How QOCS changes have affected a law firm
Authored by Nelsons Solicitor Matthew Olner (pictured)
The Nelsons Clinical Negligence and Personal Injury Teams carefully considered the QOCS changes introduced in April of this year. We did this by members of the team attending seminars/webinars held by different providers. We considered the proposed changes themselves.
We discussed the changes at Partner level and then at our regular team meetings.
The QOCS changes that came into force on 6 April of this year do introduce major changes. For cases issued from 6 April 2023, defendants can now enforce and seek to offset costs orders in their favour including deemed orders for costs.
Importantly, this means they will be able to recover their costs from successful Part 36 offers and Tomlin Orders. They will also be able to enforce costs of interlocutory hearings. Defendants will be able to seek recovery of costs not just from a Claimant’s damages but also from a Claimant’s costs.
So what will this mean in practice. Claimants and their solicitors will need to very carefully weigh Part 36 offers and in particular early offers. There remain mechanisms open to Claimants to challenge potentially unjust costs consequences of a very early Part 36 offer. Nevertheless, care will need to be taken.
The risks and benefits of making an Application in terms of immediate potential costs consequences will similarly need to be considered. When pursuing multiple Defendants thought will need to be given as to how exactly a claim against a second Defendant is dropped should the need arise, failing which there are likely to be post April QOCS costs consequences.
There is the potential for conflict between a claimant and their solicitor given that defendant costs can now be taken from claimant’s costs as well as damages.
Generally speaking, it looks likely that claimants (and their solicitors) are going to be facing increasing exposure to adverse costs orders going forward. The new rules are, of course, yet to be tested. It seems likely that, given the way the rules are going to bite, there will be satellite litigation in the coming months and years.
For us at Nelsons and, I think, other firms, there are three areas that we have focused on in particular. Firstly, we have reviewed our Terms and Retainer documents and made such amendments as we feel are necessary in light of the changes.
Secondly, we have liaised with our long standing ATE providers at DAS to ensure that the product remains protective. The need for appropriate ATE cover is, in light of the QOCS changes, now more important than ever.
DAS were able to reassure us that our Delegated Authority Scheme would provide necessary cover going forward. It is, nevertheless, early days. We will continue with our usual open and constructive dialogue with DAS as these potentially wide-ranging changes bed in.
Thirdly, we carefully considered whether we should be issuing cases early in the run up to 6 April. We decided on balance that was not necessary. Cases that needed to be issued anyway were issued.
So – in summary – communication is key. Having effective team structures in place and a good working relationship with our ATE Provider remains as ever extremely important.
About DAS Group
The DAS UK Group comprises an insurance company (DAS Legal Expenses Insurance Company Ltd), a law firm (DAS Law), and an after the event (ATE) legal expenses division.
DAS UK introduced legal expenses insurance (LEI) in 1975, protecting individuals and businesses against the unforeseen costs involved in a legal dispute. In 2018 it wrote more than seven million policies.
The company offers a range of insurance and assistance add-on products suitable for landlords, homeowners, motorists, groups and business owners, while it’s after the event legal expenses insurance division offers civil litigation, clinical negligence and personal injury products. In 2013, DAS also acquired its own law firm – DAS Law – enabling it to leverage the firm’s expertise to provide its customers with access to legal advice and representation.
DAS UK is part of the ERGO Group, one of Europe’s largest insurance groups (the majority shareholder in ERGO is Munich Re, one of the world’s largest reinsurers).