Yvette Thomas v Southwick Car Centre Ltd

A pre-commencement funding arrangement for the purposes of the QOCS transitional provisions does not need to be enforceable. It is sufficient that the relevant CFA or ATE policy was entered into before 1 April 2013 and falls within the applicable statutory definition. An unenforceable agreement is not thereby void or non-existent. A CFA and an ATE policy are legally distinct arrangements, so the invalidity or absence of one does not necessarily affect the existence of the other. A claimant may also be estopped by convention from asserting QOCS protection where authorised representatives clearly represented that QOCS did not apply, the defendant relied on that representation, and the reliance caused detriment.

The claimant’s personal injury claim against the defendant was dismissed by the County Court in 2017, with an order that she pay the defendant’s costs. A further costs order was made in 2021. The detailed assessment was transferred to the Senior Courts Costs Office.

As a preliminary issue, the court considered whether the claimant had QOCS protection. The claimant contended that a CFA entered into in August 2012 was an empty or invalid agreement, and that an October 2012 ATE policy consequently provided no relevant protection. The central questions were whether either arrangement constituted a pre-commencement funding arrangement, whether unenforceability affected that status, and whether the claimant was estopped from relying on QOCS.

1. QOCS protection refused. The August 2012 CFA and October 2012 ATE policy were both pre-commencement funding arrangements within CPR 48.2. The CFA was entered into before 1 April 2013 for litigation services and work was performed under it before that date. The ATE policy was also taken out before that date and would have permitted recovery of its premium if the claim had succeeded.
2. The statutory definition does not require enforceability. The court rejected the attempt to add that requirement to the definition. Unenforceability is distinct from non-existence, and an unenforceable CFA does not simply cease to exist. The evidence did not establish that the CFA was unenforceable in any event.
3. The ATE policy was an independent contract between the claimant and insurer. The policy’s requirement for the claimant to enter into a CFA was a condition of cover. Failure to satisfy that condition could affect cover, but could not make the policy void or non-existent.
4. The circumstances considered in Catalano v Espley-Tyas Development Group Ltd were materially different. Work had been undertaken under the CFA before April 2013, and the claimant terminated it only years later. The agreement was not an empty or shell agreement.
5. Alternatively, the claimant was estopped by convention from claiming QOCS protection. Applying the five-part approach identified in Tinkler v Revenue and Customs Commissioners, there was a shared assumption, communicated reliance, actual reliance in subsequent dealings, and detriment. The claimant’s authorised representative had told the court and defendant that this was not a QOCS case.
6. The representations also deprived the defendant of the opportunity to seek a finding of fundamental dishonesty under CPR 44.16(1), and caused expenditure on detailed assessment proceedings. The claimant’s conduct was capable of satisfying the test discussed in London Organising Committee of the Olympic and Paralympic Games (In Liquidation) v Sinfield. The court therefore concluded that QOCS protection did not apply.