Open call for evidence

Costs protection for discrimination claims: Call for Evidence

Published 27 November 2024

Applies to England and Wales

Executive Summary

1. This Call for Evidence

1.1 In this Call for Evidence, we are seeking views and evidence on the current arrangements for bringing discrimination claims in the civil courts in England and Wales and, specifically, whether costs protection should be extended to discrimination claims, to inform our decision-making process on this issue. MoJ has been considering this issue for some time, and now seeks the views of stakeholders to help improve our understanding.

1.2 Although MoJ has been considering the costs arrangements in respect of discrimination cases since before the 2019 Post-Implementation Review (PIR) of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) Act 2012^{[footnote 1]}, the issue was highlighted by a 2020 Judicial Review (JR), R (Leighton) v Lord Chancellor [2020] EWHC 336 (Admin) (henceforth Leighton)^{[footnote 2]}. In Leighton, the claimant argued that costs in discrimination cases allocated to the fast-track or the multi-track can hinder access to justice, given that a claimant is at risk of having to pay the defendant’s costs (‘adverse costs’) if they lose a case, and is thus disincentivised to bring a claim which might have merit. Specifically, the claimant applied for judicial review of the then Lord Chancellor’s decision not to extend/failure to extend qualified one-way costs-shifting (QOCS) to discrimination claims in the county court.

1.3 In Leighton, the High Court considered whether the then Lord Chancellor had:

• Failed to comply with the Public Sector Equality Duty (‘PSED’) imposed by the Equality Act 2010;
• Acted irrationally; and
• Breached European Convention on Human Rights (ECHR) articles 6 and 14 or the common law right of access to a court.

1.4 In Leighton, the Court accepted that, at the time of the 2019 PIR of Part 2 of LASPO, MoJ did not consider that it had sufficient information to take a decision about the extension of costs protection to discrimination claims. It was held that, as the then Lord Chancellor had not yet decided whether to extend QOCS, or some other form of costs protection, to discrimination cases in the county court, he had not failed to comply with his public sector equality duty nor had he acted irrationally. Moreover, it was held that the current costs regime for discrimination claims in the county court does not breach ECHR articles 6 and 14 or the common law right of access to a court.

1.5 Therefore, the Leighton JR was ultimately dismissed.

1.6 The decision-making process of whether to extend some form of costs protection to discrimination claims is still on-going. This Call for Evidence is intended to assist the Ministry of Justice with that process and is a part of our continued policy making on this issue. Although the Leighton JR highlighted the issue, this is a process that dates back to 2019, to the time of the Part 2 PIR Report, and before. Through this Call for Evidence, therefore, the Ministry of Justice is looking to understand further:

• Whether stakeholders consider there are any obstacles to bringing discrimination claims.
• If so, whether this is related to adverse costs.
• If so (in respect of both issues (i) and (ii)), what the most appropriate response would be, and how this might be implemented.

1.7 The Ministry of Justice does not as yet consider that it possesses sufficient data or evidence to enable it to make a decision on whether costs protection should be extended to discrimination claims in the civil courts, and, if so, in what format. In summary, this Call for Evidence:

• Seeks data and evidence on the extent of the issue, to establish whether there is an issue which requires addressing.
• Explores different models of costs protection which might be suitable for discrimination cases, as well as other options to deal with a case outside of court such as alternative dispute resolution.
• Asks targeted questions of respondents to assist our consideration.

1.8 In particular, the questionnaire focuses on:

(i) discrimination claims under the Equality Act 2010 generally;

(ii) protected characteristics under the Equality Act 2010; and

(iii) (in particular) disability claims under the Equality Act 2010. 

1.9 Although we have asked some specific questions in relation to disability claims in this Call for Evidence, the Government remains mindful of impacts on other protected characteristics^{[footnote 3]}. Most of these claims will fall to be determined in the county court, but some may be appropriate for the High Court. This Call for Evidence is not directly concerned with tribunal cases, where different rules apply.

