The Court of Appeal has ruled that claimants may not “blow hot and cold” with which regime they are entitled to select when it comes to costs, i.e. where there is a pre-April 2013 Conditional Fee Agreement (CFA), claimants cannot simply terminate that agreement and get QOCS protection.

Lord Justice Longmore in the Court of Appeal heard the case of Catalano v Espley-Tyas Development Group Limited [2017], in which the claimant entered into a conditional fee agreement in June 2012, in order to bring a personal injury claim for hearing loss she allegedly suffered as a textile worker. Having entered into a funding arrangement the claimant’s application for After-the-Event insurance was rejected. The claimant had already incurred the costs of instructing a medical expert and issuing proceedings at that stage. After directions were handed down the claimant discontinued her claim.

Upon the claimant filing her notice of discontinuance, the defendant served a Bill of Costs on the claimant. The claimant's solicitors asserted that qualified one-way costs shifting applied on the basis that the claimant terminated her CFA and entered into a funding arrangement after 1 April 2013.

The claimant sought to rely on the first instance decision of Casseldine v Diocese of Llandaff [2015], in which the court was asked to decide whether a claimant was entitled to QOCS protection having entered into a pre-commencement funding arrangement with one set of solicitors before seeking new representation. A second CFA was entered into with the second set of solicitors post 1 April 2013. Accordingly the Regional Costs Judge, District Judge Phillips found that QOCS did apply.

The Court of Appeal in Catalano found that “… Ms Catalano’s solicitors did provide services to her before 1 April 2013 since proposals for ATE insurance were made (although in the event those proposals were declined) and experts were retained, one of whom even submitted a report before 1 April 2013.”

Accordingly the court found that a pre-commencement funding arrangement was entered into and that the claimant was not entitled to abandon that position in favour of seeking QOCS protection.

The Court of Appeal said that it preferred not to express a concluded view on what should happen if no work had been done under the first CFA. The Court of Appeal also cast some doubt on the validity of the decision of Casseldine.

The claimant's appeal was dismissed and the claimant was ordered to pay the defendant's costs.

What this means for you

We are now four years past the introduction of the Jackson reforms which brought in QOCS and sought to do away with CFAs. These sorts of case are becoming more rare, but in the event you are faced with a pre-QOCS claim with a funding arrangement in place, you are entitled to the cost consequences and can prevent claimants from trying to fall under the QOCS regime.