Owen Tabbitt v Thomas Clark
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Peter Jackson,Lady Justice Nicola Davies |
| Judgment Date | 28 June 2023 |
| Neutral Citation | [2023] EWCA Civ 744 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: CA-2022-002402 |
[2023] EWCA Civ 744
Lord Justice Lewison
Lord Justice Peter Jackson
and
Lady Justice Nicola Davies
Case No: CA-2022-002402
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
KINGS BENCH DIVISION
PETERBOROUGH DISTRICT REGISTRY
HER HONOUR JUDGE WALDEN-SMITH (sitting as a Judge of the High Court)
Ref: E85YM642
Royal Courts of Justice
Strand, London, WC2A 2LL
Andrew Hogan (instructed by Hunt and Coombs LLP) for the Appellant
Robert Marven KC (instructed by Keoghs LLP) for the Respondent
Hearing date: 28/06/2023
Approved Judgment
This judgment was handed down at 14.30 on 28/06/2023 in Court and by release to the National Archives.
On 12 January 2016 Mr Tabbitt was involved in a road traffic accident when a car driven by Mr Clark collided with a stationary trailer that Mr Tabbitt was towing. Mr Tabbitt sustained serious personal injury. On 18 December 2018 he issued a claim form seeking damages. On 20 January 2022 Mr Clark (or rather his insurers) made a Part 36 Offer but it was not accepted until 3 November 2022. In consequence, Mr Tabbitt was entitled to his costs up to and including 10 February 2022, and Mr Clark was entitled to his costs thereafter. It is common ground that the claim is one to which qualified one-way costs shifting (“QOCS”) applies. QOCS is dealt with by CPR Part 44.13 to 44.16.
The quantum of the award had been agreed by the late acceptance of the Part 36 Offer. The incidence of costs had been agreed against the background of the costs provisions of Part 36.
But, in addition, Mr Tabbitt sought a declaration to be included in the order giving effect to the acceptance of the Part 36 Offer on the basis of the rules as they stood at the time. The form of declaration sought was:
“Pursuant to rule 44.14 CPR the Defendant is not permitted to enforce (including by way of setoff) the costs Order in paragraph 3 of this Order in his favour against the Claimant.”
On 1 December 2022 HHJ Waldon-Smith, sitting as a judge of the High Court, heard the application. Her role was limited to deciding whether to make that declaration.
CPR Part 44.14 (2) provides:
“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.”
It was common ground that as the rules stood at the date of the judge's judgment (a) acceptance of a Part 36 Offer did not result in an award of damages and (b) any costs order in favour of the defendant could not be enforced either against the amount of the Part 36 Offer or against the order for costs made in Mr Clark's favour.
Since the costs had not been assessed or agreed, there was at the date of the judge's judgment no immediate prospect of enforcement of any costs order against Mr Tabbitt.
But at the time of the judge's judgment changes to the QOCS rules were under active consideration by the Civil Procedure Rules Committee (“the CPRC”). On 7 October 2022 the CPRC approved an amendment to the rules which, as drafted, would permit enforcement by a defendant of a costs order against agreements to pay damages and other costs order. The text of the draft was quoted in Harrison v University Hospitals of Derby & Burton NHS Foundation Trust [2022] EWCA Civ 1660, [2023] 4 WLR 8 at [51].
Mr Tabbitt wished to guard against the possibility of a future rule change with potential retrospective effect. Mr Clark (or rather his insurers) were willing to take their chances. Since the claim had been disposed of by agreement, it would have been open to the parties to have achieved Mr Tabbitt's objective by agreement, perhaps by Mr Tabbitt making it a condition of acceptance of the Part 36 offer that no costs order would be enforced against him; or by offering to accept a lower sum in exchange for that agreement. But that was not done.
In the Harrison case HHJ Sefton KC, sitting at first instance, made an order in the terms that Mr Tabbitt sought in this case. He made an order in that form because there was a dispute about what the QOCS rules actually meant. Thus what was argued on appeal was limited to the meaning of rule 44.14 as it then stood. The question whether the position under the current rules should be preserved even after any rule change does not appear to have been argued. Nor was it in any of the other cases that we were shown.
In Adelekun v Ho [2021] UKSC 43, [2021] 1 WLR 5132 the Supreme Court considered the operation of QOCS. The actual decision of the court was that where a defendant has a costs order in his favour, that costs order cannot be set off against a costs order in the claimant's favour in a case to which QOCS applies. But they also approved the earlier decision of this court in Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654, [2018] 1 WLR 6137 holding that there is no set-off against a sum recovered under an agreed settlement. The court made it clear that their task was simply to interpret the rules as they stood. At [44] they recognised that their conclusion “may lead to results that at first blush look counterintuitive and unfair.” They also recognised at [45] that their interpretation of the rules “may lead to results that appear anomalous.” But earlier in their judgment they said at [9]:
“We should say at the outset that we doubt the appropriateness of a procedural question of this kind being referred to this court for determination. The very fact that two eminently constituted Courts of Appeal have differed profoundly over the interpretation of a provision of the CPR suggests that there must be an ambiguity which practitioners need to have sorted out. The CPRC exists for the purpose of keeping the CPR under constant review. It is better constituted and equipped than is this court to put right such ambiguities, all the more so where, as here, the outcome is suggested by both parties and by the Association of Personal Injury Lawyers (“APIL”), intervening, to have potentially profound policy consequences for the maintenance of a reasonably fair and level playing field in PI litigation, something which this...
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