2. Next Steps

2.1 This Call for Evidence will run for three months, from 27 November 2024 to 19 February 2025.

2.2 The Government will carefully consider the responses received. Following this, a decision will be taken on whether some form of costs protection should be extended to discrimination claims, or whether another method should be adopted, and (if it is necessary to make a change) to which categories of claim any extension should apply. It may be that it is appropriate to pilot a new regime on disability claims in the first instance. It is possible that, depending on the data and evidence that is received in this Call for Evidence, no decision will be taken to extend costs protection to discrimination claims, provided that the impacts of taking this decision have been properly considered. This will be dependent on the analysis of the responses to this Call for Evidence.

2.3 A response to this Call for Evidence will be published in due course.

Background

1. Legal costs: general position

1.1 The general position in civil litigation in England and Wales is that the loser pays the winner’s legal costs (base fees) as well as the loser’s own. This is a long-standing principle which seeks to ensure that the winner’s legal costs are reimbursed, and that unmeritorious litigation is discouraged. Generally, in civil litigation, there are two sets of costs: the party’s own costs, and the other side’s costs (‘adverse costs’). The issue of what these costs are and who pays them has developed considerably over the past 30 years.

2. The current position in respect of discrimination cases

2.1 Following the LASPO Act 2012, civil legal aid is only available for specific cases listed in LASPO. Prior to LASPO it was generally available, subject to certain exclusions. In Schedule 1 to LASPO^{[footnote 4]}, at paragraph 43, claims under the Equality Act 2010 are listed as being in scope, subject to certain exceptions. The cases that are in scope are subject to means assessment.

2.2 ‘No win, no fee’ Conditional Fee Agreements (CFAs) are available in discrimination claims, as they are for civil cases generally. ‘After the event’ (ATE) insurance is also available to insure against the risk of having to pay adverse costs.

2.3 The current position in respect of CFAs and ATE insurance, following LASPO, is as follows. In a CFA case (which can be taken by claimants or defendants), the lawyer will not generally charge a fee if the case is lost, but if the case succeeds can charge a success fee (e.g., from damages recovered). In addition to this, ATE insurance can be obtained to insure against adverse costs (but the ATE premium is not recoverable; it is paid by successful claimants). If the CFA/ATE funded case succeeds, the CFA/ATE funded party can recover their normal costs in the usual way. If the CFA/ATE funded case fails, the lawyer will generally not charge a fee, and the other side’s costs will be covered by the ATE insurance. This regime enables parties with a good case to litigate without the fear of having to pay potentially ruinous legal costs if their case fails. In this way, ATE insurance can provide costs protection by covering the adverse costs that the client would otherwise have to pay.

2.4 However, the funding of civil litigation is a private market, and the Government seeks details of how it works in practice in discrimination cases. It would be helpful to know how many discrimination cases are funded under CFAs, and how much ATE insurance is available: anecdotal evidence suggests that it may be difficult to obtain ATE insurance cover for these cases^{[footnote 5]}. The Government would welcome evidence on whether this is the case and, if so, why this is the case. The Government is also interested in what difference it would make if the adverse costs of discrimination cases became more certain, for example, by being subject to fixed recoverable costs (as extended from October 2023).

2.5 It is the case, however, that other forms of costs protection exist for other categories of claims, such as Qualified One-Way Costs Shifting (QOCS) for personal injury (PI) claims, which ensures that an unsuccessful claimant will not normally have to pay the defendant’s costs. QOCS was introduced for PI with the rest of the reforms recommended by Lord Justice (Sir Rupert) Jackson in Part 2 of the LASPO reforms in April 2013^{[footnote 6]}. QOCS in PI claims is not subject to means assessment.

2.6 A slightly different form of costs protection is a costs capping regime. One example, currently in the CPR, is the Environmental Costs Protection Regime (ECPR) for certain environmental JRs. The ECPR caps the adverse costs (that a losing party would have to pay to a winning party) for both claimants and defendants, if unsuccessful. The ECPR provides default costs caps of £5,000 for individual claimants, £10,000 for claimant organisations and £35,000 for defendants. These default cost caps can be varied upwards or downwards according to financial means.

