Costs: Failure to pay trial fee contributes to disapplication of QOCS

Background

Can a failure to pay a trial fee result in the disapplication of QOCS on strike out? A recent decision suggests it can – in certain circumstances.

The decision highlights potential for defendants to argue that QOCS be disapplied where the failure to pay the trial fee had been the final act of a consistent course of poor conduct on the part of a claimant.

The Claimants booked a package holiday with Thomas Cook Tour Operations in 2015. They subsequently claimed to have contracted gastroenteritis resulting from unsanitary conditions at their hotel, and initiated a claim for breach of contract against the Defendant.

During the course of the proceedings, The Defendant made an application to have the Claimants' claim struck out after the Claimants failed to provide standard disclosure and an updated schedule of loss.

However, the Court had served the application notice and accompanying documents on the Claimants' former solicitor, who had successfully applied to come off record previously. The hearing was therefore adjourned to allow the Claimants to be served with the relevant documents, and notice of the hearing.

The Claimants also failed to file witness statements whilst the hearing was adjourned. When they also failed to pay the trial fee, their claim was struck out without a hearing.

The matter proceeded to a hearing on costs before the Judge who had struck out the claim.

Outcome

The Defendant argued that their costs should be enforced and QOCS disapplied pursuant to CPR 44.15 which states:

"Orders for costs made against the claimant may be enforced to the full extent of such orders without the permission of the court where the proceedings have been struck out on the grounds that-

(a) the claimant has disclosed no reasonable grounds for bringing the proceedings;

(b) the proceedings are an abuse of the court's process; or

(c) the conduct of –

   (i) the claimant; or

  (ii) a person acting on the claimant's behalf and with the claimant's knowledge of such conduct,

is likely to obstruct the just disposal of the proceedings".

In the original order made after striking out the claim, the Judge had not set out his reasons for striking out the claim, stating only that he had struck out the claim after reading a letter received from the Defendant.

The Defendant therefore submitted that the claim had been struck out not only following the Claimants' failure to pay the trial fee, but as a result of Claimants' inadequate conduct of their claim generally. It was argued that CPR 44.15(c)(i) was engaged as the Claimants' conduct had obstructed the just disposal of the proceedings.

The Judge ordered that QOCS be disapplied and awarded the Defendant full costs.

What can we learn?

• The Judge determined that the word 'conduct' in CPR 44.15(c) could signify a course of conduct. The Claimants' conduct throughout had been inadequate, non-payment of the Trial fee being one element. The allocation order also specifically stated that the Defendant would be entitled to its costs if the Claimants did not pay the trial fee.
• This claim shows the importance of considering what exactly is stated in an order following the striking out of a claim. The Defendant was able to present arguments that QOCS should be disapplied because the Judge had left the door open for further arguments to be made in his order.
• The decision is also of interest as litigants-in-person are expected to increase in number following the whiplash reforms. It is possible that those claims exceeding the small claims track limit, where litigants-in-person miss deadlines and fail to pay fees, may increase. Defendant representatives will therefore be interested to note those opportunities to disapply QOCS where a claimant's conduct fall short of what is acceptable.