What is CPR 44?

The general rules on costs set out in CPR 44 (Civil Procedure Rules, Part 44) in England and Wales include:

• The general rule is that the court will make an order that the unsuccessful party pays the costs incurred by the successful party (CPR 44.2(2)(a)).
• The court may make a different order if it considers that there are good reasons to do so (CPR 44.2(2)(b)).
• In deciding what order to make, the court will take into account all the circumstances of the case, including the conduct of the parties, the amount of costs claimed, and the parties’ conduct in relation to any offers to settle (CPR 44.2(4)).
• The court may also take into account the extent to which a party has succeeded on particular issues, even if the party has not been wholly successful in the case as a whole (CPR 44.2(5)).
• The court may disallow costs that are deemed to be unreasonable or disproportionate, including where the costs are disproportionate to the amount in dispute (CPR 44.3(2)).
• Where there is more than one issue in the case, the court may apportion costs according to the outcome of each issue (CPR 44.2(6)).

These rules are subject to the court’s discretion, and the court may depart from them if it considers that there are good reasons to do so. The aim of these rules is to ensure that costs are proportionate, reasonable, and justly apportioned between the parties.

Changes to QOCS rules CPR 44.14

The Civil Procedure Rule Committee announced a change to qualified one-way cost shifting rules to come into force in April 2023. The rule change will ultimately allow defendants to enforce costs orders made in their favour against orders made in the favour of claimants.

The current CPR 44.14 reads as follows:

Effect of qualified one-way costs shifting

(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the claimant.

(2) Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.

(3) An order for costs which is enforced only to the extent permitted by paragraph (1) shall not be treated as an unsatisfied or outstanding judgment for the purposes of any court record.

The new amended rule is below:

Effect of qualified one-way costs shifting

44.14

(1) Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages or agreements to pay or settle a claim for, damages, costs and interest made in favour of the claimant.

(2) For the purposes of this Section, orders for costs include orders for costs deemed to have been made (either against the claimant of in favour of the claimant) as set out in rule 44.9.

(3) Orders for costs made against a claimant may only be enforced after the proceedings have been concluded and the costs have been assessed or agreed.

(4) Where enforcement is permitted against any order for costs made in favour of the claimant, rule 44.12 applies.

(5) An order for costs which is enforced only to the extent permitted by paragraph (1) shall not be treated as an unsatisfied or outstanding judgment for the purposes of any court record.

The revised Rules now permit Defendants to recover costs up to the amount of any order, agreement, or settlement made in favour of the claimant for damages, costs, and interest. As a result, successful claimants are now more vulnerable to the costs implications of Part 36 offers.

Additionally, the Defendant’s costs can now be used to offset the Claimant’s costs, exposing the Claimant to the risk of having to pay the remaining balance if the amount they receive in costs is insufficient to cover their solicitor’s fees.

These changes will create additional hurdles for victims who have been injured due to someone else’s negligence, making it more challenging for them to receive the compensation they are entitled to. It also means that Claimants and their legal representatives will need to exercise more caution regarding interim applications as there will be an increased likelihood of adverse costs order being enforceable.

How Can ARC Costs Assist?

ARC Costs are an experienced and independent team of specialised Costs Draftsmen and Costs Lawyers. We assist both paying and receiving parties in resolving costs disputes, and are adept at preparing Costs Budgets and Bill of Costs for receiving parties, as well as providing legal costs negotiations services and preparing Points of Reply. For paying parties, we are adept at preparing Points of Dispute, and ensuring that a proportionate level of costs is recovered. Proportionality is a subjective issue, and it is therefore important you have the right legal costs representative on your side during detailed assessment to ensure you make the most persuasive submissions on the issue.  Should you require any assistance or free initial advice, please feel free to call us on 01204 397302, or email one of our costs experts direct on info@arccosts.co.uk.

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