3. The Leighton JR and this Call for Evidence

3.1 There is a question, which the Government seeks to explore in this Call for Evidence, as to whether stakeholders consider that a lack of similar forms of costs protection for discrimination claims gives rise to issues in this area (including in respect of the risk of adverse costs). In January 2020, the High Court considered the Leighton JR challenging the apparent decision of the then Lord Chancellor not to extend QOCS to discrimination claims.

3.2 The Ministry of Justice successfully defended the claim, on the basis that the challenge was premature in that a decision had not yet been made on extending QOCS (or another form of costs protection) to discrimination cases, as ‘a decision-making process is underway, but it is only part-way through’ (see paragraph 64 of the judgment). The court found that the defendant had not failed to comply with his public sector equality duty nor had he acted irrationally, and that the present costs regime was not in breach of ECHR articles 6 and 14 nor of the common law right of access to a court.

3.3 This Call for Evidence forms part of that decision-making process. The Government welcomes the input of stakeholders to help establish (i) whether they have any views in relation to access to justice regarding discrimination claims; (ii) whether this is related to adverse costs; (iii) if so, what the appropriate response would be. If it is found that some form of response is needed, further work will be needed on the scope of how such a change might be implemented.

3.4 As set out in the Executive Summary, this Call for Evidence seeks data and evidence on claims related to all nine protected characteristics. It also explores the comparative merits of different costs protection methods (notably ATE insurance, QOCS and costs capping (such as the ECPR model)), as well as possible alternative remedies such as alternative dispute resolution. The questionnaire asks targeted questions about (i) discrimination claims under the Equality Act 2010; (ii) protected characteristics under the Equality Act 2010; and (iii) disability claims under the Equality Act 2010 (which we recognise is a particular concern of stakeholders). The Government remains mindful, however, of the impacts for other protected characteristics, as reflected by the questionnaire and the data and evidence requested.

3.5 It is hoped that this Call for Evidence will provide Government with a more in-depth understanding of available data on discrimination claims. We would like to thank stakeholders for their participation in this exercise.

Data and evidence requested

1.1 The Government does not as yet consider that it possesses sufficient data or evidence to enable it to make a decision on whether costs protection should be extended to discrimination claims and, if so, in which format. We invite those with experience and understanding of discrimination claims (as claimants and defendants) to supply us with data and evidence to help us understand whether action should be taken. We want to understand whether stakeholders consider there are access to justice concerns regarding discrimination claims, and if so, what this relates to (whether fear of adverse costs or otherwise).

1.2 The Government possesses limited data in respect of these categories of claim, which makes it difficult to assess whether there is an access to justice issue. It would be helpful if stakeholders, who may possess more data, could provide this to assist our decision-making.  We are interested in collecting data and evidence in respect of all nine protected characteristics.

1.3 NB: Please indicate if you wish your responses to remain confidential in our analysis and response to this Call for Evidence.

1.4 We welcome data and evidence from respondents on the following topics:

• Further evidence on the following factors in respect of discrimination claims under the Equality Act 2010, for all protected characteristics:

  • Types of claim/claimant
  • Types of defendant
  • How a claim was funded, and what remedy was sought
  • The complexity of the claim
  • Success rates (including outcome and e.g., what damages were awarded)
  • Level of costs, broken down (i) by stage and (ii) by which party had to pay them
• Are you able to obtain ATE insurance cover? Please provide evidence or further details
• Statistical evidence on discrimination claims under the Equality Act 2010 which could not be brought under the current costs regime in the CPR
• Further evidence of why a claim could not be brought. Was this due to fear of adverse costs, or another reason? Although statistical/quantitative data would be more useful in terms of building up a picture of these categories of claim, we will also accept qualitative evidence
• Do you possess evidence that there is more of an issue in respect of access to justice for one protected characteristic than another?

