Legal Watch:Marine18th September 2014

Issue: 003

In This Issue:

• Is the focus shifting?

• Superior pescadores a question of clause paramount

• Loss of profits after a collision at sea

• NYK Bulkship (Atlantic) N.V. v Cargill International S.A (The Global Santosh) [2014] EWCA CIV 403

• The Jackson Reforms - an update

As the summer season comes to an end and the days draw in, we look this quarter to issues revolving around the points the CA addressed in NYK Bulkship (Atlantic) N.V. v Cargill International S.A (The Global Santosh) [2014] EWCA CIV 403, the ever increasing problem surrounding the control of Legionnaires, Hague in the case of Yemgas FZCO and others v Superior Pescadores S.A. Panama [2014] EWHC 971 and of course an update with respect to Jackson following the ruling in Mitchell at the start of the summer and the impact that Wagenaar v Weekend Travel Limited and Serradj [2014] could have upon the industry.

Gemma Pearce T: 0117 910 0237E: glp@greenwoods-solicitors.com

Introduction

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Whilst relatively inconspicuous in the modern world, Legionnaires’ disease has of late come back into the gaze of the Health and Safety Executive (HSE).

Perhaps a shift in the litigation landscape is leading the change of focus or perhaps it is simply the case that complacency is becoming too common, but one thing is for sure, breaches of regulation resulting in the contraction of the disease are treated very seriously and can often attract fines or even jail terms for offenders. The HSE is currently very active in this area and is looking, amongst other things, to increase criminal prosecutions against persons failing to comply with the rules and regulations.

The effects of the disease can be serious, with a sometimes long period of recovery compromising employment. In the worst case it can be fatal; death occurring in 10 - 15% of sufferers. In fact, 90% of cases of Legionnaires’ disease are caused by just one species, L. pneumophila, a form of pneumonia. Evidence suggests that whilst no one is risk free, those over the age of 50, men, smokers and those with suppressed immune systems are most at risk.

Ships are considered to be high-risk environments for the proliferation of Legionella for a number of reasons. First, source water quality could be of potential health concern if it is untreated or subject only to treatment with a residual disinfectant prior to or upon uploading. Secondly, water storage and distribution systems on ships are complex and could provide greater opportunities for bacterial contamination as ship movement increases the risk of surge and backsiphonage. Thirdly, loaded water may vary in temperature, and in some tropical regions, the risk of bacterial growth is increased because of higher water temperatures. Finally, proliferation is encouraged due to long-term storage and stagnation in tanks or pipes. The increased capacity and size of vessels, along with the increased concentration of people who can potentially be affected make it no surprise that travel by cruise ship ranks eighth highest for reported cases of Legionnaires’ disease

Is the focus shifting?and fourth highest for clusters of contamination in residents of England and Wales.

The World Health Organisation acknowledges that hundreds of cases of Legionnaires’ disease have been associated with ships and often in clusters. They allude to an outbreak of Legionnaires’ disease in 1994 which left 50 passengers affected on one ship including a fatality, but note that where there is an outbreak it is common for at least two people to suffer symptoms. Staff and maintenance workers can also be affected. In one reported case a boiler repairer contracted Legionnaires’ disease on a ship after exposure to warm rusty water leaking into a steam boiler from a tank external to the boiler. The problem is not restricted to passenger ships either. Surveys carried out on general cargo ships have shown drinking water and air conditioning systems to be contaminated with Legionella pneumophila. Serologic surveys of seafarers on cargo ships have also shown that a high proportion have antibodies to Legionella pneumophila, suggesting that those on board are at increased risk of legionellosis compared with communities onshore.

Whilst it is acknowledged that it is not practical to remove completely Legionella bacteria from all the wet environments of a ship, it is practical to reduce their numbers to levels that make the contraction of legionellosis on board less likely.

In November 2013 guidance was issued in the form of secondary legislation from the HSE, the Approved Code of Practice (ACOP) – L8. This should be given appropriate consideration and elevates the following issues to ACOP status for employers:

• risk assessment• the specific role of an appointed competent person,

known as the ‘responsible person’ • the control scheme• review of control measures• duties and responsibilities of those involved in the

supply of water systems

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In August 2014 the HSE reviewed the symptoms of Legionnaires’ disease and how it is treated. It reiterated that duties under the Health and Safety at Work etc Act 1974 extend to risks from legionella bacteria which may arise from work activities and underlined the importance of accurate record keeping.

