The Issues:

The Claimant suffered an industrial injury and issued proceedings against three Defendants.

The second Defendant (D2) denied having employed the Claimant, and after exchange of evidence the Claimant discontinued the claim against them. At trial Claimant successfully recovered £20,000 in damages against the first and third Defendants (D1 and D3).

The parties were agreed that the Claimant’s claim was subject to QOCS.

The 2^nd Defendant sought to amend the trial Order (no order as to costs) for the Claimant to pay the 2nd Defendant’s costs following discontinuance pursuant to CPR 38.6.

The Claimant maintained that if the trial Order was so amended, such an Order would be unenforceable in any event as QOCS would apply.

The 2nd Defendant argued that proceedings meant the entirety of the claim, encompassing the claim against all three Defendants. Therefore, the 2nd Defendant could set off its costs against any order for damages made in favour of the Claimant to be paid by the 1^st and 3^rd Defendants.

The Claimant averred that the core principle of QOCS is that the Claimant would never be liable to pay costs themselves, but that any costs order made would be “set-off”, or deducted, from the damages paid by the Defendant seeking to set-off. In the context of QOCS, “proceedings” referred to individual claims, not the entirety of the claim. Any set-off could therefore only be made in relation to proceedings against the 2^nd Defendant and as they had paid nil in damages, they were not entitled to seek a set-off against damages paid by the remaining Defendants.