Arabella Wagenaar v Weekend Travel Ltd (t/a Ski Weekend) and Nawelle Serrad (third party) [2014] EWCA Civ 1105

This appeal raised two issues: First, a question as to the vires of the provisions relating to Qualified One-Way Costs Shifting (“QOCS”) introduced into the CPR by rr 44.13 to 44.17 in April 2013 as a result of the reforms that were proposed by Sir Rupert Jackson's Review of Civil Litigation Costs Final Report (the “Jackson Report”); and secondly an issue as to whether QOCS applies not only to claims for damages for personal injuries brought by a Claimant against a Defendant, but also to claims for an indemnity or contribution brought by such a Defendant against a third party, should the rules relating to QOCS be held to be valid.

The claimant issued proceedings against the defendant under reg 15 of the Package Travel, Package Holidays and Package Tour Regulations 1992, SI 1992/3288. She sought damages for serious personal injuries that she had sustained in a skiing accident that had taken place whilst she was on a package holiday that had been arranged by the defendant company.  The defendant joined the claimant's ski instructor to the claim as a third party pursuant to CPR Pt 20. The defendant alleged that if the accident had been caused by negligence at all (which was denied), it was the ski instructor’s negligence that had been the proximate cause of the claimant's accident. The claimant's claim was dismissed, as was the defendant's claim against the third party ski instructor.

The trial took place in May 2013, shortly after the QOCS rules came into effect and the Court ordered that the claimant should pay the defendant's costs, but that such order was not to be enforced against the claimant pursuant to the provisions of CPR 44.13 and 44.14. Further, he ordered that the defendant should pay the third party’s costs, but that such order was not to be enforced against the defendant pursuant to the same provisions of the CPR. The net effect was that each party was to bear her or its own costs.

CPR 44.13 to 44.17 had introduced Qualified One-Way Costs Shifting (QOCS) into the CPR which, the judge held, had retrospective effect.  Both the Defendant and the Third Party appealed against the costs orders.

The third party contended that:

  • the judge should not have held that the rules on QOCS applied to the CPR Pt 20 proceedings between the Defendant and the third party, and
  • that there should not have been a stay on the order for costs in her favour.

The Defendant contended that:

  • the judge should not have held that QOCS applied to the case at all on the basis that:   
    • the QOCS provisions are ultra vires section 51(3) of the Senior Courts Act 1981 which provides that “[t]he court shall have full power to determine by whom and to what extent the costs are to be paid”;
    • that the rules on QOCS should not have had retrospective effect on the Defendant, since most of the costs in question had been incurred before they came into force on 1 April 2013; and
    • the Defendant's junior counsel had a pre-commencement funding arrangement in place within CPR r 48.1 so that the former costs rules should apply to that arrangement

The Court of Appeal agreed with the Third Party’s submission that the QOCS provisions only applied to protect claimants who were bringing a claim which included a claim for damages for personal injuries (or the other claims specified in CPR 44.13(1)(b) and (c)) but did not apply to the whole of an action in which such a claim featured.  Accordingly the judge had erred in his interpretation of the provisions as extending such protection to defendants who were claimants in third party or contribution proceedings arising out of personal injury claims.

As to the Defendant’s appeal, the Court of Appeal held the argument that the QOCS provisions were ultra vires was wrong and that the court’s power under section 51(3) to determine by whom and to what extent costs are to be paid is to be read subject to the power of the rules committee to make rules of court concerning the availability of an award of costs, the amount of such costs and the exercise of the court’s discretion in relation to costs.  The rules committee was therefore fully entitled to make the QOCS rules.

Further, it was well established that the presumption against retrospection did not apply to legislation concerned with matters of procedure, and that provisions of that nature were to be construed as retrospective unless there was a clear indication that that had not been the legislature's intention. There was nothing in CPR 44.13 to 44.17 to indicate that they were not intended to be retrospective; indeed, they showed clearly that they were.  The Defendants appeal was therefore dismissed.

The effect of the appeals was therefore that the Claimant was entitled to the QOCS protection but the Defendant was not.  The practical effect was that, although successful in defending the claim, the Defendant could not recover its costs from the Claimant and, because of the failure of the Part 20 claim, had to pay the Third Party’s costs.  As the Defendant submitted, it would have been better off if both claims had succeeded.

The impact of the QOCS provisions requires careful economic consideration where indemnity or contribution claims are contemplated by defendants to personal injury claims, whether arising from accidents abroad or otherwise.

2014 Guideline Hourly rates published

The new Guideline Hourly Rates for 2014 have now been announced.

The rates remain unchanged from 2010. The Report of the Costs Committee had recommended a range of amendments with the average rate going down and not up.