The Management of Health and Safety at Work Regulations provide a broad framework for controlling health and safety at work. More specifically, the Control of Substances Hazardous to Health Regulations 2002 (COSHH) provide a framework of actions designed to assess, prevent or control the risk from bacteria like Legionella and take suitable precautions. It is worthy of note that if contractors are employed to carry out water treatment or other work, it is still the responsibility of the assigned ‘competent person’ to ensure that the treatment is carried out to the required standards. Such duties will likely be considered in the context of claims under the Athens Convention and/or PLR (EC 392/2009) and the following legislation should not be overlooked either:

• Merchant Shipping (Provisions and Water) Regulations 1989

• Merchant Shipping (Crew Accommodation) Regulations 1997

• Merchant Shipping (Crew Accommodation) (Fishing Vessel) Regulations 1978

• Merchant Shipping (Crew Accommodation) (Fishing Vessels) (Amendment) Regulations 1998

• Merchant Shipping & Fishing Vessel (Health & Safety at Work) Regulations 1997

• Merchant Shipping (Ships’ Cooks) Regulations 1981

• Food Hygiene Regulations 2006, as amended

• Public Health (Ships) Regulations 1979 as amended

• The MCA’s Code of Safe Working Practices for Merchant Seamen

Notably, The Maritime Labour Convention 2006 which came into force on 7 August 2014 in the United Kingdom, also covers standards for the sanitisation of water (as reflected in the MCA’s Code of Safe Working Practices for Merchant Seamen).

The writing is on the wall. Given the risk, renewed interest in the disease, the potential for high profile cluster contaminations, not to mention the expense of associated litigation, it is easy to see that it is in the best interests of all to keep up to date and to comply with all applicable recommended measures for the prevention of this disease.

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Superior pescadores - a question of clause paramountYemgas FZCO and others-v-Superior Pescadores S.A. Panama [2014] EWHC 971.

A claim arose out of damage to machinery and equipment intended for use in the construction of a liquid natural gas facility in Yemen. The cargo in bay one shifted whilst the vessel was crossing the Bay of Biscay resulting in significant damage.

The owners shipped six bills of lading to acknowledge shipment of the cargo in apparent good order for carriage from Antwerp to Yemen. Each bill of lading was for a number of packages and contained on the reverse side a paramount clause in terms that are widely used within the industry.

In the main, the claimant’s relied on the clause paramount as a contractual incorporation of the Hague, but not the Hague-Visby Rules and therefore averred they were entitled to the higher limits afforded therein. However, within some of the bills of lading the applicable Hague-Visby Rules allowed for a higher limit. The claimant’s therefore argued for which ever produced the highest sum on the premise that the clause paramount did not specifically qualify which rules applied. The defendant’s contended that they were not entitled to pick and choose between the Hague package limit and the Hague-Visby package limit depending on which proved more favourable.

The court was asked to consider three issues concerning the effect of the clause paramount in a bill of lading and package limitation provisions of the Hague and Hague-Visby Rules:

1. The meaning in a clause paramount of the phrase “the Hague Rules…as enacted in the country of shipment”. Specifically, what was the position if the country of shipment had enacted the Hague-Visby Rules?

2. Contractual allowances as permitted within the Hague-Visby Rules to agree a higher limitation figure than that stipulated within the rules

3. Whether or not under the original Hague Rules the time for converting the gold value into money was the date of the judgment or some earlier time

It was agreed that English law would apply. This included the Carriage of Goods by Sea Act 1971 which rendered the Hague-Visby Rules applicable when the carriage is from a port in a contracting state.

The court was at odds with the argument that there was an agreement for the Hague Rules to apply, as enacted in country of shipment, where English law was in force and the parties had to have known that the Hague-Visby Rules would therefore apply compulsorily to a shipment from a contracting state. They considered that the parties must have realised that a contractual choice of the Hague Rules would be largely ineffective. It was therefore seen as implausible to attribute to them such a contractual choice. The instant agreement was therefore invalid only to the extent that it did in a particular case produce a limit lower than permitted by the Hague-Visby Rules. However, on the facts of the case, to apply the Hague Rules’ limit in that way would produce an irregular result. The parties had to have been taken to have understood that the original Hague Rules would not apply because Belgium was a Hague-Visby state. It further seemed improbable that they could have intended a single contract of carriage to be covered simultaneously by two differing limitation of liability regimes with differing provisions. The “pick and mix” approach seemed a surprising business concept to agree to and there was no good reason to construe the bill of lading in a way which attributed that un-commercial intention to the parties.

