Appeal judges refuse protective costs order for personal injury litigant

The “policy and practice” of the courts is that protective costs orders (PCOs) should not be made in private litigation, appeal judges have ruled.

The Court of Appeal also stressed the importance of applying for a PCO “as soon as possible”.

Charlotte Swift was awarded a lump sum of almost £4.1m after an accident led to the amputation of her lower left leg. She appealed against the decision of Mrs Justice Lambert in August 2018 to make no award for the additional capital cost needed to pay for special accommodation.

Ms Swift applied for a PCO in November 2019 so that, if she lost her appeal, she would not be responsible for any of the other side’s costs incurred after the end of July 2019.

Though she was protected by qualified one-way costs shifting (QOCS), she did not consider that this was sufficient. She argued that, without a PCO, an adverse order for costs on the appeal would exceed the additional amount of £900,000 which she required for a suitably adapted house and it would also diminish her damages award to a significant extent, leaving some of her needs unmet.

But, in a joint ruling, Master of the Rolls Sir Terence Etherton, Lord Justice Irwin and Lady Justice Nicola Davies dismissed the application for a PCO.

They disagreed with counsel for the defendant that the court “does not have jurisdiction to make a PCO” in a case like this, citing the wide power conferred by section 51 of the Senior Courts Act and CPR part 44.

However, they said the “essential purpose of a PCO”, as stated in the landmark Corner House ruling, was to protect applicants from being exposed to such serious financial risks that they would be deterred from advancing a case of general public importance “at all”.

The Corner House conditions also require that the applicant has no private interest in the outcome of the case.

The Court of Appeal’s subsequent ruling in Eweida was “binding authority that the policy and practice of the courts is that a PCO should not be made in private litigation” and, as a result, Ms Swift’s application had to be dismissed.

“The present proceedings are standard private litigation for damages for personal injury caused by the defendant’s negligence.

“Inevitably, in the context of such litigation, and contrary to the second Corner House condition, the appellant has an overwhelming private interest in the outcome of the appeal, notwithstanding that the outcome may be of wider interest to future litigants in a similar position, insurers and the legal profession. Such wider interest is true of many, if not most, of the appeals in the Court of Appeal in private litigation.”

Ruling in Swift v Carpenter [2020] EWCA Civ 165, appeal judges said that even if, contrary to Eweida, they could have taken “a more flexible approach” to the Corner House conditions, they would not have granted the application because the proceedings were adjourned last year on Ms Swift’s application – due to her not having sufficient expert evidence at the time – and there was a “significant delay” in applying for the PCO.

The possibility of an application was mentioned in July 2019 but it was not made until late November 2019, during which time the defendant incurred “very substantial costs”, from which Ms Swift sought to protect herself.

“If a party wishes to have the protection of a PCO, the application must be made as soon as possible as its existence will be highly likely to have a material effect on decisions by the other party as to the incurring of costs and the making of offers of settlement.”

The appeal judges said that, although it was not relied on by Ms Swift, CPR 52.19 had been introduced since Eweida to address the situation in that case when someone appealed from a ‘no costs’ jurisdiction “so as to preserve, in an appropriate case, the same costs policy on appeal”.

However, the Civil Procedure Rule Committee had not decided to “go further and remove entirely the condition that a PCO is not available in private litigation or where the applicant has a material private interest in the outcome of the litigation”.

Derek Sweeting QC and James Arney (instructed by Leigh Day) for the appellant, William Audland QC and Richard Viney (instructed by Weightmans) for the respondent, and Darryl Allen QC (instructed by Simpson Millar) for the intervener, the Personal Injuries Bar Association.

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Costs News
Published date
11 Mar 2020

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