You’d have hope. Rebellions are built on hope.

-Jynn Urso.

Like the rest of the country, over the last two weeks I have watched with fascination as yet another Conservative Prime Minister commits political suicide with an ill timed election staged mid term, when a sitting government can expect to be at its most unpopular. Although Mrs May may not quite be a “dead woman walking” in Mr Osborne’s charmless and unchivalrous phrase, her political days are plainly numbered.

At the time of writing, she is being slowly crucified by the Tory Press, anxious now to see her gone, and for the Clown Prince, Mr Johnson, to inherit her Iron Throne. Perhaps of most significance to the readers of this blog, the Lord Chancellor of 11 months standing has been demoted, and the Ministry of Justice must now endure with baited breath the appointment of yet another non-lawyer to deal with an overflowing intray of initiatives, including the modernization of the courts, a huge IT initiative, prison reform and last but not least the vexed question of costs reform.

In a sense, the recent political ructions were profoundly predictable. This country has endured nearly a decade of austerity and is now a much more unequal nation, patently not at ease with itself.

Mrs May with her dementia tax, her talk of grammar schools (for the few, not the many) and a free vote for fox hunting, massively misjudged the political mood.

Mr Corbyn in contrast offered to end university tuition fees: the electorate did not blanch.

He offered to nationalise our shambolic railways: the electorate did not flinch.

He offered to pay for social care in old age, by amongst other measures increasing corporation tax.

And the electorate grew thoughtful.

But I digress from the subject of costs.

It is to the latter, that this blog in its determinedly apolitical stance now turns.

It seems to me that of the various costs initiatives and reforms currently underway, those which are deemed necessary by the Civil Service and which do not require primary legislation are likely to survive, those which are seen as superfluous or which require primary legislation, will like the grammar school initiative and a return to fox hunting with hounds be quietly placed in the circular filing cabinet to await kinder days.

Accordingly, I would predict that the issue of fixed costs in clinical negligence cases is likely to proceed, just as reform of the discount rate is likely to proceed because the government or rather HM Treasury is intimately concerned with these reforms as a compensating body.  Moreover no primary legislation is likely to be required for clinical negligence fixed costs.

Further and equally, the Jackson review into fixed costs is likely to bear fruit next month: no primary legislation is likely to be required as the statutory powers are contained in the Senior Courts Act 1981 to make rules on costs.

But the whiplash reforms, I would tentatively suggest are in trouble. Any primary legislation in this field is likely to prove contentious, and I suspect that the embattled Tory minority government has more important and bigger fish to fry. So it may yet be that the reforms which would decimate the road traffic market, simply will not come to pass, in the foreseeable future.

The Small Claims Track limit may yet rise, as that does not require primary legislation: but without the cuts in levels of damages, contemplated by statutory prescription of awards for whiplash injuries, I predict solicitors will simply move to a contingency based arrangement taking 25% of damages in road traffic personal injury claims, in the Small Claims Track, and in a sense it will be business as normal.

If only.

One of the points yet to be argued in relation to the QUOCS regime, is its application to a  scenario involving multiple Defendants. It is commonly  in NIHL claims that a Claimant will start proceedings against half a dozen Defendants and recover damages against some of them and either discontinue or lose against the remaining Defendants who will then become entitled to their costs.

In particular, the question that then arises is to what extent is it open to a winning Defendant to recover its costs out of the Claimant’s pot of damages obtained from the losing Defendants? The answer may be that the winning Defendant can’t and simply has to stand its own costs.

The starting point is that the purpose of the QUOCS scheme is to hold a losing Claimant  “harmless” from the enforcement of a costs Order made in a winning Defendant’s favour, save for certain limited exceptions, of which the only material one in a case uncomplicated by fundamental dishonesty is likely to be that of set off against a Claimant’s damages.

The QUOCS scheme has its conception in the former Legal Aid Acts and the Access to Justice Act 1999. A detailed exposition of its origins lies in the Review of Civil Litigation Costs: Final Report (December 2009): see chapters 9 and 19. The availability of set off of a Defendant’s costs against a Claimant’s damages where the Claimant had a Legal Aid certificate was canvassed in cases such Lockley.v.National Blood Transfusion Service [1992] 1 WLR 492.

In that case Scott LJ observed:

In my judgment, the following propositions can be stated.