Potential models of costs protection

1. Overview

1.1 If the Government assesses that there is a costs-related access to justice issue for discrimination claims, the next step would be to consider which forms of costs protection might be most appropriate. This section of the Call for Evidence considers the existing provision of After the Event (ATE) insurance (which is available for discrimination cases under the current costs regime), as well as both Qualified One-Way Costs Shifting (QOCS) and the Environmental Costs Protection Regime (ECPR) model, which could, in theory, be applied to applicable discrimination cases. NB, forms of costs protection might appear appropriate, but they are not necessarily the only answer: another option could be dealing with a case outside of court (for example by alternative dispute resolution, as explored in the next chapter of this Call for Evidence).

2. After the Event (ATE) Insurance

2.1 ATE insurance is available in discrimination cases to insure against the risk of having to pay adverse costs. The arrangements that are currently in place in respect of ATE insurance for discrimination cases are set out in paragraphs 2.2 and 2.3 of the Background.

2.2 ATE insurance is a private market. To help assess how well the current costs regime is operating, the Government is interested in the views and experience of stakeholders as to whether it is possible to obtain ATE insurance cover for these cases.

3. Qualified One-Way Costs Shifting (QOCS)

3.1 Qualified One-Way Costs Shifting (QOCS) is a form of costs protection for personal injury (PI) cases which means an unsuccessful claimant does not normally have to pay a defendant’s costs. It was introduced in 2013, as part of the suite of reforms in Part 2 of the LASPO Act.

3.2 QOCS was originally implemented to enable the end of recoverable ATE premiums (a key component of the LASPO reforms). It was first proposed by Sir Rupert Jackson in his 2010 Review of Civil Litigation Costs: Final Report^{[footnote 7]}. Building on the costs protection that exists in legal aid, QOCS affords costs protection to claimants such that if they lose their case, they do not have to pay adverse costs. This protection is qualified in that it can be lost on the grounds of poor conduct (e.g., if the claimant is fundamentally dishonest) and is subject to the CPR Part 36 arrangements (offers to settle). QOCS was originally put forward on the basis that it could be subject to the claimant’s means, but this was found to be impracticable in PI cases – so QOCS as implemented is not subject to a party’s means.

3.3 The Post-Implementation Review (PIR) of Part 2 of LASPO found that QOCS was ‘generally working well’ (para 160).

3.4In his report of November 2012, Sir Brian Leveson recommended that ‘QOCS be [further] introduced for defamation, privacy, breach of confidence and similar media related litigation as proposed by Lord Justice Jackson’ (at Chapter 3, para 6.10)^{[footnote 8]}. The Government developed these proposals further and consulted on draft rules between September and November 2013. For various reasons, it took some time to respond to that consultation, but the Government response was published in November 2018. Although there was some agreement about the case for reform, concerns were raised in respect of further implementing the QOCS model: (i) that QOCS was overly complicated – particularly in relation to means assessment – and would give rise to satellite litigation; and (ii) that more speculative and trivial cases might be brought.

3.5 As such, QOCS was not implemented for defamation and related cases, and separate amendments were made to section 44 of the LASPO Act in relation to defamation cases to ensure appropriate access to justice.

3.6 While the Leighton judgment focuses on QOCS, the Government wishes to gather broader views on whether any form of costs protection would be appropriate for discrimination cases. We therefore welcome views on costs protection of any type.

4. Other forms of costs protection: costs capping

4.1 If costs protection is to be extended to other types of claim, including discrimination cases, one possible option would be some form of costs capping regime, based on a version of the Environmental Costs Protection Regime (ECPR) that is currently in the Civil Procedure Rules (CPR). The ECPR provides default costs caps for claimants and defendants, and a mechanism for varying them depending on means.

4.2 The ECPR caps the adverse costs (that a losing party would have to pay to a winning party) for both claimants and defendants, if unsuccessful. The ECPR provides default costs caps of £5,000 for individual claimants, £10,000 for claimant organisations and £35,000 for defendants. These default cost caps can be varied upwards or downwards according to financial means.

