Notice of Discontinuance Costs Consequences
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What is a Notice of Discontinuance?
If a Claimant discontinues a claim against a Defendant which they have pursued, they will do so by filing a Notice of Discontinuance to the relevant Court. When doing so, costs consequences will apply pursuant to Civil Procedure Rules 38.6 (1).
CPR 38.6 (1) states the following:
‘Unless the Court orders otherwise, a claimant who discontinues is liable for the costs which a defendant against whom the claimant discontinues incurred on or before the date on which notice of discontinuance was served on the defendant.’
If the Defendant had a claim struck out as opposed to it being discontinued by the Claimant, then a costs order made by the Court is enforceable without the Court’s permission under CPR 44.15. However, if a Notice of Discontinuance has been filed and upheld, QOCS will apply, and the Defendant’s costs will not be enforceable.
The following case law had dealt with the issue of Notice of Discontinuance Costs.
Brian Kite -v- The Phoenix Pub Group (2015)
The case of Brian Kite -v- The Phoenix Pub Group (2015) was a claim for an accident whereby the Claimant suffered damages due to an uncovered manhole in a pub car park. During the course of the proceedings, an application was made to strike out the Claimant’s case as the Defendant company being pursued was not the operator of the pub at the time of the incident and therefore they argued they did not owe a duty of care to the Claimant. A hearing was set for the application to be heard, and then it was adjourned in order for the Claimant to have more time to make further investigations. A few days before the date of the hearing, the Claimant filed a Notice of Discontinuance to the Court discontinuing the claim against the Defendant.
The Defendant made an application to have the Notice of Discontinuance set aside and to proceed with its application to have the case struck out. They argued that the Claimant’s solicitors were acting in a tactical manner and that the granting of the discontinuance notice would mean there was an unjust result for the Defendant as they would not be entitled to a costs order. The Court relied on the overriding objective. It was held that the Claimant’s late service of the Notice of Discontinuance after an application was made to adjourn the hearing was unfair and the Claimant did not suffer any prejudice in having the order set aside as they were still provided with an opportunity to submit their arguments in the strike out application.
The Defendant’s application was therefore successful in setting aside the Notice and in having the claim struck out. The Defendants were awarded their costs and were able to enforce the costs order which were made in line with Rule 44.15.
Renwick and Mitchell -v- Markerstudy Insurance Co Ltd (2015)
The case of Renwick and Mitchell -v- Markerstudy Insurance Co Ltd (2015) involved two Claimants who discontinued their claims when the Defendant’s case and its merits were disclosed by way of witness statements. The Defendant made an application to have the notices set aside and sought an order to be made under CPR 44.15. In this instance, the Judge found that the Defendant needed to have a ‘high bar’ to convince the Judge that QOCS protection should be lost. The Judge concluded that there were adverse inferences which could be drawn from the Claimant’s late filing of the Notices of Discontinuance and withdrawal of the claim. The claims were struck out, and it was ordered that the Claimants had abused the process. The Claimants were also ordered to pay the Defendant’s costs, as per Rule 44.15.
Edwards -v- Bristol City Council (2017)
In the more recent case of Edwards -v- Bristol City Council (2017), the Defendant made an application to have a late Notice of Discontinuance set aside under CPR 38.4. The Defendant argued that the Notice was a tactical action in order to avoid the case being struck out with the Defendant’s costs being awarded and being ordered as enforceable. The case was struck out, and the Notice set aside on the basis that there
were no grounds on bringing the claim on the Notice of Discontinuance.
In the case of Issa -v- Bristol City Council (2017) the Judge made an order for wasted costs as per CPR 46.8 when the Defendant successfully applied to have the Claimant’s discontinuance set aside.
What Can We Learn from the Case Law?
The cases clearly show that it is continuously important to have a robust stance when applying to have a matter stricken out for breaches of CPR. When assessing applications to have a Notice of Discontinuance set aside and applications to strike the matter out, the Judges seem to consider the following:
- The fairness of the Notices being filed and the fairness of having the claim struck out in line with the overriding objective
- The conduct of the Claimant and the Claimant’s solicitors
- Whether the filing of the Notice of Discontinuance was a tactical move and what was to gain from filing the same.
- The timing of when the Notice of Discontinuance was filed.
If the Defendant is successful in having a Notice of Discontinuance set aside, the benefit of doing so seems to fall under rule 44.15 of the CPR, namely that the costs orders made will be enforceable without the Court’s permission before doing so.
How can ARC Costs help?
ARC Costs are a team of specialist Costs Draftsmen and Costs Lawyers who have vast experience in dealing with both paying party and receiving party costs. We deal with costs recovery and can assist in advising you in relation to your costs entitlement. We can also assist with costs enforcement to ensure your costs are paid and recovered once agreed or assessed. If you require any further information or would like our assistance, please contact us on 01204 397 302.
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