(1) A direction for the set-off of costs against damages or costs to which a legally aided person has become or becomes entitled in the action may be permissible.

(2) The set-off is no different from and no more extensive than the set-off available to or against parties who are not legally aided.

(3) The broad criterion for the application of set-off is that the plaintiff’s claim and the defendant’s claim are so closely connected that it would be inequitable to allow the plaintiff’s claim without taking into account the defendant’s claim. As it has sometimes been put, the defendant’s claim must, in equity, impeach the plaintiff’s claim. *497

(4) Set-off of costs or damages to which one party is entitled against costs or damages to which another party is entitled depends upon the application of the equitable criterion I have endeavoured to express. It was treated by May J. in Currie & Co. v. The Law Society [1977] Q.B. 990 , 1000, as a “question for the court’s discretion.” It is possible to regard all questions regarding costs as being subject to the statutory discretion conferred on the court by section 51 of the Supreme Court Act 1981 . But I would not have thought that a set-off of damages against damages could properly be described as a discretionary matter, nor that a set-off of costs against damages could be so described.

(5) If and to the extent that a set-off of costs awarded against a legally aided party against costs or damages to which the legally aided party is entitled, cannot be justified as a set off (i) the liability of the legally aided party to pay the costs awarded against him will be subject to section 17(1) of the Act of 1988 and regulation 124(1) of the Regulations of 1989; and (ii) the section 16(6) charge will apply to the costs or damages to which the legally aided party is entitled.

Applying these principles to the respective orders made by the district registrar and by Mars-Jones J., I conclude that neither can be criticised. In general, in my opinion, interlocutory costs incurred in the progress of an action to trial and ordered to be paid by a plaintiff to a defendant would in equity impeach the right of the plaintiff to recover from the defendant costs of the action ordered to be paid by the defendant. A set-off of costs against costs, when all are incurred in the prosecution or defence of the same action, seems so natural and equitable as not to need any special justification. I would expect a party objecting to the set-off to give some special reason for the objection. It is, in my opinion, less obvious that a set-off of costs against damages would always be justified.

It will be noted that the essence of a set off is that that there are cross claims between the Claimant and the same Defendant, which predicate a netting off of liability: the notion that a Claimant’s entitlement in damages from one Defendant should be credited to another Defendant’s entitlement to costs is wholly alien to the concept of set off, which is based on a mutuality of liabilities.

It follows that the argument that a winning Defendant should be able to attach a pot of damages obtained from another party altogether, involves a counter intuitive argument that the statutory scheme of set off permitted by the QUOCS provisions in part 44 CPR has created a wholly new legal principle, which is not properly described as set off at all.

Various terms are used in the rules whose meaning must be carefully considered in this context. Rule 2.3 defines a claimant as a person who makes a claim. It defines claim for personal injuries as meaning proceedings in which there is a claim for damages in respect of personal injuries to the claimant or any other person or in respect of a person’s death.

The rule further defines a statement of case to mean a claim form, particulars of claim where these are not included in a claim form, defence, Part 20 claim or reply to a defence. A “claim” is not the claim form, nor even the proceedings before the court, but rather the individual demand by a particular person for damages which is included in proceedings.

Each claim will generate its own costs liability: eg in  proceedings where there are six defendants there will be six claims, contained in a single claim form. There could equally have been six claim forms, each containing one claim against a specific Defendant. The liability for costs as between the Claimant and each Defendant would be determined as separate exercises of the discretion and separate costs Orders would be made in respect of each claim.

The word “proceedings” has an elasticity of meaning. A recent restatement of authority and the correct approach to determining what parts of an involved piece of litigation are separate proceedings for the purposes of costs is to be found in the case of Plevin v Paragon Personal Finance Limited [2017] UKSC 23.

