The shifting sands of Qualified One-Way Costs Shifting – the shift back to defendants

England and Wales

The seasons change, the harsh winds blow and the landscape shifts and changes. Is this a description of the sands of the Gobi Desert or the appropriately named Qualified One-Way Cost Shifting (QOCS)? Following the February 2023 updates to the CPR, it seems both.

The Civil Procedure Rules Committee (CPRC) has moved to implement changes to CPR 44 that willreverse the impact of the Supreme Court case of Ho v Adelekun [2021] UKSC 43 and the Court of Appeal case of Cartwright v Venduct Engineering Ltd [2018] EWCA Civ 1654. The introduction of the QOCS scheme was designed to balance the needs of claimants seeking access to justice with the rights of defendants not to suffer disproportionate cost penalties. That delicate balance had been significantly shifted in favour of claimants by Cartwright and Ho. The amendments correct that, consistently with the overriding objective.


When combined, Ho and Cartwright had shifted the sands of QOCS protection strongly in the favour of claimants. Cartwright provided that defendants could not enforce costs orders in QOCS matters against settlements made by way of Part 36 or Tomlin Order, and Ho later prevented defendants from seeking to set off costs entitlements against the costs recovered by a claimant. This meant defendants could only potentially enforce any order for costs up to the value of any damages and interest recovered by a claimant, and only where those damages were provided for in a consent order or an award at trial.

The cumulative effect of this drastically weakened the bite of defendant Part 36 offers, effectively removing the penalty for late acceptance by a claimant. It provided little deterrent to poor conduct by claimants, there being little prospect of claimants having to pay defendant costs for opposing reasonable interlocutory applications or taking unmeritorious points.

Defendants were therefore relieved to see the Supreme Court in Ho call for the CPRC to consider any imbalance to QOCS as a result. This invitation was accepted by the CPRC, and a consultation into QOCS was launched in May 2022.

Proposed changes and timeline

The CPRC recently made available minutes of a meeting from October 2022 which proposed draft revisions to both CPR 44 and 36 to redress the balance. With the extension of fixed costs pushed back until October 2023, many had expected any changes to the operation of QOCS to take place at the same time. In fact, those changes have arrived much more quickly.

In what has been described as a “costs earthquake” by a deputy costs judge, an amendment to CPR 44.14(1) expands the pot available to a defendant seeking to recover its costs from simply “damages” to “agreements to pay or settle a claim for damages [and/or] costs”, and a new paragraph (2) has been inserted which provides that for  the purposes of QOCS, orders for costs include deemed costs orders as set out in CPR 44.9.

The impact of these revisions is to entirely reverse Ho and Cartwright, greatly widening the potential avenues to recovery. Costs awarded following interlocutory applications, costs incurred due to late acceptance of a Part 36 offer and, if a co-defendant makes a payment, costs incurred by a successful defendant can all now be recovered up to the total of damages, interest and importantly, costs, recovered by a claimant.

These revisions will apply to any case issued after 6 April 2023, meaning the impact will not be seen straight away, but will provide a long-term benefit for defendants. What the announcement will no doubt lead to is a rush to issue, as claimants take advantage of the current arrangement before it is swept away.


The update will be welcomed by defendant personal injury practitioners and their clients and corrects the imbalance created by Ho and Cartwright. It can now be anticipated that costs budgeting for defendants will again become meaningful, Part 36 offers will regain their deterrent effect and promote early settlement, and claimants will be discouraged from running unmeritorious points with little genuine risk of sanction.

The landscape of litigation costs continues to shift as the courts and CRPC attempt to balance the needs of both sides to personal injury litigation. The CRPC have however so far declined to consider removing the detailed assessment process from QOCS entirely and have yet to fully address the issue of late acceptance of Part 36 offers where payment of damages within 14 days may occur before an agreement on costs liability is established. The inclusion of costs as a pot to which enforcement or offsetting can take place does alleviate the Part 36 issues, however.

For more information, please email the authors or your usual CMS contact.