Consider. A personal injury claim has been struck out for failure to comply with an “unless” Order. The application for relief from a sanction has been dismissed in trenchant terms by a District Judge. The Circuit Judge has refused permission to appeal.
So what? If QUOCS applies the claimant who would otherwise have to pay the costs of the defendant, can simply proceed to issue a fresh claim provided he is within the limitation period. Can’t he?
Or consider this: the claimant in a personal injury claim lodges his costs budget the day before a case management conference: the District Judge applies the sanction prescribed by the rules, and the claimant’s costs are henceforth limited to court fees. The following day, the claimant discontinues. QUOCS applies and the deemed costs order is valueless. The following week the claimant issues a fresh set of proceedings, again provided he is within the limitation period. Can’t he?
Does this represent the law, and if it does, should it?
The above scenarios invoke consideration of a number of competing factors. They involve reconciling the doctrine of abuse of process, the claimant’s right under article 6 of the ECHR to a fair determination of his civil rights and obligations, and the broad scope of the Qualified One Way Costs Shifting scheme (QUOCS) to produce a just result.
I consider each of these factors below.
Dealing with abuse of process, a useful starting point to note is that the Civil Procedure Rules 1998 do not automatically consider a second claim to be an abuse of process. Rule 3.4 provides as follows:-
(4) Where –
(a) the court has struck out a claimant’s statement of case;
(b) the claimant has been ordered to pay costs to the defendant; and
(c) before the claimant pays those costs, the claimant starts another claim against the same defendant, arising out of facts which are the same or substantially the same as those relating to the claim in which the statement of case was struck out,
the court may, on the application of the defendant, stay that other claim until the costs of the first claim have been paid.
This rule provides certain difficulties however. The first point is conceptual: that its application to a personal injury claimant would appear to run counter to the very carefully prescribed regime of QUOCS, where as a matter of policy personal injury claimants absent certain very narrowly defined exceptions are to be held harmless from costs consequences. Is this rule subordinate to QUOCS or is QUOCS subordinate to rule 3.4(4)?
The second point is practical: if the case is struck out then the defendant can apply for a stay, until his costs are paid. But if the claimant is impecunious, a stay would function as a permanent bar to obtaining a judgment on the merits by the court. Moreover given the use of the word “may”, it is apparent that the court has a discretion not to stay the proceedings, and given that QUOCS precludes the enforcement of an Order for costs, even if as a matter of construction the rule can be applied to personal injury claims, it must surely be a factor to take into account that the quantum of costs the claimant “owes” the defendant is “nil”.
The third point is to note that because the rule expressly contemplates a second action proceeding provided the costs consequences of the first have been discharged, it might be argued that a second action consequent to a strikeout without more, cannot be an abuse of process.
But the rules are not the end of the matter. The case law has to be considered and it is fruitful to consider a case from the very beginning of the modern era, that of Securum Finance.v.Ashton (Court of Appeal Transcript 21st June 2000).
That case concerned multiple litigation and it is interesting to note what Jacob LJ had to say in general terms:
30. The power to strike out a statement of case is contained in CPR Rule 3.4. In particular, Rule 3.4(2)(b) empowers the court to strike out a statement of case (which includes part of a statement of case – see Rule 3.4(1)) if it appears to the court that the statement of case is an abuse of the court’s process; but that does not limit any other power of the court to strike out – see Rule 3.4(5). In exercising that power the court must seek to give effect to the overriding objective set out in CPR Rule 1.1 – see Rule 1.2(a). The overriding objective of the procedural code embodied in the new rules is to enable the court “to deal with cases justly” – see Rule 1.1(1). Dealing with a case justly includes
“allotting to it an appropriate share of the court’s resources, while taking into account the need to allot resources to other cases”.
31. In the Arbuthnot Latham case this court pointed out, in a passage at page 1436E which I have already set out, that: “In Birkett v James  AC 297 the consequence to other litigants and to the courts of inordinate delay was not a consideration which was in issue. From now on it is going to be a consideration of increasing significance.” The effect on other litigants of delay in the proceedings in which that delay has occurred is, now, a factor to which the court must have regard when considering whether to strike out those proceedings. But, equally, the fact that earlier proceedings have been struck out on the grounds of delay is a factor to which the court must have regard when considering whether to strike out fresh proceedings brought to enforce the same claim. The reason, as it seems to me, is that, when considering whether to allow the fresh proceedings to continue, the court must address the question whether that is an appropriate use of the court’s resources having regard (i) to the fact that the claimant has already had a share of those resources in the first action and (ii) that his claim to a further share must be balanced against the demands of other litigants.
The judge concluded at paragraph 34:
34. For my part, I think that the time has come for this Court to hold that the “change of culture” which has taken has led to a position in which it is no longer open to a litigant whose action has been struck out on the grounds of inordinate and inexcusable delay to rely on the principle that a second action commenced within the limitation period will not be struck out save in exceptional cases. The position, now, is that the court must address the application to strike out the second action with s wish to have “second bite at the cherry” outweighs the need to allot its own limited resources to other cases. The courts should now follow the guidance given by this Court in the Arbuthnot Latham case – in a passage at page 1436H-1437B:
“The question whether a fresh action can be commenced will then be a matter for the discretion of the court when considering any application to strike out that action, and any excuse given for the misconduct of the previous action: see Janov v Morris  1 WLR 1389. The position is the same as it is under the first limb of Birkett v James. In exercising its discretion as to whether to strike out the second action, that court should start with the assumption that if a party has had one action struck out for abuse of process some special reason has to be identified to justify a second action being allowed to proceed.”