In that case Lord Sumption observed at paragraphs 18 to 20:

18. It is clear that for some purposes the trial and successive appeals do constitute distinct proceedings. In particular they are distinct proceedings for the purpose of awarding and assessing costs: see Masson, Templier & Co v De Fries [1910] 1 KB 535, 538-539 (Vaughan Williams LJ); Wright v Bennett [1948] 1 KB 601; Goldstein v Conley [2002] 1 WLR 281, at paras 79 (Clarke LJ), 107 (Sir Anthony Evans). The authorities were helpfully reviewed by Rix LJ in Hawksford Trustees Jersey Ltd v Stella Global UK Ltd (No 2) [2012] 1 WLR 3581. In that case, the Court of Appeal held that for the purpose of section 29 of the Access to Justice Act 1999, the costs incurred in respect of an ATE premium were recoverable only in the proceedings to which the policy related, ie as part of the costs of the trial if the policy related only to the trial, and not as part of the costs of the appeal. In Gabriel v BPE Solicitors [2015] AC 1663, para 16, this court applied the same principle when holding that a trustee in bankruptcy, by prosecuting an appeal to the Supreme Court, did not expose himself to liability for the costs of the distinct proceedings conducted by the bankrupt at trial or on appeal to the Court of Appeal.

19. However, “proceedings” is not a defined term in the legislation, nor is it a term of art under the general law. Its meaning must depend on its statutory context and on the underlying purpose of the provision in which it appears, so far as that can be discerned. The context in which the word appears in section 46(3) of LASPO is different and so, in my judgment, is the result.

20. The starting point is that as a matter of ordinary language one would say that the proceedings were brought in support of a claim, and were not over until the courts had disposed of that claim one way or the other at whatever level of the judicial hierarchy. The word is synonymous with an action. In the cases cited above, relating to the awarding or assessment of costs, the ordinary meaning is displaced because a distinct order for costs must be made in respect of the trial and each subsequent appeal, and a separate assessment made of the costs specifically relating to each stage. They therefore fall to be treated for those purposes as separate proceedings. The present issue, however, turns on a different point. The question posed by section 46(3) of LASPO is whether the fact of having had an ATE policy relating to the trial before the commencement date is enough to entitle the insured to continue to use the 1999 costs regime for subsequent stages of the proceedings under top-up amendments made after that date. The fact that costs are separately awarded and assessed in relation to each stage does not assist in answering that question.(emphasis added)

It follows that for the purposes of costs, the making of a costs Order divides the stages of litigation into separate proceedings: it defines the scope of what are the relevant proceedings.

Where a costs Order is made in favour of a Defendant and the costs liabilities in the other claims in the proceedings were determined by other Orders it can be seen that the relevant proceedings for application of the QUOCS rules, are the claim against the  Defendant which led to the costs Order in its favour which for the purposes of costs is to be treated as separate proceedings.

Section II of part 44 CPR applies the scheme of QUOCS. Rule 44.1

(1) This Section applies to proceedings which include a claim for damages

(a) for personal injuries;

(b) under the Fatal Accidents Act 19767; or

(c) which arises out of death or personal injury and survives for the benefit of an estate by virtue of section 1(1) of the Law Reform (Miscellaneous Provisions) Act 19348,

but does not apply to applications pursuant to section 33 of the Senior Courts Act 19819or section 52 of the County Courts Act 198410 (applications for pre-action disclosure), or where rule 44.17 applies.

(2) In this Section, ‘claimant’ means a person bringing a claim to which this Section applies or an estate on behalf of which such a claim is brought, and includes a person making a counterclaim or an additional claim.

Rule 44.14 CPR provides as follows:

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 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 effect of this rule is to permit the Defendant to set off a costs Order (once the costs have been agreed or assessed) made in its favour as against any order for damages and interest made in favour of the Claimant. See rule 44.12 CPR for a like provision which permits set off in respect of costs.

Rule 44.15 provides:

Orders for costs made against the claimant may be enforced to the full extent of such orders without the permission of the court where the proceedings have been struck out on the grounds that –

(a) the claimant has disclosed no reasonable grounds for bringing the proceedings;

(b) the proceedings are an abuse of the court’s process; or

(c) the conduct of –

(i) the claimant; or

(ii) a person acting on the claimant’s behalf and with the claimant’s knowledge of such conduct, is likely to obstruct the just disposal of the proceedings.

Rule 44.16 provides:

 (1) Orders for costs made against the claimant may be enforced to the full extent of such orders with the permission of the court where the claim is found on the balance of probabilities to be fundamentally dishonest.

(2) Orders for costs made against the claimant may be enforced up to the full extent of such orders with the permission of the court, and to the extent that it considers just, where –

(a) the proceedings include a claim which is made for the financial benefit of a person other than the claimant or a dependant within the meaning of section 1(3) of the Fatal Accidents Act 1976 (other than a claim in respect of the gratuitous provision of care, earnings paid by an employer or medical expenses); or

(b) a claim is made for the benefit of the claimant other than a claim to which this Section applies.