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The court noted that it was possible in theory for the parties to agree for the Hague Rules limitation figure, but this would only give effect to that agreement insofar as it resulted in a higher limit of liability than the amount provided for in the Hague-Visby Rules and they found no evidence of any such arrangement in the present matter. The Hague-Visby Rules limit therefore applied.

The court further confirmed that the relevant date for conversion of gold value into money was the date of the delivery. In the case of loss, the date of when the goods should have been delivered as this is the date on which the claimant’s loss would have crystallised and therefore the date on which the cause of action accrued.

The importance of the business efficacy should not be underestimated. This finding offers a commercially sound result which in addition, provides an element of certainty it what can be an ambiguous arena for the unwary.

Diminution of vessel valueIn Waterdance Ltd v Kingston Marine Services Ltd, the claimant owned and operated a commercial fishing vessel. In 2007, the vessel suffered damage to its engine; the claimant argued that it had been caused by the negligence of the defendant. The value of the vessel was approximately £680,000, but the repairs would cost £435,000. The claimant decided to decommission the vessel under a government scheme in return for a grant payment of £1,119,000.

The claimant then claimed damages from Kingston Marine for diminution in the value of the vessel and for loss of use. Kingston Marine disputed the claim, stating the claimant had not suffered any loss because they had decommissioned the vessel.

The court ruled that the claimant had suffered an immediate and direct loss at the time the damage had occurred. The measure of that loss was the reasonable cost of the repairs required to put the vessel back into the condition in which it had been before the damage had occurred even though the vessel had never been repaired. Neither had the claimant’s

loss been avoided or mitigated by the receipt of the grant payment.

The court made clear that events which took place after the damage had occurred were irrelevant when calculating the diminution in value in order to assess damages. As a result of the scrapping of a vessel, or a decision to delay repairs, or even the opportunity to perform the repairs at a reduced price, will not prevent a claimant recovering the diminution in value to his vessel caused by the defendant.

The court also made clear that diminution in a vessel’s value does not have to be assessed by reference to her open market value but the cost of repairs was only evidence of the extent of any diminution in value itself, not the loss actually suffered. The key principle was that the diminution in value had been caused by the damage, not what the undamaged value may have been.

It was recognised by the court that there could be circumstances in existence at the time of the damage which would mean that, even though the vessel had suffered physical damage, there was in fact no diminution in value.

The burden of proof was on the defendant to show this, and the defendant had failed to do so in this matter. This was because whilst the decommissioning scheme was well known by the time the damage occurred, there was no certainty at that time that the vessel would be accepted under the scheme or, if so, what would be offered under it.

The level of the decommissioning grant was assessed by reference to the value of the vessel in its undamaged state. Because of this, it could not be said that a damaged vessel would necessarily have the same value to its owner before and after the damage occurred.

This case may be of interest to any ship owner whose vessel is damaged and who wishes to claim damages equivalent to the reduction in her value. This case shows that the owner should be entitled to damages at this level even if he later manages to sell the vessel at a higher value and that a defendant will not ordinarily be able to persuade the court that any such windfall should be taken into account when assessing damages.

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Loss of profits after a collision at seaAstipalaia v Hanjin Shenzhen.

The court was required to quantify a claim for loss of profit suffered by the claimant as a result of a collision with the defendant’s vessel in March 2008. The claimant’s vessel was a large crude oil tanker operating on a well-defined trading pattern. The vessel was used by the oil majors.

The collision occurred when she was approaching Singapore to dock. After having some temporary repairs in Singapore, the vessel was sent to Dubai for permanent repairs. The voyage took 10 days and the repairs a further 12 days. Before the collision, the claimant had been negotiating the vessel’s next contract but nothing had been secured. When the vessel was returned to the claimant, she had lost her oil major approvals and could not return to her normal employment. The claimant accepted a contract as a floating storage tank for around two months while the approvals were being reinstated.

The claimant stated that the vessel’s ability to trade had been impaired from the date when she would have departed Singapore until the date she was due to complete the floating storage fixture, a loss period of 91.5 days. The claimant requested that the court should award the net earnings which probably would have been generated, less the mitigation receipts from floating storage. The defendant argued that the period of loss ended when the vessel was returned to service immediately after completion of repairs. It disputed that the pre-repairs voyage counted towards the period of detention and that there was a valid claim for the period during which oil major approvals were being recovered.

