The basis of QOCS is that the protection it affords against adverse costs applies to unsuccessful claims for personal injuries. These are conventionally argued in negligence against the defendant whose conduct caused the accident e.g. the negligent driver or employer. But should a statutory claim against an organisation which was not the tortfeasor be regarded as a claim for damages for personal injuries protected by QOCS?
While this question cannot be answered with certainty, the approach in Howe v MIB in the Court of Appeal, in which judgment was given on 6 July 2017, probably offers some clues.
The claimant was injured in France by an untraced vehicle. His claim became time-barred and an attempt was made to pursue a statutory claim against the MIB under the 2003 compensation regulations (SI 2003/37, regulation 13 being the relevant one in this case). That claim was struck out earlier this year because the decision of the Supreme Court in Moreno v MIB meant it was bound to fail. The question for the Court of Appeal was whether the unsuccessful Mr Howe should benefit from QOCS protection?
Under the CPR, the protection afforded by QOCS “applies to proceedings which include a claim for damages – (a) for personal injuries” (Part 44.13). A narrow interpretation of this provision would lead to the conclusion that the protection would not help Mr Howe because his statutory claim, technically, doesn’t fall within that definition. A broader approach would mean he would be protected by the QOCS scheme (subject to any exceptions) from having to meet the defendant’s costs. Lewison LJ summarised the judge’s decision on this point:
“The judge acknowledged that the rationale for QOCS applied to Mr Howe’s claim but nevertheless held that it was outside the scope of CPR Pat 44.13. He reasoned that the claim was a claim to compensation recoverable by statute (rather than in tort at common law); and that the MIB had not been guilty of any breach of duty”.
Lewison LJ however preferred the broader approach. Finding that the Marleasing principles of European law were engaged, he decided that he had to interpret the QOCS rules in a manner that was consistent with EU law – here being the compensation arrangements provided for in the Motor Insurance Directives and given effect (in part) by the 2003 regulations. His reasoning is brief and worth quoting in full:
36. Can the reference in CPR Part 44.13 to “damages for personal injuries” be interpreted, conformably with the Marleasing principle, to include a claim for compensation under regulation 13? The rationale underlying QOCS is, in my judgment, a domestic version of the principle of effectiveness. Those who have (or may have) valid claims for damages for personal injury should not be deterred from pursuing them by the risk of having to pay the defendant’s costs, except in the circumstances laid down by Section II of Part 44. If Mr Howe’s claim under regulation 13 is covered by QOCS he will be in an equivalent position to an injured person who sues an insured driver.
37. The change required is to disapply the common law taxonomy of legal claims to a claim to compensation under regulation 13 and to treat the word “damages” in Part 44.13 as including compensation under that regulation. That is, no doubt, a departure from the “the strict and literal application of the words”. However, I do not consider that it “goes against the grain” of the CPR.
Thus, unless the decision is appealed, QOCS protection will in principle apply to unsuccessful claims against the Bureau under the 2003 regs.
Claims made directly against motor insurers as named defendants are far more common that those against the MIB, to the extent that motor cases are now usually reported in the form ABC v XYZ Insurance. These direct claims are permitted by the Motor Insurance Directives and by regulations made in 2002 under powers in the European Communities Act 1972 (The European Communities (Rights against Insurers) Regulations SI 2002/3061).
The decision in Howe does not resolve whether direct claims should benefit from QOCS protection. But if the use of the Marleasing principles in the Howe case is a clue to the likely approach, then it seems that Howe would fairly strongly suggest that unsuccessful direct claims against motor insurers would be likely to be protected by QOCS (in so far as personal injuries are included).
A further and final thought is that the approach in Howe, given its basis in EU law, is very definitely yet another item for consideration and resolution as part of the Brexit process.