(3) Where paragraph (2)(a) applies, the court may, subject to rule 46.2, make an order for costs against a person, other than the claimant, for whose financial benefit the whole or part of the claim was made.

The detail of the QUOCS rules was refined when the Civil Procedure Rules Committee drafted the provisions, consequent to further work undertaken by the Civil Justice Council. In its Response To Ministry of Justice Commissioning Note entitled “Implementation Of Part 2 Of The Legal Aid, Sentencing And Punishment Of Offenders Act 2012: Civil Litigation Funding And Costs – Issues For Further Consideration By The Civil Justice Council” June 2012 it had this to say about QUOCS and discontinuance in paragraphs 90 to 94:

90. Again, we start with the position as stated in the MoJ’s Commissioning Note, which is that QOCS protection will be allowed in claims that are discontinued during proceedings and for appeal proceedings. This is straightforward and was generally agreed by the group when it first considered the points.

91. The policy as set out by the MoJ would amount to a substantial change to the provisions of Part 38.6(1) in respect of personal injury claims. At present, this rule provides that:

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.

92. Following initial discussions a difference of views emerged which, in essence, amounted to those representing defendants and insurers arguing that they would face significant risks if QOCS protection were to be allowed as a matter of course in the manner set out in the CN.

93. Those arguments are probably beyond the narrow remit which we were given in the CN and, in any event, were not favoured by a majority. It is nevertheless worth examining the main points which were put forward in support.

94. First, that allowing QOCS protection in claims which are discontinued after proceedings would disadvantage defendants since they would have been put to irrecoverable cost as a result of the now-discontinued claim. That is indeed the case, but the outcome is consistent with the general policy aim of QOCS protecting claimants who are not, in broad terms, successful

The argument that a Claimant might put forward in a scenario where he has won and lost against various Defendants to try to preserve his damages from the losing Defendants is simple.

So far as costs issues are concerned, the claim against a winning Defendant is a separate and distinct set of proceedings. A  costs Order may have been  made in the  Defendant’s favour but the Claimant to the proceedings against the winning Defendant has the benefit of QUOCS, and because within those proceedings no Orders for damages and interest were made in favour of the Claimant against the winning Defendant, there is nothing which can be set off against the Claimant’s costs liability.

The structure of section II of part 44 CPR is sequential. The starting point is to determine what are the proceedings to which rule 44.13 applies. In this context, at the time the deemed costs Order was made in favour of theDefendant, the relevant proceedings for the purposes of costs were the proceedings against the  Defendant per the approach in Plevin.

Rule 44.14 then follows sequentially on from 44.13 CPR. It can be argued that the scope of the enforcement permitted by the rule must be limited to an order for damages or interest made in the same proceedings within which the deemed costs Order is made.

Such a construction is to be preferred to any alternative suggestion put forward by the  Defendant because of the following factors:

(i) The sequential placing of the rule just after 44.13, which defines the scope of QUOCS protection according to the particular proceedings in which there is a claim for personal injuries.

(ii)The express wording of rule 44.14(2) which provides that enforcement can only take place after “the proceedings” have concluded and the costs have been quantified

(iii)The wording of the further exceptions in rule 44.15 where enforcement is only permissible where “the proceedings” have been struck out

(iv) The wording of the further exceptions in rule 44.16 where enforcement is only permissible where “the claim” is tainted by fundamental dishonesty, or there is a mix of claims.

Moreover such a construction accords with the statutory purpose behind QUOCS that (i) absent clear, well defined and limited exceptions a winning Defendant will stand their own costs and (ii) a losing Claimant is able to litigate, being held harmless from costs Orders obtained by a winning Defendant.

Conversely it would be inconsistent to interpret rule 44.14 to allow enforcement where in any proceedings the Claimant recovers a fund of damages and interest from another Defendant that the Claimant is liable to make a payment to a Defendant in separate proceedings.

Such a construction would also avoid a number of absurd and inconsistent results, where for example a Claimant reaches a settlement with some Defendants pre the issue of proceedings, so no Order for damages or interest is ever made, or where the three Defendants are sued in a separate action to three other Defendants possibly some years apart.