Damages The following principles were applied:

1. The owners of a lost or damaged vessel were entitled to indemnity for either the replacement or repair of an injured vessel

2. An indemnity was due where the vessel was lost as a profit-making chattel

3. The quantification of loss required determination of the period of loss of use

4. The damages were those directly caused by the collision

5. A claimant might recover for loss of use even when the vessel was being used in a non-profit earning capacity

6. Calculation of loss might be based on loss of an actual fixture, or by taking an average using comparable earnings of a similar vessel

7. Damages for detention were not recoverable where a claimant acted unreasonably or where the period of loss would have occurred in any event

8. The period of detention would usually start after the collision and end when the vessel was back in commission. Where the full operation of the vessel was restricted after repairs, detention ran until she was able to regain her usual trading pattern

9. Damages could be reduced if a defendant proved that a claimant had failed to mitigate their losses

10. The court should give effect to the total period of detention arising from a collision, rather than being restricted to the period of a specific lost charter

It was impossible to say that the claimant would have obtained the contract being negotiating when the collision happened. Therefore, it could not form part of the claimant’s loss.

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The pre-repair voyage was not part of the vessel’s detention resulting from the collision. It was probable that after discharging at Singapore, she would have been employed from the Arabian Gulf. Therefore, she would have made the journey in any event.

The relevant period of detention was 80.5 days, which comprised a 12-hour delay in Singapore plus the period from the start of the repairs until the end of the floating storage fixture. The fact that she needed to obtain oil major approvals before returning to her normal employment was a matter to be included in assessing the detention period. In calculating the “fair earnings” to represent the claimant’s losses, it was usual to reduce loss to a daily rate and multiply that rate by the number of days in the detention period. It was not inappropriate for experts to rely on rates from the voyages of comparable ships. The respective approaches of the experts in the case differed widely and were over-technical. In the circumstances, the best approximation of loss was the mean of the experts’ opinions.

SummaryThis judgment confirms that an owner can claim damages not just for the immediate loss of use of the vessel during the period of repairs but also for further knock-on effects to the vessel’s ability to return to normal trading, provided that such knock-on effects are not too remote and that the loss can be proven by evidence.

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NYK Bulkship (Atlantic) N.V. v Cargill International S.A (The Global Santosh) [2014] EWCA CIV 403The Facts The vessel was time chartered from its owners, NYK Bulkship (Atlantic) N.V. by the appellant charterer, Cargill International SA, for one time charter trip from Sweden to West Africa on an amended NYPE form.

Cargill sub-chartered the vessel to Sigma Shipping Ltd by way of a voyage charter. The vessel seemed also to be sub-sub-chartered under a voyage charter by Transclear SA.

The cargo shipped on board the vessel was one of six shipments of cement, which was sold by Transclear to IBG Investments Ltd (IBG). Pursuant to the sale terms, IBG were responsible for the unloading of the cargo, and were also liable to pay Transclear demurrage if discharge was delayed.

The vessel arrived at the Port Harcourt, but was held at anchor due to congestion partly caused by the breakdown of IBG’s unloader. After, more or less, two months she was called in to berth but was sent back because, on the previous day, Transclear had obtained an arrest order issued by the Federal High Court of Nigeria on the cargo to secure their demurrage claim of $1,560,000 against IBG. The order also mistakenly named the vessel as the object of the arrest.

Cargill withheld hire under clause 49 of the charterparty in respect of the period for which the vessel was under arrest.

The Arbitration The issue before the arbitrators was “Whether Cargill was entitled to put the vessel off-hire while the cargo was under the arrest at the instance of Transclear.”

This issue was addressed by the tribunal in two parts:

(i) The general scheme of clause 49:

A mistaken arrest was still an arrest for the purpose of clause 49, and accordingly, by reason of both detention and arrest, the vessel was prima facie off-hire.

(ii) The proviso to clause 49:

The majority of the tribunal concluded that the detention or arrest of the vessel had not been caused by the personal act or omission or default of Transclear as Cargill’s agent, and that the vessel was accordingly off-hire for the period claimed by Cargill. The tribunal based its decision on the fact that there was “no evidence that Transclear was performing Cargill’s obligation to load or discharge…[the vessel]…it is clear that…Cargill had no interest in an arrest of either ship or cargo. Transclear was therefore acting on its own behalf to secure Transclear’s claim against IBG for demurrage”.

