Earlier this month, there were some seismic amendments made to the Civil Procedure Rules (CPR) which will see, from April 6th this year, successful Defendants being allowed to recover their legal costs in certain circumstances following conclusion of an action by a Part 36 settlement – reversing the protection afforded to personal injury claimants from QUOC’s (qualified one-way costs shifting) and the previous court rulings in the cases of Cartwright, Ho and Harrison.
Whereas the rulings in Cartwright and Ho focused on protecting the claimant, the recent amends to court rules creates a more favourable costs regime for the defendants.
When the new rules come into force, a defendant that has secured a costs order will be able to enforce recovery of those costs against any compensation monies paid to the claimant as part of the settlement – potentially leaving the claimant with nothing for their troubles. Prior to the rule change, defendants were not allowed to enforce such entitlement, which had the effect of protecting all of the clients damages.
The rule change will most likely result in a surge in proceedings before the changes to come into effect in April.
The new rules may also impact ATE insurance policies, with premiums expected to increase in line with the increase in risk.
Jamie Patton, Managing Director of Johnson Law Group, said: “This costs rule reversal is a travesty and is indicative of the way in which Claimant law firms are viewed by the law makers. Ultimately, the balance of power has changed hands and claimants are on the losing side. This will have major ramifications across the claimant sector and will once again erode access to justice for many victims of accidents as litigation risk and legal expense insurance costs rise.”
