Wagenaar v Weekend Travel Limited and Serradj
Expertise: Personal Injury
Important new case on the application of QOCS to Part 20 claims.
On 31st July 2014 the Court of Appeal handed down judgment in Wagenaar v Weekend Travel Ltd and Serradj  on a number of issues arising from the application of the new one-way costs shifting rules in CPR 44.13 to 44.17.
The Court of Appeal considered the operation of the QOCS provisions for the first time. The decision has important repercussions for the costs consequences in contribution and third party claims arising out of personal injury claims that fail.
The Claimant suffered a severe skiing accident while on holiday in Chamonix and sued the Defendant tour operator under the Package Travel, Package Holidays and Package Tour Regulations 1992, alleging negligence on the part of the Defendant’s supplier, the Third Party ski instructor. The Defendant then brought a Part 20 claim for indemnity or contribution against the Third Party.
After a trial in May 2013, shortly after the QOCS rules came into effect, the Claimant’s claim against the Defendant was dismissed, as was the Defendant’s claim against the Third Party. The Claimant’s claim had not been funded by a relevant pre-commencement funding arrangement. The judge at first instance ordered that costs should follow the event in both the claim and the Part 20 claim, so that the Defendant was awarded its costs against the Claimant and the Third Party was awarded her costs against the Defendant, but he went on to order that that the QOCS rules applied to both claims, so that neither costs order could be enforced. The net effect was that each party was to bear her or its own costs.
Both the Defendant and the Third Party appealed against the costs orders.
The Defendant’s principal argument was that the judge should not have applied the QOCS rules to the case at all because they were ultra vires. It was submitted that the power of the court in relation to costs which was set out in section 51(3) of the Senior Courts Act 1981 could not be trammelled by rules of court such as the QOCS rules.
The Court of Appeal held that this argument 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 and the Defendant’s appeal was dismissed.
The Third Party appealed against the judge’s application of the QOCS protection to the costs order she obtained against the Defendant. 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.
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 plainly requires careful economic consideration where indemnity or contribution claims are contemplated by defendants to personal injury claims, whether arising from accidents abroad or otherwise.
If you have any queries about the 2TG Personal Injury Group, please contact Lee Tyler, senior clerk, by telephone on 020 7822 1203 or by email at firstname.lastname@example.org For queries about the 2TG Travel and Jurisdiction Group, please contact Sam McQuade, deputy senior clerk, by telephone on 020 7822 1208 or by email at email@example.com.