The Commercial Court (on NYK’s appeal)The court upheld the tribunal’s rejection of the submission that Transclear was Cargill’s agent in discharging the vessel, as there was no evidence that Transclear was performing Cargill’s obligation to discharge. However, he then went on to decide that sub-charterers or sub-sub-charterers or receivers to whom Cargill, by sub-letting the vessel, had delegated or sub-delegated the performance of their obligations, can be deemed to be Cargill’s agents for the purpose of the proviso, irrespective of their precise contractual relationship.

Field J held that IBG was Cargill’s agent, as IBG “became Cargill’s delegate of the obligation to unload under clause 8 by reason of the sale contract”.

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Turning to causation, the Court decided that “the causal relationship between the act, omission or default within the postulated clause 49 event...has to be such that it can be said as a matter of commercial sense that the latter was caused or brought about by the former”

On the above basis Field J held that it was ‘plainly arguable’ as a matter of commercial sense that the mistaken arrest of the vessel was caused or brought about by IBG’s failures; and he exercised his discretion under s.69(7)(c) of the Arbitration Act to remit the question of causation back to the arbitrators.

The Court of Appeal (on Cargill’s ap-peal and NYK’s cross-appeal)Cargill argued that the proviso to clause 49 applied only when the ‘agent’ concerned was carrying out a delegated obligation of the charterer. Furthermore, Cargill submitted that it followed that the proviso only applied when the act (or omission, etc.) of the ‘agent’ under the separate contract could be matched with an obligation of Cargill under the charterparty. Unlike IBG, Cargill was not under any obligation to discharge within a specified time period. Counsel for Cargill also raised the question as to whether the mistaken arrest of the vessel broke the chain of causation.

On the other hand, NYK submitted that the liberty to sub-let provision was central to the commercial scheme of time charterparties. In that context, the word ‘agent’ in the proviso to clause 49 was to be broadly construed. The proviso matched the broad and familiar risk allocation between shipowners and time charterers in respect of delay. Where an arrest had been occasioned by the act of a party on the time charterer’s side of the line, the proviso applied and the vessel remained on hire.

The Court’s rulingThe Court of Appeal followed the guidance provided in the judgment of Lord Clarke of Stone-cum-Ebony in Rainy Sky v Kookmin Bank. In doing so, the court initially examined the language of the proviso, and thereafter considered it in light

of the charterparty as a whole and finally the commercial context. Where a there is more than one construction or interpretation of a clause the court should follow the interpretation which is consistent with business common sense.

The court ruled that under clause 49, if the vessel is arrested/detained she is off-hire. The burden is then on the owners to show that the arrest was occasioned by any personal act or omission or default of the charterers or their agents. The word “agents” in the proviso was not limited to actual agents but could include “delegates” of Cargill irrespective of the precise contractual relationship. The Court of Appeal did not agree with Field J’s decision that Transclear (the sub-sub charterer) was not Cargill’s agent and decided that Transclear was a delegate of Cargill along with IBG, and it remained a delegate even if the act or omission was not in the course of performance of the delegated task.

The Court of Appeal took a broad commercial approach and decided that while Cargill was indeed under no obligation to discharge the cargo in a given time, the dispute between Cargill’s delegates, Transclear and IBG arose from Cargill’s trading arrangements concerning the vessel.

It was held that “hire will continue to run where the act, omission (etc.) is that of Cargill or its delegates – and thus, in a broad sense, on Cargill’s rather than NYK’s side of the line”.

The Court of Appeal upheld the decision of Field J that the question of causation (and any break in the chain of causation) was to be remitted back to the arbitrators.

ConclusionThe Court of Appeal took a commercial broad brush approach and, in its own words, its decision “gives effect to the familiar division between owners’ and charterers’ spheres of responsibility”.

The court read the terms of the charterparty as a whole in order to give effect to the intention of the parties. Accordingly the word ‘agents’ in the proviso to clause 49 was read in the context of the liberty to sub-let to include delegates of the

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charterer irrespective of the precise contractual relationship or whether the delegate was performing a delegated obligation of the charterer. Henceforth it is probable that the use of the word ‘agents’ in such provisos may be read to include all sub charterers, shippers and receivers.

From a time charterers/disponent owners’ point of view they must ensure that when they are sub chartering the vessel they must either have back to back off-hire clauses if they are sub-letting the vessel on a time charter basis, or adequate demurrage provisions if they are sub chartering the vessel on a voyage basis so that they receive adequate compensation for any hire paid to owners during such periods.

