The government has answered some of the fundamental questions about how its new system for transferring the costs burden in personal injury cases will work.
Under the new system, claimants are intended to be protected from defendants’ costs in most cases; even when they lose; with the new system designed to remove the need for claimants to take out “after the event” premium insurance, which will no longer be recoverable from defendants when they win.
Following the announcement of the new system, the Ministry of Justice, in a commissioning note to the Civil Justice Council, have revealed its decisions on several key elements of the new rules – which must be implemented, according to the government’s timetable, no later than April next year.
One of the key questions answered by the government is what happens to QOCS protection when a claimant rejects an offer made under part 36 of the Civil Procedure Rules.
In what will be seen as a blow for claimants, the Ministry of Justice have said that: “If a claimant fails to beat a defendant’s part 36 offer, the part 36 principles will apply, but only up to the level of damages recovered.”
However, claimant lawyers have argued that allowing part 36 to “trump” QOCS in this way would produce too much uncertainty for claimants over whether they may become liable for the other side’s costs, prompting a need to take out “after the event” insurance, and potentially undermining one of the main objectives of the QOCS regime.
The Ministry of Justice have also confirmed that claimants will not need to pass any financial test in order to benefit from QOCS, but it is seeking advice from the Civil Justice Council on whether losing claimants should have to make a minimum payment.