal injury litigations involving complex damages components.