Astute observers, will have noted however that this case was decided 4 months, before the passage into force of the Human Rights Act 1998 in October 2000. This guidance, now needs to be read in the light of the observations of the Supreme Court in Fairclough Homes.v.Summers  UKSC 26. In this latter case, a specific issue that fell to be considered was how the court’s power to strike out, could be reconciled with the article 6 obligations that the court as a public authority is subject to.
Lord Clarke set the issue out in these terms:
46. The right to a fair and public hearing in the determination of civil rights is enshrined in Article 6 of the European Convention on Human Rights (“ECHR”). The right includes a right of access to a court: Golder v United Kingdom (1975) 1 EHRR 524. The court must act compatibly with Article 6: Human Rights Act 1998 section 6(1). The court is of course itself a public authority: section 6(3). The right of access is not absolute: Golder at para 38. In Ashingdane v United Kingdom (1985) 7 EHRR 528 the European Court of Human Rights accepted at para 57 that the right might be subject to limitations. Contracting States enjoy a margin of appreciation. However, the essence of the right of access must not be impaired, any limitation must pursue a legitimate aim and the means employed to achieve the aim must be proportionate.
47. In the instant case the claimant obtained judgment on liability for damages to be assessed. We accept that that judgment is a possession within the meaning of Article 1 Protocol 1 of the ECHR and that the effect of striking out his claim for damages would be to deprive him of that possession, which would only be permissible if “in the public interest and subject to the conditions provided for by law …” The State has a wide margin of appreciation in deciding what is in the public interest, but is subject to the principle of proportionality: Pressos Compania Naviera SA v Belgium (1995) 21 EHRR 301 at paras 31-39.
48. It is in the public interest that there should be a power to strike out a statement of case for abuse of process, both under the inherent jurisdiction of the court and under the CPR, but the Court accepts the submission that in deciding whether or not to exercise the power the court must examine the circumstances of the case scrupulously in order to ensure that to strike out the claim is a proportionate means of achieving the aim of controlling the process of the court and deciding cases justly.
He then went onto consider how the power to strike out could be exercised proportionately:
49. As noted at para 42 above, the court has a wide discretion as to how to exercise its case management powers. These include the power to strike out the whole or any part of a statement of case at whatever stage it is made, even if it is made at the end of the trial. However the cases stress the flexibility of the CPR: see eg Biguzzi per Lord Woolf MR at p 1933B, Asiansky Television v Bayer-Rosin  EWCA Civ 1792;  CPLR 111 per Clarke LJ at para 49 and Aktas v Adepta  EWCA Civ 1170,  QB 894, where Rix LJ said at para 92:
“Moreover, it should not be forgotten that one of the great virtues of the CPR is that, by providing more flexible remedies for breaches of rules as well as a stricter regulatory environment, the courts are given the powers and the opportunities to make the sanction fit the breach. That is the teaching of one of the most important early decisions on the CPR to be found in Biguzzi v Rank Leisure plc.”
The draconian step of striking a claim out is always a last resort, a fortiori where to do so would deprive the claimant of a substantive right to which the court had held that he was entitled after a fair trial. It is very difficult indeed to think of circumstances in which such a conclusion would be proportionate. Such circumstances might, however, include a case where there had been a massive attempt to deceive the court but the award of damages would be very small.
50. It was submitted on behalf of the defendant that it is necessary to use the power to strike out the claim in circumstances of this kind in order to deter fraudulent claims of the type made by the claimant in the instant case because they are all too prevalent. We accept that all reasonable steps should be taken to deter them. However, there is a balance to be struck. To date the balance has been struck by assessing both liability and quantum and, provided that those assessments can be carried out fairly, to give judgment in the ordinary way. The reasons for that approach are explained by the Court of Appeal in both Masood v Zahoor and Ul-Haq v Shah.
51. We accept that such an approach will be correct in the vast majority of cases. Moreover, we do not accept the submission that, unless such claims are struck out, dishonest claimants will not be deterred. There are many ways in which deterrence can be achieved. They include ensuring that the dishonesty does not increase the award of damages, making orders for costs, reducing interest, proceedings for contempt and criminal proceedings.
The full significance of the QUOCS scheme has not yet become manifest, nor how (or if) a court should approach the question of sanctions and whether it is appropriate to make different Orders, depending on whether a claimant enjoys QUOCS or not. Under the terms of the Legal Aid Act 1988, the court was precluded from exercising its powers in any way which took into account the fact someone was in receipt of Legal Aid: but no such statutory prohibition applies in relation to the current scheme. It is probable that this is an oversight, but it could be powerfully argued that its absence represents a change in policy.
It is perhaps surprising that the “after Mitchell” scenario has not yet been argued or reported but the answer to how the competing policy considerations of abuse of process and article 6 are reconciled will surely be addressed in due course.