4.3 The Government is interested in views as to whether a costs capping regime would be appropriate for discrimination cases, assuming that it can be established that there is an access to justice issue which requires addressing. We would welcome views on this proposal, or other suggestions for costs measures that might be helpful in addressing any access to justice issues for discrimination cases.

4.4 We are also interested to hear from respondents as to whether any safeguards or additional measures need to be put in place to ensure that, so far as possible, appropriate cases are brought and unmeritorious claims are discouraged. A key tenet of the existing costs regime is that unmeritorious claims are generally discouraged. It would be helpful, for example, to hear from respondents as to whether there should be any process changes (such as approval by a judge) or additional criteria that might need to be met before any costs protection can be granted.

Other options

1. Overview

1.1 As set out in the previous section, the Government is keen to explore other options that might be able to improve access to justice issues around discrimination claims beyond costs protection. The Government is of the view that this issue does not need to be considered in a narrow manner. There may be other options that could make a difference, in ensuring that (i) more meritorious claims are resolved effectively, while (ii) discouraging weaker and vexatious claims from being brought.

2. Alternative Dispute Resolution

2.1 Alternative dispute resolution (ADR) can help resolve civil disputes, including discrimination claims, without needing to go to court. ADR is a way to resolve a disagreement between parties without the case necessarily going before a judge to make a decision. ADR can take place before, or instead of, filing a case with the court; or after a legal case is filed with a court. ADR methods include mediation, conciliation, and early neutral evaluation. Usually, with mediation, conciliation, and neutral evaluation, a neutral third party (who is not the judge in court) assists parties to work towards a settlement that works for both sides, with the parties retaining control of the decision on whether to settle and on what terms. However, in some forms of ADR such as with adjudication or arbitration, the parties agree in advance to task a neutral third party to hear both sides and to make the decision regarding the outcome of the dispute and the parties agree that the decisions is binding on both of them.

2.2 ADR can offer parties to discrimination claims the opportunity to resolve their dispute more quickly than going to court. It also offers more flexible and practical outcomes than available to a court. The parties can reach a settlement based on their interests, such as an apology, rather than having solutions imposed on them by a judge. Mediation in particular can facilitate a resolution of a dispute, for example concerning access requirements where a practical solution may offer more scope than the win/lose resolution in a court hearing.

2.3 The costs of ADR are usually shared by the parties, but these costs may form part of the settlement reached. In some cases, it may be a cheaper alternative for parties than going to a court hearing for a decision. We welcome views on how ADR could help parties resolve a discrimination dispute. We are particularly interested to hear from respondents that have previously used ADR to resolve discrimination claims relating to disability, and particularly where the resolution would not have been available to a court, such as an apology or non-financial restitution. We are interested in suggestions as to how ADR could work more effectively to resolve discrimination claims.

Questionnaire

The Government would welcome responses to the following questions. Where possible, please provide data and evidence to support your answers.

Discrimination claims under the Equality Act 2010

Question 1: Do you consider that there are any obstacles to bringing discrimination claims under the Equality Act (2010)? If so, does this relate to the prospect of adverse costs, or something else?

Question 2: If you have been involved in a discrimination claim, how was this funded? If so, please provide details on the funding method

Protected characteristics under the Equality Act 2010

Question 3: Are any claims related to protected characteristics under the Equality Act disproportionately affected by obstacles or costs issues? If so, how are they affected and why do you consider this may be?

Disability claims under the Equality Act 2010

Question 4: Are there particular obstacles to bringing disability claims under the Equality Act? 

Potential costs protection methods and other remedies

Question 5: How do you consider the extension of fixed recoverable costs (FRC) in civil cases will impact on (a) disability-related discrimination claims or (b) other forms of discrimination claims under the Equality Act?

Question 6: Do you think that some form of costs protection regime should be introduced for (a) disability-related discrimination cases or (b) other forms of discrimination claims under the Equality Act? If so, please provide suggestions as to how this should be designed.

Question 7: Do you think there is a role for alternative dispute resolution in resolving (a) disability-related discrimination claims or (b) other forms of discrimination claims under the Equality Act? If yes, please specify what this role should be.

