In the second case arising from these proceedings, the Court of Appeal gave guidance on the application of fixed costs and QOCS to the costs of appeals.
Full judgment, dated 21 January 2020
The Appellant had previously succeeded before the Court of Appeal and applied for an order for its costs against the Respondent. The Respondent contended that (i) the costs were fixed under CPR Part 45 and (ii) they were not enforceable because this was a QOCS case.
The CoA found that though there was a discretion to limit costs, it should not be exercised in this case. However, the recovery of those costs was prevented by QOCS.
The parties had previously been before the Court of Appeal in an appeal concerning the late filing of evidence in stage 3 proceedings (see previous blog). The Appellant had succeeded and applied for an order that the Respondent pay the costs of the appeals before the CoA and the circuit judge. R agreed that it should bear the costs but disputed the appropriate regime for quantification and enforcement.
The same court as was previously constituted heard this appeal. At paragraphs 6-9, Baker LJ set out the relevant statutory provisions, being:
- Section 51(1) of the Senior Courts Act 1981, giving the CoA the discretion to order who should pay the costs of and incidental to all proceedings before it and to what extent they should be paid.
- CPR 44.13(1) and 44.14, which set out the provisions of QOCS, namely that orders for costs made against Claimants in PI proceedings are only enforceable up to the extent of any award.
- CPR 45.17, setting out the fixed costs recoverable in a claim such as the Respondent’s.
- CPR 52.19, which gives any appeal court the power, where costs recovery at first instance is normally limited or excluded, to limit the extent of recovery at appeal.
R, unsurprisingly, contended that CPR 45 applied. Sharp v Leeds City Council  EWCA Civ 33 was cited in support. Specifically, R cited the passage of Briggs LJ where he stated that fixed costs applied:
“subject only to a very small category of clearly stated exceptions. To recognise implied exceptions in relation to such claim-related activity and expenditure would be destructive of the clear purpose of the fixed costs regime, which is to pursue the elusive objective of proportionality in the conduct of the small or relatively modest types of claim to which that regime currently applies.”
At paragraphs 10-11, it is recited that R implicitly acknowledged the objective unfairness of such a position in individual appeals by citing the dicta of Dyson LJ at paragraph 26 Lamont v Burton  EWCA Civ 429 (and other similar dicta), which essentially states that (as Briggs LJ stated in Sharp v Leeds) there are “swings and roundabouts” in fixed costs cases, and individual injustices are the price that is paid for overall certainty and consistency.
A, which perhaps had the more obviously attractive argument, submitted that part 52 deals with appeal costs entirely separately from part 45 and that the costs of an appeal will be wholly different from those of a first instance case. Further, in the appeal before the circuit judge, R had applied for and been awarded £4,500 in costs. He had not, at that point, suggested that the fixed costs regime applied. (see paras 12-13).
In supplemental submissions (para 14), R accepted that although rule 52.19 applied, an application of the factors relevant to the exercise of the discretion to limit costs ought to lead to the same result, namely, to restrict the costs to those applicable under fixed costs. He relied on being a single parent with a gross income of £1,500 per month, whereas A is a limited company with a turnover in excess of £1bn. He also submitted that the costs on appeal were vastly disproportionate to the value of the case. Finally, reference was made to para 52.19.1 of the White Book 2019, which states:
“In principle it seems right that where it has been seen fit to design a particular first instance jurisdiction so that no costs are recoverable or recoverable costs are restricted, the normal cost shifting rule should not apply to appeals, at least not in its full rigour. Otherwise, the policies justifying costs protection by jurisdictional means (as distinct from protection by bespoke court orders in the form of protective costs orders or costs capping orders in individual cases) could be undermined.”
By contrast, A stated (para 15) that (i) R chose to litigate the appeal, (ii) it is just to compensate a successful appellant in costs, (iii) not doing so would encourage unmeritorious arguments before the appeal courts, (iv) access to justice is promoted by encouraging parties to think carefully before embarking on litigation and (v) it was wrong in principle for R to be able to invoke the limiting discretion where he was awarded assessed costs of the first appeal.
At paragraphs 16-23, the court cited the relevant QOCS authorities. The first was Hawksford Trustees Jersey Ltd v Stella Global UK Ltd and Anor  EWCA Civ 987. This case concerned the question of whether or not a trial and an appeal from the trial were the same proceedings, in relation to the recoverability of an ATE premium under s29 Access to Justice Act 1999. The majority held that they were separate. At paragraphs 42 and 58, Rix LJ had acknowledged that they could be thought to be the same proceedings, they had clearly been treated as different for the purposes of costs. Etherton LJ had noted at paragraphs 61 and 63 that one could construe proceedings either widely or narrowly, but that the narrower construction best reflected the legislative purpose.
The second authority was Wagenaar v Weekend Travel Ltd  EWCA Civ 1105, in which the CoA held that a part 20 claim brought by a defendant to a QOCS claim was not itself protected by QOCS.
The final authority was Parker v Butler  EWHC 1251 (QB), which was on substantially the same point as the present case. Edis J had concluded that QOCS applied to an appeal in just the same way as it applied to the first instance proceedings, notwithstanding the provisions of CPR 52.19. He had done so on the basis that, following Hawksford v Stella Global, that construction most justly achieved the purpose of the QOCS regime, namely, to protect access to justice for impecunious claimants.
The court gave its decision at paragraph 24 onwards. Its starting point was s51 SCA 1981 and CPR 52.19, namely that the costs were in their general discretion and they had a power to limit recovery.
At paragraph 25 Baker LJ gave his reasons for not being persuaded that the discretion should be exercised. R had filed a wholly unmeritorious appeal, relying on his own failures to comply with the protocol. In those circumstances A was entitled to its costs notwithstanding the difference in the parties’ financial circumstances and the wider implications for access to justice.
However, he concluded, at paragraphs 28 and 29, that Edis J had been right to conclude that appeals are also protected by QOCS. He found that Hawksford and Wagenaar were not contradictory appeals, in that they both demonstrated that the word “proceedings” needed to be interpreted to reflect the legislative purpose. Failure to extend QOCS protection to appeals would do nothing to serve the purpose of the regime itself. He concluded:
“I therefore conclude that any appeal which concerns the outcome of the claim for damages for personal injuries, or the procedure by which such a claim is to be determined, is part of the “proceedings” under CPR r.44.13. This interpretation applies even where, as here, (a) the court is dealing with a second appeal, (b) the appeal is brought by the defendant to the original claim, and (c) the court has declined to exercise its discretionary powers to limit recoverable costs under CPR 52.19.”