Nathaniel Birley & Anor v Heritage Independent Living Ltd

Qualified one-way costs shifting (QOCS) applies to proceedings that include a claim for damages for personal injury. It does not depend on the cause of action being negligence. A genuine privacy or confidence claim including psychiatric injury may therefore fall within the scheme. The rules governing recovery of conditional-fee success fees and after-the-event insurance premiums operate by reference to the category of proceedings. They can coexist with QOCS where publication and privacy proceedings also include a personal injury claim. Full enforcement of costs under the QOCS abuse exception requires both a strike-out and a strike-out on the specified ground. Pre-action errors, late service and protocol non-compliance do not constitute abuse without conduct crossing the high threshold required for strike-out.

The estate of Ms Rosa Taylor brought proceedings against Heritage arising from the alleged disclosure of her previous convictions. The claim pleaded privacy, confidence and data-related causes of action, together with psychiatric injury. The claim form was served late. District Judge Nicolle set aside service, declared that the court had no jurisdiction, struck out the claim, ordered costs and disapplied QOCS for abuse of process.

HHJ Owen upheld the court’s power to strike out and award costs, but found no abuse, restored QOCS protection and allowed the appeal on that issue. Heritage appealed on abuse of process, pre-action protocol compliance, the concurrent operation of media-claim funding rules and costs. Heritage was dissolved before the hearing, and its insurers were joined. The central questions were whether the conduct justified strike-out and whether QOCS could coexist with the applicable media-claim funding provisions.

Birss LJ gave the judgment of the court, with the Lady Chief Justice and Lord Justice Warby agreeing. The appeal was dismissed.

1. Joinder of insurers. Under Civil Procedure Rules 1998 r19.2(2)(b), the insurers could be joined at the appellate stage because the costs issue was connected with the dispute and joinder was desirable to achieve a binding resolution. The rule did not require the court to decide the insurers’ ultimate liability at the joinder stage.
2. QOCS. The scheme in CPR Part 44 is triggered by proceedings which include a claim for damages for personal injury. It is not confined to negligence claims. The pleaded claim for psychiatric injury caused by an alleged wrongful disclosure therefore fell within r44.13. Under r44.15, full enforcement of a costs order requires both a strike-out and a strike-out on one of the specified grounds, including abuse of process.
3. Abuse and strike-out. Abuse of process is an evaluative question, while strike-out remains discretionary and is a remedy of last resort. The principles summarised in Aldi Stores v WSP Group [2008] 1 WLR 748, Aktas v Adeptas [2010] EWCA Civ 1170 and Cable v Liverpool Victoria [2020] EWCA Civ 1015 permitted consideration of pre-action conduct. The anonymised letters, mistaken date, failures to notify and late service were lax or unreasonable, but neither individually nor cumulatively amounted to abuse. A negligent failure to serve in time was not abuse without more.
4. Protocols and funding. The MAC Protocol was relevant after it came into force, the spirit of the Personal Injury Protocol could be followed for a potentially multi-track claim, and the general protocol remained relevant if no specialised protocol applied. The choice or imperfect use of a protocol did not itself establish abuse. The funding regimes were not mutually exclusive. Before 6 April 2019, publication and privacy proceedings could permit recovery of a success fee, while ATE premiums remained recoverable, and QOCS could simultaneously apply because personal injury damages were claimed.
5. Other procedural matters. The caution against new points on appeal identified in Singh v Dass [2019] EWCA Civ 360 applied with particular force on a second appeal. The court would not entertain new, undeveloped allegations of protocol flouting. HHJ Owen was entitled to award all the costs of the first appeal to the overall winners, despite their failure on some grounds, and there was no basis for appellate intervention.

The appeal was dismissed. Any remaining dispute concerning the insurers was left to be notified to the court for directions.

1. Nottingham County Court: District Judge Nicolle set aside service, declared that the court had no jurisdiction, struck out the claim, ordered costs and disapplied QOCS on the basis of abuse of process.
2. Nottingham County Court, on appeal: HHJ Owen upheld the power to strike out and award costs, but found no abuse, varied the costs order to reflect QOCS and declared that QOCS applied.
3. Court of Appeal (Civil Division): The insurers were joined under Civil Procedure Rules 1998 r19.2(2)(b), and Heritage’s appeal was dismissed.