Wagenaar v Weekend Travel Ltd

Qualified one-way costs shifting is validly made under the court-rules power. The costs discretion in section 51 of the Senior Courts Act 1981 remains subject to rules regulating the availability, amount and enforcement of costs.

The QOCS rules are procedural and apply from their commencement unless a stated transitional exception applies. They protect a claimant pursuing a personal-injury claim, including that claimant’s associated claims. They do not protect a defendant’s separate contribution or indemnity claim against a third party. Ordinary costs principles govern that additional claim.

The claimant sought damages for personal injuries sustained during a skiing holiday arranged by the defendant. The defendant denied liability and brought a CPR Part 20 claim against the ski instructor for an indemnity or contribution.

After a seven-day trial, the High Court dismissed both claims. In a later costs judgment, it held that QOCS applied both to the claimant’s claim and to the defendant’s additional claim, so that neither costs order could be enforced.

The defendant appealed the validity, temporal application and transitional effect of QOCS. The third party appealed the application of QOCS to the Part 20 claim. The central issue was the proper scope of CPR rules 44.13 to 44.17.

1. The defendant’s appeal was dismissed and the third party’s appeal was allowed. The costs order between the defendant and third party was set aside. The defendant was ordered to pay the third party’s costs, assessed on the standard basis if not agreed.

2. The Court held that section 51 of the Senior Courts Act 1981 must be read as a whole. The court’s full power to determine liability for costs is subject to the rule-making power. Rules of court may regulate whether costs are available, their amount, and the exercise of the discretion. Accordingly, CPR rules 44.13 to 44.17 were within the rule-making power. The reasoning in Aiden Shipping Co Ltd v Interbulk Ltd [1986] 1 AC 965 supported that conclusion.

3. The Court declined to admit the Parliamentary material relied on for construction of section 51. Although there was potential ambiguity and Ministerial material, the statements did not clearly address the precise issue. The conditions applied from Pepper v Hart [1993] AC 593 were therefore not met.

4. QOCS is procedural. Its application from 1 April 2013 was retrospective in the procedural sense, and the rules contained no indication to the contrary. The defendant’s counsel’s pre-commencement conditional fee agreement did not disapply QOCS. CPR rule 48.1 preserved prior rules only so far as they related to funding arrangements, whereas QOCS regulated costs orders generally.

5. On its proper construction, QOCS applies to a claimant’s single claim against a defendant or defendants which includes personal-injury damages, together with other claims made by that claimant. It does not apply to the whole action merely because it contains a personal-injury claim. A defendant’s Part 20 claim for contribution or an indemnity against a third party is outside the regime. Floyd LJ added that the contrary construction would produce unfair outcomes in ordinary cases.

• Court of Appeal (Civil Division). The defendant’s appeal was dismissed. The third party’s appeal was allowed, and the High Court’s non-enforcement of the third party’s costs order under QOCS was set aside.
• High Court, Queen’s Bench Division, Winchester District Registry. HH Judge Iain Hughes QC dismissed the claimant’s personal-injury claim and the defendant’s Part 20 claim. In the subsequent costs judgment, he held that QOCS applied to both claims and stayed enforcement of the respective costs orders.