By way of background, the claim in Anne Morgan (on behalf of herself and of the estate of Mr Christopher John Morgan) v Dr Chongtham Singh related to a medical negligence matter and centres around the alleged negligent treatment of a Baker’s cyst. The claimant, Christopher Morgan, instructed Irwin Mitchell and entered into a conditional fee agreement (CFA) which provided for a success fee. However, as a result of an unrelated condition, Mr Morgan sadly passed away in December 2014. His wife, Anne Morgan, decided to pursue the claim on behalf of the estate and herself. She subsequently entered into a post-Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) CFA which, under the subsequent rules, meant that she was not entitled to a success fee.
Within the main action, the matter proceeded to trial in February 2017. At that time, the claim was dismissed with costs awarded to the defendant, subject to assessment. At this point, the claimant made clear its intention to pursue an argument that Mrs Morgan was entitled to qualified one-way costs shifting (QOCS) protection.
The parties agreed to have the point determined as a preliminary issue in the detailed assessment.
First instance decision
The claimant’s position on this was a relatively simple one. Mr Morgan and Mrs Morgan were not the same person, nor were they the same party. Mr Morgan had the benefit of a pre-April 2013 CFA with a recoverable success fee and a recoverable pre-April 2013 after the event (ATE) insurance premium. As such, it was accepted that Mr Morgan did not have QOCS protection. However, Mrs Morgan did not have the benefit of either a pre-April 2013 CFA or ATE policy. Had Mrs Morgan been successful in her claim, she would never have been entitled to a success fee or ATE policy from the date that her late husband passed away and during which time she was the claimant. As a result, there was no bar nor exception to QOCS in respect of the period post death.
The defendant submitted that for the claimant’s argument to be successful, the claimant had to show that the claim brought by Mr Morgan and the claim brought by Mrs Morgan were two separate sets of proceedings for the purposes of CPR 44.13(1) and 44.17. This was based on the notion that QOCS applies to the entirety of a set of proceedings or it does not apply at all.
Batchelor DJ, sitting in the Sheffield County Court, determined that Mrs Morgan did have QOCS protection. Her reasoning was that Mrs Morgan was not the same claimant as Mr Morgan and did not have the benefit of a pre-commencement CFA; as a result, CPR 44.13 applied and Mrs Morgan had QOCS protection. In the alternative, Batchelor DJ found that if she was wrong on that construction and there was a need to consider both CPR 44.17 and CPR 48.2, then she would also find in favour of the claimant in that Mrs Morgan did not have a pre-commencement CFA in respect of a matter that was the subject of the proceedings in which a costs order had been made against her.
Evaluating the QOCS rules, Batchelor DJ stated:
“QOCS is a form of personal protection, protecting a particular claimant/person/party from the effects of an adverse costs order made against them. It is a personal protection and is lost if that person has entered into a pre-commencement funding arrangement (PCFA).
Although the proceedings themselves must be within the scope of the proceedings set out in CPR 44.13, the protection afforded by QOCS does not apply to ‘the proceedings’ or ‘the claim’, but to ‘the enforcement of orders for costs made against a claimant’ within those proceedings (CPR 44.14).”
Further to this, in addressing the defendant’s primary submission, Batchelor DJ concluded:
“To determine the enforceability of the order against Mrs Morgan in her capacity as executrix of Mr Morgan’s estate the court must consider whether Mrs Morgan came within the [CPR] 44.17 transitional provision exception to take her outside of QOCS protection and to determine that the court must consider whether Mrs Morgan had a pre-commencement funding arrangement (PCFA) as defined in [CPR] 48.2. Plainly in my view she did not, therefore the [CPR] 44.17 exception does not apply.
I do not consider there to be any inconsistency with the CPR to find Mr Morgan was the claimant in the proceedings up to his death and thereafter Mrs Morgan was the claimant in her capacity as executrix of his estate in the same proceedings. It was the status and legal entity of the claimant which altered not the proceedings themselves. ‘Proceedings’ can have different meanings in the context of different situations. As such I do not accept the defendant’s submission that for Mrs Morgan’s argument to succeed I must construe there to be two sets of proceedings.”
Appeal
The defendant, who had been awarded permission to appeal by the DJ, lodged their grounds of appeal as follows:
- QOCS applies or does not apply to “proceedings” and that this was (as the respondent conceded) one set of “proceedings”. QOCS has to apply to all of the defendant’s costs or none of those costs.
- QOCS had been treated as applying or not applying to a particular claimant when there was no basis in the rules for such an approach.
- The decision gave the effect that a single costs order in favour of one party and against another party is partially enforceable and partially unenforceable. There is no basis for such a result in the QOCS rules.
- CPR 44.17 should be construed so that it caught Mr Morgan’s pre-commencement funding arrangements even while Mrs Morgan was the claimant.
- The decision imposed the worst of both regimes on the appellant in that he would have been liable to pay a success fee and for an ATE insurance premium had the claim succeeded, but he cannot recover the bulk of his costs now that it has failed.
The matter was heard before HHJ Robinson in Sheffield in January 2020. In his judgment, he summarised that the main point in issue was whether QOCS protection applies to individual claimants or to proceedings. Again, the claimant was successful and the appeal was dismissed.
HHJ Robinson agreed with DJ Batchelor’s analysis at first instance when stating that, should Mrs Morgan not be entitled to QOCS protection, she would be left in a more disadvantageous costs position than her late husband, leaving her exposed to the adverse costs risks but unable to recover the additional liabilities:
“I agree with that analysis [of DJ Batchelor at first instance]. This was not a case of an existing ATE policy being topped up. It was new. The parties were new. The CFA was new. The constituent components comprising the balance of risk were new.”
Discussing the issues at hand in the judgment, HHJ Robinson stated:
“The situation in this case is not expressly covered by the CPR. There must be a solution. The solution which I prefer applies only to a situation where:
(1) Proceedings within CPR 44.13 are commenced by an individual who has entered into a PCFA;
(2) After 1 April 2013 that individual dies;
(3) The claim is continued on behalf of the estate and/or on behalf of the dependents of the deceased by a Personal Representative.”
This, he concluded, allowed Mr Morgan to have commenced proceedings with a PCFA as the claimant until he died. Following this, Mrs Morgan was able to bring proceedings in her own right. At the end of the trial, it then fell to consider CPR 44.17. As Mrs Morgan was not a claimant who had entered into a PCFA, she was entitled to QOCS protection:
“It seems to me that the purpose of QOCS regime is to give protection to individuals rather than to the somewhat ethereal concept of ‘proceedings’. It is not ‘proceedings’ which require QOCS protection. It is individual claimants. It is not ‘proceedings’ which enter into pre-April 2013 CFAs and ATEs. It is individuals. It is not ‘proceedings’ against which costs orders are made. It is claimants. That is surely why CPR 44.14(1) and (2) speak of ‘orders for costs made against a claimant’ (emphasis added).”
The decision
The judgment of HHJ Robinson is consistent with the first instance decision of DJ Batchelor. What is clear in his findings is that QOCS protection is there for the benefit of claimants. It has been made clear in cases such as Catalano that claimants cannot use the QOCS rules to gain an advantage, but in this case, where unfortunate circumstances have led to the change of claimant, they must be protected with QOCS.
The final outcome is crystal clear in dismissing all the grounds raised by the appellant. Claimants are not to be left with the worst of both worlds when contemplating taking over a pre-LASPO case and overly technical interpretations of proceedings are irrelevant. QOCS applies to claimants, not sets of proceedings.
