In April 2013 Lord Justice Jackson introduced the concept of qualified one way costs shifting or “QOCS”. This meant that defendants would ordinarily be unable to recover their costs, even if they successfully defended a claim. This principle recently came under scrutiny in a claim involving the Motor Insurance Bureau (MIB), following a road traffic accident in France. Mr Howe was rendered a paraplegic when his vehicle was struck by a wheel which detached from a lorry ahead of him. The French authorities were unable to identify the driver of the other vehicle.
The Fourth Motor Directive entitles a claimant who suffers an accident in a member state other than his own to pursue a claim in his own member state. Mr Howe was able to rely upon the Motor Vehicles (Compulsory Insurance) (Information Centre and Compensation Body) Regulations 2003, which implemented the Fourth Directive.
The crux of the dispute (to be determined by the English High Court) centred on three key issues:
- Is the MIB’s liability to compensate a claimant pursuant to the 2003 Regulations dependent upon the similar fund in France, the Fonds de Garantie (FDG), being liable to compensate the claimant in respect of the accident?
- Was the claim already time barred?
- Does QOCS extend to claims against the MIB?
Stewart J concluded that he was bound by earlier case law to find that the MIB's liability to compensate the claimant was not dependent on the claimant firstly establishing that FDG was liable to compensate him. However, the claim was dismissed on the basis that it was time barred pursuant to the 2003 Regulations and Mr Howe was ordered to pay the MIB's costs.
The court held that the purpose of QOCS is to protect injured persons from the risk of adverse costs orders obtained by insured or well-funded parties, which may otherwise deter them from making a claim. That had to be kept in mind when interpreting the relevant provisions of the Civil Procedure Rules. The presiding judge concluded that "damages" are simply an award of money for a civil wrong. By contrast, it was suggested that this action consisted of a claim for money under statute. In the absence of any allegation of wrongdoing (as in this case) it could not be defined as an action for damages. The claim under Regulation 13 was therefore not a claim within the meaning of Regulation 44.13 and the claimant did not have the protection of QOCS.
The claimant has since been given permission to appeal the decision to the Court of Appeal.