When you’ve suffered a personal injury, deciding which court to bring your claim in is a critical step. Commencing proceedings in a higher court than necessary can have significant financial consequences. A recent High Court judgment has provided welcome clarity on “differential costs orders,” a legal tool designed to address this very issue. Understanding these orders is crucial for anyone pursuing a personal injury claim.
This article breaks down what differential costs orders are, why they matter, and what the latest court guidance means for your claim.
Understanding Differential Costs Orders
Simply put, a differential costs order is a financial penalty imposed on a claimant who brings their case in a higher court (like the High Court) but receives an award of damages that falls within the jurisdiction of a lower court (like the Circuit Court).
Section 17(5) of the Courts Act 1981 gives judges the power to order the claimant to pay the difference between the legal costs incurred by the defendant in the higher court and the costs that would have been incurred in the appropriate lower court. This provision was introduced to discourage claimants from unnecessarily starting proceedings in the High Court, which is a more expensive forum. It aims to create a fairer system and incentivise claimants to choose the correct and most cost-effective court from the outset.
When Can a Differential Costs Order Be Made?
The recent High Court case of Martina Quinlan v Michael Quinlan [2025] IEHC 170 provides a clear framework for when these orders might be applied. In this case, the plaintiff was awarded €25,000 in damages for personal injuries—a sum well within the Circuit Court’s jurisdiction, despite the case being heard in the High Court. This triggered the defendant’s application for a differential costs order.
After reviewing previous case law, Ms Justice Emily Egan outlined eight key principles that guide a judge’s decision. For claimants, these principles are essential to understand.
Key Principles for Claimants
- The Trigger: An award of damages that could have been made by a lower court automatically gives the judge the discretion to make a differential costs order.
- A Weighty Factor: If the damages awarded are significantly within the lower court’s jurisdiction, it becomes a strong reason for the judge to grant the order. However, if the award is only marginally inside the lower court’s limit, or if unexpected issues arise during the trial, the judge might decide against it.
- Justification is Key: The court will examine whether there was a realistic reason for starting the case in the High Court. If there was no solid justification, a differential costs order is very likely.
- Ongoing Assessment: It’s not just about where the case started. The court will also consider if it was appropriate to continue the proceedings in the higher court at every stage.
- The Warning Letter: A differential costs order is much harder to avoid if the defendant formally warned you in advance that they would seek one. The timing of this warning is also crucial. A warning sent months before the trial carries more weight.
- No Obligation on the Defendant: A defendant doesn’t have to apply to move the case to a lower court to be able to seek a differential costs order later. The responsibility rests with the claimant to choose the right court.
- All Circumstances Matter: The court will look at the entire context of the case before making a final decision.
The Quinlan Case: A Practical Example
In the Quinlan case, the Court found it was initially reasonable for the plaintiff to start her case in the High Court. However, circumstances changed. The defendant sent a warning letter about costs just over three weeks before the hearing. At this point, it became clear the plaintiff couldn’t produce the necessary medical evidence to justify a High Court-level award.
Ms Justice Egan ruled that upon receiving that letter, the plaintiff should have applied to adjourn the hearing and move the case to the Circuit Court. Because she didn’t, a differential costs order was made against her. This decision highlights how important it is for claimants and their legal teams to continuously reassess their case strategy.
What This Means for Your Personal Injury Claim
The principles from the Quinlan judgment offer practical lessons for anyone making a personal injury claim:
- Choose the Right Court: It is vital to make a realistic assessment of your potential damages from the very beginning to ensure your case is filed in the appropriate court. Overestimating your claim can lead to costly penalties.
- Heed the Warnings: If the other side sends a letter warning of a potential differential costs application, take it seriously. It is a clear signal that they believe your case is in the wrong court.
- Be Adaptable: The value and strength of your case can change over time. You must be prepared to re-evaluate and, if necessary, take steps to move your case to a lower court to avoid a negative costs order.
Navigating the legal system is complex, and the risk of a differential costs order adds another layer of consideration for claimants. It underscores the need for expert legal advice to ensure your claim is handled correctly and efficiently from start to finish.
Navigating Your Claim with Confidence
Pursuing a personal injury claim can be a daunting process, filled with legal complexities that can be difficult to manage alone. Understanding concepts like differential costs orders is crucial to protecting your interests and achieving a fair outcome.
At HOMS Assist, our experienced personal injury solicitors are here to guide you with empathy and expertise. We ensure your case is managed effectively, helping you make informed decisions every step of the way. If you have been injured and are considering making a claim, contact us for clear, professional advice you can trust.
