To QOCS or not to QOCS, that is the question

Mr Brian Kite v The Phoenix Pub Group

The Court has recently given guidance in this case on the operation of QOCS which still remains an area of uncertainty and where the guidance is much welcome.

In this case the scenario involved an adjourned strike out hearing and a late-in-the-day notice of discontinuance.

The Claimant had suffered an accident in the car park of a pub in November 2014.  The named Defendant was a company that owned a number of pubs and whilst the relevant pub had once been operated by it, by the time of the accident it was owned and operated by a different company, Enlighters Ltd. Unfortunately for the Claimant Enlighters Ltd had since dissolved.

The Defendant applied to set aside default judgment and to strike out the claim. The court was satisfied that service had been invalid and judgement was accordingly set aside.

The Judge then had to consider the Defendant’s application to strike out.

In support of the strike out application the Defendant had provided Companies House records.  The Claimant asked for adjournment in order that further investigations could be carried out.   The judge granted this request on the basis that there was no prejudice to the Defendant in allowing the Claimant more time. Although the Judge ordered that the Claimant pay the Defendant’s costs of that hearing.

No evidence was in fact produced by the Claimant following the hearing. And the Claimant’s solicitors informed the Defendant that this case was subject to QOCS and that accordingly they would not be able to enforce the costs order.

In return the Defendant’s solicitors reminded the Claimant that where a case is struck out under CPR 44.15 a cost orders can be enforced to the full extent without the courts permission.

This rule, perhaps, gave the Claimant cause for concern.  They served a notice of discontinuance only a few days before the adjourned strike out hearing.  The effect of this notice would be to deprive the Defendant of an enforceable costs order, since at that stage there was no order for damages in favour of the Claimant, and hence nothing the Defendant could enforce a costs order against (see CPR 44.14).

The Defendant made an application to set aside that notice of discontinuance pursuant to CPR 38.4, in order that the strike out application could proceed at the hearing.

At the adjourned strike out hearing the Defendant’s application to set aside the notice of discontinuance was heard first. The Defendant’s argument was that serving a notice at such a late stage would produce an unjust result.

The Claimant resisted the application on the basis that they were properly entitled to serve a notice of discontinuance, notwithstanding the consequences that that would have for the Defendant under the QOCS regime.

The Judge found that he had discretion to set aside a notice of discontinuance, and was guided in exercising his discretion by the overriding objective, in particular the need to deal with cases fairly.

He agreed that it would be unfair to allow the notice to stand,  accordingly he set the notice aside in order to ensure justice and the parties to be on an equal footing. He found that there was no prejudice to the Claimant, as they would have an opportunity to respond to the application.

The strike out application therefore proceeded, but the Claimant raised no evidence in opposition and so the case was struck out. The Defendant was awarded its costs of both the application to set aside the notice of discontinuance and the application to strike out the claim.

With the claim having been struck out the Defendant will be entitled to enforce the costs orders made, notwithstanding QOCS.

The moral of the story?  A claimant cannot expect QOCS protection when justice does not support it.  it is not a 'get of jail free' card for procedural errors.

See a more detailed note by Rebecca Jones of Hardwicke Chambers (Counsel for the Defendant) on the chambers website.