Question 8: Have you previously used alternative dispute resolution to resolve discrimination claims related to (a) disability discrimination or (b) other forms of discrimination under the Equality Act? If so, and where appropriate, please provide details on the following:

• What was the type of dispute?
• What method of alternative dispute resolution was used to resolve your dispute?
• Were you satisfied with the outcome of the alternative dispute resolution?
• Was the process of alternative dispute resolution helpful in understanding the other party’s position or in narrowing the issues in dispute, even where it did not successfully resolve the dispute?

Question 9: If additional measures are needed to improve obstacles to bringing discrimination claims, what should they be?

Thank you for participating in this Call for Evidence.

Contact details

Please send your response by 19 February 2025 to:

Email: < [email protected]>

Post: Civil Justice and Law Policy

PostPoint 5.25

Ministry of Justice

102 Petty France

London SW1H 9AJ

Complaints or comments

If you have any complaints or comments about the consultation process you should contact the Ministry of Justice at the above address.

Extra copies

Further paper copies of this consultation can be obtained from this address and it is also available on-line at https://consult.justice.gov.uk/.

Alternative format versions of this publication can be requested from: [email protected]

Publication of response

A paper summarising the responses to this Call for Evidence is due to be published in due course. The response paper will be available on-line at https://consult.justice.gov.uk/.

Representative groups

Representative groups are asked to give a summary of the people and organisations they represent when they respond.

Confidentiality

Information provided in response to this consultation, including personal information, may be published or disclosed in accordance with the access to information regimes (these are primarily the Freedom of Information Act 2000 (FOIA), the Data Protection Act 2018 (DPA), the UK General Data Protection Regulation (GDPR) and the Environmental Information Regulations 2004).

If you want the information that you provide to be treated as confidential, please be aware that, under the FOIA, there is a statutory Code of Practice with which public authorities must comply and which deals, amongst other things, with obligations of confidence. In view of this it would be helpful if you could explain to us why you regard the information you have provided as confidential. If we receive a request for disclosure of the information we will take full account of your explanation, but we cannot give an assurance that confidentiality can be maintained in all circumstances. An automatic confidentiality disclaimer generated by your IT system will not, of itself, be regarded as binding on the Ministry.

The Ministry will process your personal data in accordance with the DPA and in the majority of circumstances, this will mean that your personal data will not be disclosed to third parties.

Consultation principles

The principles that Government departments and other public bodies should adopt for engaging stakeholders when developing policy and legislation are set out in the Cabinet Office Consultation Principles 2018 that can be found here:

[https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/691383/Consultation_Principles__1.pdf](https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/691383/Consultation_Principles__1.pdf)

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1. The 2019 PIR of Part 2 of LASPO: Post-Implementation Review of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) (publishing.service.gov.uk). ↩

2. The Leighton judgment: Leighton, R (On the Application Of) v The Lord Chancellor [2020] EWHC 336 (Admin) (19 February 2020) (bailii.org). ↩

3. Discrimination claims relate to the nine protected characteristics laid out in the Equality Act 2010: age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; sexual orientation. ↩

4. Schedule 1 of Part 1 of LASPO: Legal Aid, Sentencing and Punishment of Offenders Act 2012 (legislation.gov.uk). ↩

5. This is also covered at paragraph 4 of the Leighton judgment: “Claimants cannot realistically protect themselves by using ATE insurance, because the cost of the premium will be prohibitive”. ↩

6. The LASPO Act 2012: Legal Aid, Sentencing and Punishment of Offenders Act 2012 (legislation.gov.uk). ↩

7. Sir Rupert Jackson’s Final Report, 2010: Jackson Report 2010 (judiciary.uk). See Chapter 19, p. 190. ↩

8. The Leveson Inquiry - An Inquiry in to the Culture, Practices and Ethics of the Press: www.gov.uk/government/publications/leveson-inquiry-report-into-the-culture-practices-and-ethics-of-the-press ↩