It is hard to see why such a hypothetical Claimant should be better off than a Claimant who has chosen to join all the Defendants in one action and hence is a powerful pointer to the construction submitted above.

QUOCS remains one of the more opaque areas of the Civil Procedure Rules and even now, some 4 years on since the implementation of the scheme there are many aspects of the rules which require clarification.

“And so, for these reasons the claim is dismissed.” is not a phrase that either a claimant or a solicitor acting for a claimant under the terms of a CFA will relish hearing at the end of a trial. In such circumstances, the next immediate questions are how any adverse costs Orders and own-client disbursements can be paid. Personal injury claimants will have the benefit of QUOCS, but even so may face a hefty bill for their own disbursements.

It is at this moment that any policy of BTE or ATE insurance effected by the claimant, the latter usually through the agency of his solicitors will come to the fore. But what if the BTE or ATE insurer refuses to pay out, relying on alleged breaches of policy conditions or warranties, or, even more dramatically, fraud by the losing claimant?

What remedies does a client have then? In context it may not just be the client who seeks a remedy. It is the case that many solicitors provide credit to their clients in the first instance by funding their clients’ disbursements, often by way of overdraft. An ATE insurance policy acts as effective re-insurance for the solicitors outlay, obtained at the behest of the solicitors’ bankers.

What follows is an analysis of the key issues that arise at this juncture and what route of challenge might be pursued against a defaulting insurer.

The starting point is that the insured will wish to raise a claim for an indemnity or an action for damages amounting to an indemnity against the insurer, which will be met with a reason or litany of reasons why the insurer is not obliged to pay out on the claim on the policy.

In summary the usual reasons for refusal of indemnity, include misrepresentation at the time of the inception of the policy, non compliance with terms and conditions, subsequent developments in the litigation which the insurer was not informed of, any finding of fraud against the insured made by a trial judge and possibly that the liability incurred is outside the scope of the policy.

Before consideration can be given to whether there is scope to challenge a refusal of indemnity, the first issue that falls to be addressed is whether the solicitor can represent the client in a fresh dispute with the ATE insurer. In many cases there will be a conflict of interests.

A client will usually have obtained their ATE insurance, through the agency of their solicitor, carrying out insurance mediation activities. The policy may be one which gives the solicitor, delegated authority to run the litigation without recourse to the ATE insurer, but often it will not and there will be terms requiring the insurer to give consent to the issue of proceedings, or be notified of material developments in the litigation, or the making of any part 36 offer.

The performance of these obligations will be entrusted to the solicitor: if the insurer’s allegation is that these obligations have been honoured in the breach and not the observance, so that it is contended to be the solicitor’s fault that the insurer has repudiated liability, a clear conflict of interest will arise. The client may well wish to sue the insurer on the contract of insurance, and the solicitor for professional negligence in the alternative.

Another issue that can arise concerns who can bring an action. If the principal sum at stake represents the disbursements which have been paid by the solicitor, and the client has little interest in pursuing the BTE or ATE insurer, perhaps because his liability for adverse costs is covered by QUOCS, the party with the greatest interest in pursuing an action may be the solicitor who is substantially out of pocket by his payment of disbursements.

In this scenario, the solicitor may be able to sue the insurer directly by taking an assignment of the client’s rights under the policy: subject to there being no clause against assignment or arguments of public policy arising from the case of Trendtex Trading Corp v Credit Suisse[1982] AC 679. Sometimes the facts can give rise to arguments that the solicitor may claim for a direct right to an indemnity as happened in Greene Wood McLean LLP (In administration) v Templeton Insurance Limited [2010] EWHC 2679 (Comm) though it should be noted that this arose, when solicitors had discharged clients adverse costs liabilities and could rely both on the principle in Brook’s Wharf & Bull Wharf Ltd v Goodman Bros [1937] 1 K.B. 534 and the Civil Liability (Contribution) Act 1978.

Assertions by insurers that they are entitled to void the policy and their reasons for doing so must be carefully scrutinised. When misrepresentation is alleged, the starting point is that it is trite law that a contract of insurance is a contract of utmost good faith and there is a duty on the insured to provide full disclosure of the facts which are material to the insurer’s risk.

Many ATE contracts will be with insured’s who aptly to be described as consumers, and duty of disclosure is found in sections 2 and 3 of the Consumer Insurance (Disclosure and Representations) Act 2012. If the insured is a business then section 3 of the Insurance Act 2015 imposes a similar obligation upon a business, described as a duty of fair presentation.

