Insurers and the courts could see a rush of civil claims in the run up to Easter as claimants seek to pre-empt the introduction of new rules on legal costs that are more favourable to defendants.
According to global law firm Clyde & Co, a statutory instrument laid before parliament last week and due to come into force on 6 April 2023 will increase the likelihood of unsuccessful claimants having to pay a proportion of the defendant’s legal costs.
The statutory instrument makes changes to the rules on Qualified One-Way Costs Shifting (QOCS), which was introduced in civil cases in 2013. According to Clyde & Co partner Paul Wainwright, QOCS was intended to act as a shield against excessive defence costs for genuine but unsuccessful claimants. But subsequent appeal judgements weakened the QOCS regime in favour of claimants. In 2022, the Ministry of Justice addressed the situation with a consultation which resulted in the new statutory instrument designed to rebalance the situation.
Paul Wainwright said: “These are crucial amendments and will enable defendants to manage claimants’ adverse behaviours. However, one inevitable consequence is that there will likely be a rush to issue claims prior to April 2023 to ensure they are subject to the existing regime.
“Current QOCS rules are extremely beneficial to claimants – and their solicitors – so it’s highly likely that as many civil claims as possible will be issued in the next two months.
“The proposed amendments have largely fixed the problems caused by development of the jurisprudence and crucially all modes of settlement are now deemed to be QOCS compliant.
“On a practical level, though, having two sets of QOCS rules is going to prove awkward in practice and it is highly likely to lead to further satellite litigation.”
The new rules increase the ease with which cost orders against unsuccessful claimants can be enforced.
Clyde & Co has said it will monitor claimant solicitors’ behaviour over the coming months.
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