As Personal Injury specialists, we often hear this query from new clients. People are understandably concerned that if they lose their case at Court, while their own solicitor’s costs may be covered by a “no win no fee” type of arrangement, they will have to pay thousands to the Defendant.
Historically this was a problem
Prior to 1 April 2013, if you, as the Claimant, lost a case, you would be liable to pay the Defendant’s costs. This would be subject to any insurance you had taken out to cover this risk, which might pay any adverse costs order.
Nowadays, it is less of an issue
From 1 April 2013, Qualified One Way Cost Shifting was introduced. The effect of this is that if you are the Claimant and you lose your case, subject to a few exceptions, you will not be liable to pay the Defendant’s costs.
What are the exceptions?
While there are still a few circumstances where you may have to pay the Defendant’s costs if you are unsuccessful at Court, these are easily avoidable. The exceptions to the rule that you will not be liable to pay the Defendant’s costs are:
1. The Court finds that, on the balance of probabilities, the claim is fundamentally dishonest, i.e. you lied or fabricated evidence Easy solve: ensure you provide your solicitor with all the correct information.
2. The Court strikes out the claim on the basis that there were no reasonable grounds for bringing the proceedings, that it is an abuse of process or there has been conduct which is likely to affect the just disposal of the proceedings. Easy solve: your solicitor will be able to advise you whether you have a valid claim and will work with you to ensure that the claim is dealt with properly.
3. You fail to beat the Defendant’s Part 36 offer to settle. This is where the Defendant makes an offer to settle which you reject, and you are then awarded by the Court either less than, or the same as the Defendant’s offer. If this happens, you will be liable for the Defendant’s costs from the time that the offer lapsed. However, if this occurs, the level of costs is capped at the level of compensation which you are awarded. Easy solve: You can obtain specialist insurance to cover the risk of this, or you can choose to accept the offer, subject to its reasonableness.
A cautionary tale
The Law Society Gazette recently published a cautionary tale relating to a Claimant who submitted a fraudulent claim for loss of income in the sum of £7,250 following a car crash in 2014. He was later discovered to have fabricated his losses and the police were then involved. He was sentenced to 150 hours of unpaid work and ordered to pay £860 in costs (for the criminal case) after being found guilty of fraud by false representation.
Whilst this does not detail the effects the fraud had on his civil claim, this is an example where it is highly likely that he may have been ordered to pay the Defendant’s costs based upon fundamental dishonesty.
If you would think you may have a personal injury claim and wish to discuss it, please give our specialist personal injury solicitors a call on 01924 692125.