Costs/Costs Set-Off not possible in QOCS cases – the Supreme Court settles the question … for now: Ho v Adelekun [2021] UKSC 43

A little over two years ago I wrote an article about a then-unreported decision of the Court of Appeal which decided that it was possible for the Court in a QOCS case to set-off an order for costs in the defendant’s favour against an order for costs in the claimant’s favour (“a costs/costs set-off”): https://www.dekachambers.com/costs-set-off-in-qocs-cases/.

That decision was Howe v Motor Insurers’ Bureau (“Howe”), which was belatedly reported as [2020] Costs LR 297. I remarked that it was surprising that Howe was not better-known, given its potentially profound effect on personal injury litigation. I also remarked that Howe had settled the matter in favour of the Court being able to order a costs/costs set-off (“at least until such time as it is considered by the Supreme Court”).

That time has now arrived. In a decision handed down today, the Supreme Court has decided that the Court does not have a discretion to order a costs/costs set-off in QOCS cases: Ho v Adelekun [2021] UKSC 43 (“Ho”).

Ho reached the Supreme Court because a differently-constituted Court of Appeal in that case had doubted Howe but felt constrained to follow it. There were therefore two decisions of the Court of Appeal which were conflicting in all but name. The Supreme Court preferred the reasoning and conclusion of the Court of Appeal in Ho and therefore Howe is no longer good law.

To echo the phraseology of my earlier article: the matter has now been put beyond doubt (at least until such time as it is considered by the Civil Procedure Rule Committee (“CPRC”)).

Why do I say that?

The Supreme Court decided the appeal with a degree of diffidence. It expressed doubt as to “the appropriateness of a procedural question of this kind being referred to this court for determination” and remarked that the CPRC was “better constituted and equipped to put right” ambiguities in the rules, “all the more so where, as here, the outcome is suggested …to have potentially profound policy consequences for the maintenance of a reasonably fair and level playing field in PI litigation”. Permission having been given, however, the Court felt obliged to decide how the rules were to be construed, “leaving it to the CPRC to consider whether our interpretation best reflects the purposes of QOCS and the Overriding Objective, and to amend the relevant rule if, in their view, it does not”: see paragraph 9 of the judgment of Lord Briggs and Lady Rose (with whom the other members of the Court agreed).

In a later article, I hope to analyse the decision in Ho in more detail, and make some observations on how the CPRC should consider the issue (as consider it the CPRC surely must, given the very clear invitation of the Supreme Court to do so).

For the moment the message to practitioners must be: watch this space.