QOCS – Uncertainty, Unfairness and Satellite litigation Martin Coyne Managing Partner Ralli Solicitors LLP

The Present System v QOCS White Paper – will only apply to PI Costs shifting – Loser Pays - D or C One Way Costs Shifting – D always pays “Qualified” One Way Costs shifting – D generally pays unless exceptions apply then C pays. QOCS encourages claims repudiation QOCS Access to Justice reduced Government income reduced

QOCS Exceptions– When C Pays Costs If C’s case is fraudulent If C’s case is frivolous If C’s case is unreasonable On financial means grounds – where C is very wealthy If D is uninsured – how can C know this? Speculative claims – losing C pays minimum payment towards D’s costs

Effects of Current QOCS proposals Rules require full costs advice to C – scare Claimant’s with no ATE AJAG Consumer Survey – 77% would not claim if risk of paying costs Without proper ATE cover 25% drop in legitimate cases (206,000) MINELAS – C to reveal income, liabilities and assets – D will enquire

QOCS needs ATE ATE companies said non recoverability of additional liabilities will kill ATE business Pernicious exceptions will encourage ATE to live on? RTA Portal cases – no ATE? Non portal RTA – need ATE EL / PL – less predictable – need ATE Lower policy volume = higher premiums paid by C ATE policy may neutralise D’s costs threats to C – but maybe not

Alternatives - Solicitor Indemnity Sibthorpe & Morris v London Borough of Southwark [2011] ECWA Civ 25 Code requires best cost advice to C Indemnity to be disclosed N251 C needs to know Sols bank will meet cheque – full disclosure of Sol’s private borrowing to C SI will not work in tricky volume matters A non – starter except for the odd case?

Satellite Litigation – The Good Old Days Fraud – satellite litigation Frivolous = satellite litigation Unreasonable = satellite litigation Wealthy C definition? = satellite litigation Interlocutory Orders exceptions apply? = satellite litigation Part 36 = satellite litigation Proportionality= satellite litigation increases costs D uninsured = satellite litigation ATE policy will probably not negate SL LI and D sols think they are untouchable Pre issue conduct enquiries from D to soften up C Subjective tests before the courts Tsunami of interlocutory applications

Practical Considerations QOCS create asymmetric positions for C & D ATE is needed with QOCS by C for certainty CMC’s / sols require ATE commissions NB will ATE cover be needed in RTA Stage 3 portals? Deferred ATE disbursement paid by client from compensation ATE premium to be self insured in abandoned and lost cases ATE Co’s will sieve unmeritorious/ fraudulent cases ATE Co’s need to means test C –wealthy ATE policies to be re-written C’s disbursements to be covered Will “Shameless” clients need ATE? yes BTE checks still needed – uneconomic / regulation?

Practical Considerations QOCS - predicted fraud increase? If no ATE – psychological intimidation of C by D to withdraw or under settle at every stage If no ATE – no staged case review ATE premiums not subject to 25% cap Clients may pay out over 25% of compensation in costs Barristers will do CFA’s with zero success fees for volume MINELAS could be means tested by D or ATE provider – soften up C Sign up agents needed to secure cheque payment authorities at outset. No ATE massive reduction in actionable cases Minimum contribution to D’s costs – how much?

What Must We Do ? Join AJAG to influence reform for future Claimant’s Contribute financially to AJAG c/o Ralli Solicitors LLP Effective lobbying buys more time Lobby and meet your MP – all of your staff Provide anecdotal evidence of potential injustice Read the recent AJAG response to the White Paper

Now is the Time to Act Contact – join with AJAG contributions and Contribute financially to AJAG c/o Ralli Solicitors LLP - money held in clients account. 1 year at least of future lobbying MP’s and the MoJ Make a difference

Please Do it Now !!