If a reason for voiding the policy is given as misrepresentation, it follows that the relevant duty must be identified, and the facts said to constitute a misrepresentation considered, to see whether the insurer can rely on the statutory provisions. A distinction will exist between innocent and fraudulent misrepresentation. In an innocent misrepresentation, the insurer must establish it was material to their decision to insure. No such requirement of materiality applies to a fraudulent misrepresentation. A further requirement is that either type of misrepresentation induced the insurer to make the contract. The key to this task will be to read carefully the written insurance proposal and any accompanying documents sent to the insurer, upon which document they will have based their decision to write a policy and see whether it is full and complete.

Insurance contracts have a different terminology to other contracts and will contain terms that are either warranties or conditions, whereby warranties are the more important of the terms and conditions often, of a lesser significance. Many insurance policies will label the most important terms as warranties. Of the two categories, warranties are the more significant, because of the consequences of breach. A breach of a warranty will render the contract, voidable if it is breached with no liability to pay on the policy at all when voided. There is an obligation is on the insured to comply exactly with the provisions of the warranty.

Conversely, a breach of condition is different in its effect. If a breach of a condition does not result in the loss being sustained, which the policy insures against, then it will not be a breach giving rise to a right of avoidance. Moreover, a breach of condition will constitute a limiting event on an insurer’s liability, but not entitle them to avoid the policy entirely.

Even if an insured is in breach, this is not necessarily the end of the matter: if the insurer can be said to have waived or affirmed the breach, by having knowledge of it, but still continuing with cover and possibly accepting further tranches of premium the insurer will be estopped from being able to rely on the breach. However the courts tend to emphasise both the requirements of actual knowledge of breach on the part of the insurer and clear communication of waiver consequent to that knowledge.

Perhaps the clearest example of a situation where an insurer might wish to avoid the insurance policy, is where the insured has lost at trial due to findings of fraud or dishonesty being made against them. An interesting question arises as to whether these findings between the client and the third party, can be relied upon in themselves, as between the client and the insurer.

In other contexts, where there is a dispute between the third party and the insured and their insurer raises indemnity issues, it is common for the insurer to be joined to the action through a part 20 claim and findings will be made on both the main claim and part 20 claim in one trial.

In the context of a dispute with a BTE or ATE insurer that option will not be realistic as in virtually every case, the dispute only arises after an adverse judgment.

In what is perhaps the leading case on this point, Persimmon Homes Ltd v Great Lakes Reinsurance (UK) Plc [2010] EWHC 1705 Comm Mr Justice Steel had no difficulty in allowing the trial judge’s findings in the original action as evidence, despite the seeming inconsistency with decisions such as Secretary of State for Trade and Industry v Bairstow [2004] Ch 1 which re-emphasised the rule in Hollington v Hewthorn [1943] KB 857 that findings in one civil case are inadmissible in a later civil case.

The cases can perhaps be reconciled on the basis that the insurer and insured are privies and the doctrine of estoppel per rem judicatem precludes the re-opening of the point. In any event, the point may have little practical force if the evidence at the first trial is available, and supportive of a finding of fraud.

Not all circumstances where a client comes under an adverse costs liability will be insured events; it is common for policies to exclude cover for costs awarded when a claim has been struck out, or there has been other default which caused the incurrence of adverse costs. Some policies are barely worthy of the name, because they also exclude a liability to pay adverse costs, where for example a part 36 offer has not been beaten, until any damages or costs the insured may have been ordered to pay have been exhausted in discharging the adverse costs order.

Most policies of ATE insurance will have an arbitration clause: this can be quite a valuable route of redress as an alternative to litigation, not least since the decision in Essar Oilfields Services Limited v Norscot Rig Management PVT Limited [2016] EWHC 2361 (Comm) indicates, that in principle, the cost of litigation funding (and possibly other additional liabilities) might be recoverable. And the strait jacket of costs budgeting and costs management imposed by the courts under part 3 CPR, simply won’t arise.  A further alternative is a complaint to the Financial Ombudsman: http://www.financial-ombudsman.org.uk. As ever, with these forms of alternative redress the eas of making a complaint to the Ombudsman must be weighed against the nature of the dispute and the adequacy of the remedy the Ombudsman might provide.

