Aidan Chappell v Bartlomiej Mrozek

Under the QOCS regime, a defendant’s costs order cannot be enforced against a settlement sum arising from acceptance of a Part 36 offer, because that sum is not an order for damages and interest within CPR 44.14(1). The wording of the rule cannot be expanded by purposive construction or judicial case-management powers to address perceived policy gaps or unfairness. [2018] EWCA Civ 1654 and [2021] UKSC 43 establish that enforcement is governed by the rules’ straightforward wording. Any change to the balance between settlement incentives and QOCS protection is a matter for the Civil Procedure Rule Committee. The defendant therefore could not set off its agreed costs liability against the claimant’s settlement sum.

The claimant brought a personal injury claim arising from a serious road traffic accident. The defendant made a Part 36 offer of £250,000, which the claimant accepted outside the relevant period. The parties agreed the claimant’s liability for costs under CPR 36.13(5), but disputed whether the defendant could enforce those costs by set-off against the unpaid settlement sum under the QOCS rules.

The claimant relied on Cartwright v Venduct Engineering Limited and Adelekun v Ho. The defendant argued that those decisions did not govern the issue, that Part 36 settlements should be treated as orders for damages, and that the court could make an enforcement order under CPR 36.14(7) or CPR 3.1(2)(m). The central issue was whether CPR 44.14 permitted enforcement against the settlement sum.

1. The defendant’s application was dismissed. The claimant was entitled to payment of the agreed settlement sum, without set-off of the defendant’s costs order arising from late acceptance.
2. CPR 44.14(1) permits enforcement of costs orders only to the extent that they do not exceed orders for damages and interest made in favour of the claimant. A Part 36 acceptance creates a settlement obligation, not an order for damages and interest within that rule.
3. In Cartwright v Venduct Engineering Limited [2018] EWCA Civ 1654, the reasoning concerning settlements and the meaning of CPR 44.14(1) formed part of the ratio. The reasoning was sufficiently interwoven with the decision on Tomlin orders to apply to Part 36 settlements.
4. Adelekun v Ho [2021] UKSC 43 confirmed that QOCS is a complete code governing enforcement of costs orders against personal injury claimants. The court must apply the wording of the rules even where the result appears unattractive. It is not appropriate to imply additional words into CPR 44.14 to enlarge the enforcement mechanism.
5. The policy material underlying QOCS did not establish that late acceptance of a Part 36 offer should lead to an enforceable costs set-off. The QOCS regime deliberately produces results on a broad “swings and roundabouts” basis, and any amendment is for the Civil Procedure Rule Committee.
6. The decision in MRA v The Education Fellowship Limited (aka Rushden Academy) [2022] EWHC 1069 (QB) was distinguishable. It concerned a protected party and a court-determined costs order under CPR 36.13(5), whereas the parties here had agreed their costs liability.
7. Neither CPR 36.14(7) nor the inherent case-management power in CPR 3.1(2)(m) justified making an order for damages or an equivalent enforcement order. Such judicial intervention would improperly supplement the QOCS rules.

First-instance decision. No prior appellate decision in the same litigation was stated.