Corstorphine (An Infant) v Liverpool City Council

The transitional QOCS provisions protect a claimant only where the pre-commencement funding agreement relates to the matter covered by it. A CFA and ATE policy taken out for a personal injury claim against one defendant do not remove QOCS protection for claims later brought against additional defendants where those claims were not covered by the agreements. A costs judge must treat that protection as highly material when deciding whether to make the claimant indirectly liable for costs incurred between defendants. An order which effectively recovers costs that could not be enforced directly is unjust and disproportionate.

An infant claimant brought a personal injury claim against Liverpool City Council after suffering injury on a tyre swing. The Council issued a Part 20 claim against the swing’s manufacturer and supplier, who were joined to the primary claim. Before the QOCS regime began, the claimant entered into a CFA and ATE policy which identified the Council as the opponent.

The primary claim was dismissed at trial, with the additional claim consequently failing. The recorder held that QOCS was disapplied and ordered the claimant to pay the Council’s costs, including costs payable by the Council to the additional defendants. The appeal concerned whether the pre-commencement funding arrangements extended to the claims against those defendants and whether the resulting costs order was properly made.

Hamblen LJ gave the judgment, with which Vos C agreed. The appeal was allowed and the costs order was varied.

1. Meaning of the relevant matter. The Court considered the purpose of the QOCS transitional provisions in rule 44.17 of the Civil Procedure Rules 1998. The reasoning in Plevin v Paragon Personal Finance Ltd [2017] UKSC 23, including the preservation of vested rights and expectations, supported treating the relevant matter as the underlying dispute. That reasoning covered later stages of the same claim, including appeals, but did not determine whether later claims against different parties were covered.
2. Scope of the funding arrangements. The CFA and ATE policy were entered into for the claimant’s personal injury claim against the Council. At that time there were no claims against the manufacturer or supplier, and the claimant had no vested rights or expectations concerning such claims. On the proper construction of rule 48.2(1)(a)(i) and rule 48.2(2)(a)(ii), the relevant matter and proceedings were therefore confined to the claim against the Council. QOCS applied to the claims made against the additional defendants.
3. Costs discretion. In an ordinary case involving closely interconnected primary and additional claims, an order allowing a successful defendant to recover the costs of the additional claim may be unexceptional, as illustrated by Johnson v Ribbins [1977] 1 WLR 1458 and Arkin v Borchard Lines Ltd [2005] EWCA Civ 655. This was not an ordinary case. The effect of the recorder’s order was to make the claimant indirectly liable for costs which could not have been enforced against him directly under QOCS. Wagenaar v Weekend Travel Ltd [2015] 1 WLR 1968 reinforced the distinction between costs relating to the claimant’s personal injury claim and disputes between other parties.
4. The recorder had failed to take account of the highly material fact that QOCS applied to the claims against the additional defendants. His exercise of discretion was therefore erroneous. The fair, just and proportionate order was to exclude from the Council’s recoverable costs any costs of the additional defendants which the Council had been ordered to pay.

• Court of Appeal (Civil Division): On 26 February 2018, the Court allowed the appeal and varied the costs order.
• Liverpool Civil and Family Court: Recorder Edge dismissed the primary claim and consequently the additional claim. In a subsequent costs judgment, he ordered the claimant to pay the Council’s costs, including costs payable to the additional defendants.