A version of this article first appeared in the June edition of Litigation Funding magazine and can be found here: Filling the Void.

Right, as the world goes, is only in question between equals in power, while the strong do what they can and the weak suffer what they must.

-Thucydides

Long term readers of this blog, will know that I maintain a rigid policy of political neutrality, reserving the right to be even handedly offensive about the idiocies of both Conservative and Labour party policy on matters pertaining to access to justice and costs and litigation funding.

In recent years there has been much to be offensive about with the collapse of the absurdly expensive Access to Justice Act 1999 scheme with its recoverable success fees and ATE premiums, and the cheese paring myopic approach of the Legal Aid Sentencing and Punishment of Offenders Act 2012 which has deprived large swathes of the population from access to legal advice and an effective remedy for their wrongs.

One particular bugbear remains that after 1st April 2013 meritorious claims under the Equality Act 2010 for disability discrimination, as well as other claims in areas as diverse as sex discrimination, race discrimination and environmental nuisance have become increasingly difficult to pursue.

Reviewing my archives, I see that in October 2013, I wrote to Maria Miller, the then Minister for Women and Equalities in the Coalition Government in the following terms:

Dear Mrs Miller

Re: Access to Justice for disabled people

I am writing to you, to request that the Government Equalities Office engage with the Ministry of Justice, to ensure access to justice for disabled people.

Specifically, I would ask that you take up with the MOJ, the introduction of a scheme of Qualified One Way Costs Shifting by way of amendment to the Civil Procedure Rules, for disabled people, who wish to bring claims in the county court against organisations that have discriminated against them, in the provision of goods or services, education or the exercise of a public function.

Prior to the 1st April 2013, a disabled person could, under the scheme of the Access to Justice Act 1999, instruct a solicitor to represent them in a discrimination claim, under a conditional fee agreement and obtain protection from having to pay the costs of their opponent, through taking out a policy of After the Event (ATE) insurance.

Due to the Jackson reforms, introduced in the Legal Aid Sentencing and Punishment of Offenders Act 2012, it is no longer possible to recover the cost of this policy, from the losing side to litigation.

This means these policies are no longer available, as practically it is impossible for a disabled person to pay for them.

It means that a disabled person may well  be denied access to justice, as they dare not take proceedings, if there is a chance, however small, that they might not win and have to pay the other sides costs.

These might be substantial and cause the disabled person to lose their home.

A scheme of Qualified One Way Costs shifting has been brought in for personal injury claims and to protect victims of medical negligence.

A further scheme is contemplated for defamation claims.

Disability discrimination claimants are at least as deserving, as victims of defamation, engage in similarly asymmetric litigation and at the moment, unless reforms are undertaken, are at real risk of being denied justice, and the scheme of individual enforcement of rights, contemplated by the Equality Act 2010, will be rendered nugatory.

I await your reply. I am willing to travel to London, to explain matters directly to officials or ministers, as required.

Yours sincerely

Andrew Hogan

I did not receive any reply.

So I sent that letter again.

Still, no reply.

It may be that the Minister had other things on her mind at the time, including the Parliamentary expenses scandal, wherein she had to make a repayment of public monies claimed by way of expenses, and then make a 32 second apology to the House of Commons later, in 2014.

Still in 2017 there is no sign that the shortcomings in the current costs regime, which is an access to justice concern, pertaining to disabled people are likely to be addressed any time soon.

Many people will wonder whether there is any point voting in the forthcoming General Election, given the current likelihood that the Conservatives will simply be re-elected to form a government with a substantial majority and in my case, I note that in the rural part of Nottinghamshire where I live, they tend to weigh, rather than count, the votes of the successful Tory candidate.

The short answer to that query is that before and after 1832 many people have gone to prison, and even died to ensure that we generally have a vote. That we can play some part in steering the course of our political fate.

That we do not have to “suffer what we must”.

For my part I shall study the election manifestoes of all the main parties to see what they have to say about the creaking justice system and what they are going to do about it. I shall cast my vote, when I have seen the evidence.

And after the 8th June, I shall redraft that letter and send it again, to whomsoever is government  and then send it again, and again, until, finally, broken under the strain of persistent correspondence, I do get a response.

On 28th June 2017 I shall be chairing A Question Time on Costs at the Bridgewater Hall in Manchester.