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The Jackson Reforms – an updateOn 4th July 2014, the Court of Appeal issued new guidance in granting relief from sanctions, following several months of uncertainty in the lower courts following the decision in Mitchell v News Group Newspapers Ltd.

The Court of Appeal upheld three appeals relating to relief from sanctions under rule 3.9 Civil Procedure Rules. Whilst stating that the decision in Mitchell remained ‘substantially sound’, Lord Dyson also highlighted that guidance within the judgment had been ‘misunderstood and is being misapplied by some courts’.

In an attempt to clarify the guidance in Mitchell, Lord Dyson stated that the court should concentrate on the following aspects when deciding whether relief from sanctions can be sought:

1. The seriousness and significance of the breach

2. Why the breach occurred

3. The circumstances of the case

This means that courts will now have to consider the weight of the breach as well as the circumstances of the case.

The Court of Appeal clarified that the limited circumstances given in the Mitchell judgment, such as a solicitor suffering from a debilitating illness or being involved in an accident, were merely examples and not the only instances in which relief will be granted.

Further, the Court of Appeal made it clear that if a party unreasonably refuses to agree to an extension of time or to an application for relief from sanctions, they face heavy costs penalties. These costs penalties may not be limited to the costs of making the application but may also result in indemnity costs being awarded. This should mean that contested applications for relief from sanctions will be rare and should only arise in exceptional circumstances.

The judgment is welcome news for those involved in civil litigation. Although it is of upmost importance to comply with court orders and directions, this new guidance from the Court of Appeal brings back common sense and the administration of justice into the question of whether relief from sanctions can be sought.

QOCS UpdateThe recent Court of Appeal case, Wagenaar v Weekend Travel Limited and Serradj [2014] (Wagenaar) highlights the importance of costs consideration for defendants in personal injury claims.

In this case, the claimant brought a claim against the defendant tour operator for injuries suffered whilst on a ski holiday in France. The claimant alleged negligence on the part of the defendant’s supplier, a third party ski instructor.

The defendant then brought a Part 20 additional claim against the third party ski instructor for indemnity and contribution against the third party.

Both claims were dismissed and in the first instance, the judge ordered that the defendant was awarded its costs against the claimant and that the third party was awarded her costs against the defendant. However, the judge went on to apply Qualified One Way Costs Shifting (“QOCS”) to both claims. This meant that both parties were liable to pay their own costs.

QOCS was introduced as a part of the Jackson Reforms in April 2013. If a claimant wins a case, they recover their costs, but claimants do not pay costs orders in favour of the other side, except up to the extent of any damages and interest awarded.

The defendant and the third party appealed against the decision on the basis that the QOCS provisions were ultra vires and that the QOCS provisions did not apply to the additional Part 20 claim.

The information and opinions contained in this document are not intended to be a comprehensive study, nor to provide legal advice, and should not be relied on or treated as a substitute for specific advice concerning individual situations. This document speaks as of its date and does not reflect any changes in law or practice after that date. Greenwoods Solicitors is a trading name of Parabis Law LLP, a Limited Liability Partnership. Incorporated in England & Wales. Reg No: OC315763. Registered office: 8 Bedford Park, Croydon, Surrey CR0 2AP. Parabis Law LLP is authorised and regulated by the SRA.

www.greenwoods-solicitors.com.

Contact UsFor more information please contact:

Gemma Pearce, Head of Marine

T: 0117 9100 237E: glp@greenwoods-solicitors.com

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The Court of Appeal rejected the argument that the QOCS rules were ultra vires. The court stated that relevant legislation was to be read subject to the powers of the rules committee and that the rule making authority has every right to control the exercise of its discretion in relation to costs. Thus, the defendant’s appeal was dismissed.

However, the third party was successful in its appeal. The court agreed that the QOCS provisions were intended to protect injured parties from facing adverse costs consequences. The QOCS provisions were not applicable under a Part 20 claim in relation to apportionment of damages.

CommentThe Court of Appeal has stated that the QOCS provisions apply to personal injury cases and not to any additional claims which do not involve personal injury.

Therefore, defendants will need to consider whether it would be economical to bring a Part 20 claim as this could leave them exposed to additional costs. Indeed in the Wagenaar case, the defendant would have actually been better off if both claims had succeeded.