Muhammad Tanveer Amjad v UK Insurance Limited

Under CPR Part 44, the QOCS enforcement gateways concerning claims benefiting a third party and claims benefiting the claimant generally operate as alternatives. The court must identify who obtains most of the benefit of the relevant head of loss. A credit-hire claim will ordinarily benefit the credit-hire company where the claimant has not paid the charges and any residual liability is largely technical.

Where gateway (b) applies, the court must assess the proceedings in the round and begin from the costs-neutral protection afforded to the personal-injury claim. Any departure requires consideration of all the circumstances, including conduct, the relative value and costs of the personal-injury and non-personal-injury claims, the claimant’s means, and actual liabilities. A failure to consider material factors is an error of law.

The claimant appealed against a County Court costs order made after a road traffic accident claim. He had recovered damages for personal injury, vehicle repairs, limited hire and loss of profit, but failed to recover substantial credit-hire charges after being debarred from relying on impecuniosity.

The trial judge ordered the defendant’s costs to be enforceable up to £15,000 under CPR r.44.16(2), finding that the credit-hire claim was made for the benefit of a person other than the claimant and, tentatively, that the claim also fell within the claimant-benefit gateway. The central issues were whether both gateways could apply, whether the proceedings were properly characterised as a mixed personal-injury claim, and whether lifting the QOCS cap was just.

1. Appeal allowed. Paragraph 5 of the County Court order was set aside. Enforcement of the defendant’s costs was capped under CPR r.44.14(1).
2. On the proper construction of CPR r.44.16(2), gateways (a) and (b) are generally alternatives. The relevant question is who obtains all or most of the benefit of the particular claim. Gateway (a) concerns a claim made for the financial benefit of another person. Gateway (b) concerns a non-personal-injury claim made for the claimant’s benefit.
3. The credit-hire charges claim would have financially benefited the credit-hire company. The claimant’s contractual exposure was only a residual benefit. Gateway (a), rather than gateway (b), therefore applied. Since the defendant had not sought a non-party costs order and the trial judge had not applied the statutory and procedural tests governing such orders, the judge had no proper basis to lift the cap against the claimant under gateway (a).
4. Alternatively, if gateway (b) could apply, the judge wrongly characterised the proceedings as non-personal-injury proceedings. The claim should have been assessed in the round. The court should have considered whether the personal-injury claim remained the dominant character of the proceedings and whether exceptional features justified departing from the costs-neutral QOCS starting point.
5. The relevant justice assessment included the parties’ conduct, the damages lost through failure to beat Part 36 offers, the relative value of the personal-injury and non-personal-injury claims, the costs and trial effort attributable to each, the defendant’s costs compared with the damages, the claimant’s financial position, and his actual liabilities for costs, insurance and funding charges. The ordinary conduct of litigation and rejection of Part 36 offers did not ordinarily amount to exceptional conduct.
6. The trial judge failed to consider material factors, including the defendant’s delay in raising the disclosure point, the claimant’s modest means, causation of the costs, and the proper relative value of the disputed claims. That failure was an error of law justifying appellate intervention.

• High Court (King’s Bench Division): appeal from the costs decision of HHJ Pearce at Manchester County Court dated 27 July 2022 and sealed on 16 September 2022. Appeal allowed and the costs-enforcement order set aside.