Booking details can be found here: http://ropewalk.co.uk/knowledge-sharing/events2

The event is free to attend and there will be generous hospitality.

I hope to see some of you there.

One of the emerging jurisdictions for lawyers from England and Wales which seems to generate an increasing amount of work is the Middle East and in particular the Dubai International Financial Centre.

As noted on its own website the DIFC was set up in accordance with the following vision:

The Dubai International Financial Centre (“DIFC”) was launched in accordance with United Arab Emirates (UAE) Federal Decree No. 35 of 2004 as a part of Dubai’s strategic vision to diversify its economic resources and attract capital and investments in the region. It is a Financial Free Zone defined in Federal Law No. 8 of 2004. An independent jurisdiction within the UAE, DIFC is empowered to create its own legal and regulatory framework for all civil and commercial matters. 

The following three independent bodies have been established at the DIFC to enable and support the growth and development of businesses in the Centre: the DIFC Authority, the Dubai Financial Services Authority (“DFSA”) and the Dispute Resolution Authority (“DRA”).

It is the Dispute Resolution Authority and in particular the courts applying the common law which sit in Dubai, which are of particular interest.

For an overview of the applicable procedures which apply, I can do no better than recommend the excellent guide produced by Rupert Reed QC and the team at Wilberforce Chambers, a copy of which can be found here: Rules-of-the-DIFC-Courts-2016, gratefully placed on this website with the permission of its author.

Now on its fourth edition, the guide may some day attract the authority of the White Book, when considering matters pertinent to disputes in the DIFC.

The pleasure with dipping into jurisdictions which are surprisingly similar but also very different, is to see how lawyers and judges overseas, have devised their own solutions to familiar problems.

Thus the guide has this comment to make on the possible introduction of costs budgeting:

DIFC practitioners will be relieved that they have as yet been spared the process by which English lawyers, under the Jackson processes of ‘costs management’, are now required to quantify their clients’ costs in advance and held to that ‘budget’, at least in terms of their clients’ ultimate recovery in costs.

There has, however, been a certain amount of discussion not least during the course of lectures in the DIFC Academy of Law lecture series of costs budgeting as a solution to the concern of general counsel that litigation costs require firmer control. In circumstances where most proceedings in the English Commercial Court are now subject to costs budgeting, it seems likely that the DIFC Court will give serious consideration to this and other prospective means of limiting costs.

Earlier this year the courts also consulted on the introduction of a new Practice Direction to provide some regulation of the practice of litigation funding. A copy of the Practice Direction can be found here: 16-Jan-2017-Practice-Direction-for-Third-Party-Funding-in-the-DIFC_NB.

The key provisions of the draft Practice Direction were as follows:

4. A Funded Party who enters into an LFA in respect of Proceedings must put every other party to the relevant dispute on notice, in accordance with subsection (5) and (6), of the fact that he has entered into an LFA in respect of the relevant dispute or Proceedings. For the avoidance of doubt, thus subsection (4) does not require disclosure of a copy of the LFA.

5. For Part 7 claims, notice under subsection (4) must be given:

A. In the Case Management Information Sheet to be submitted prior to the Case Management Conference (CMC), pursuant to RDC 26.3; or

B. When the Funded Party enters into an LFA after the CMC, within 7 days of the date of the LFA. Such notice shall be in writing and shall be served on every other party to the relevant Proceedings as well as the DIFC Courts Registry.

The draft Practice Direction thus proposed notification of the existence of litigation funding, in a way reminiscent of the provisions of the CPR which applied to notification of additional liabilities: but does not attempt to codify any principles or consequences applicable to a party having the benefit of litigation funding. As the draft Practice Direction noted:

This Practice Direction is without prejudice to any subsequent decisions of the DIFC Courts ruling on the legality of LFAs in general or any specific LFA in particular (or any part thereof).

It will be interesting to see over the next few years precisely how the law of litigation funding unfolds in the DIFC courts and to see to what extent it parallels that in the jurisdiction of England and Wales.

A copy of the paper I delivered at the Ropewalk Chambers Personal Injury Conference earlier this month can now be downloaded here: Costs 2017.

The Ropewalk Chambers Personal Injury Conference on the 3rd March at which I am delivering a paper is now fully booked.

The paper will be available on here, later on Friday.