…we do not consider that the well- established jurisdiction to direct set-off of costs against costs under rule 44.12 is displaced by the QOCS scheme, provided that there is an order for damages or interest and that the headroom provided by that order has not been exhausted by other means of enforcement. But for the reasons already given we do not accept the submission that it is only the net costs entitlement that has to be brought into account under rule 44.12(1)
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The defendant was awarded 50% of its costs and sought to set these off against the award of damages.
In determining this issue, HHJ Turner set out the criteria to applied, as identified by Scott LJ in the leading case of Lockley v National Blood Transfusion Service  1 W.L.R. 492
In November last year the Court of Appeal decided that fixed costs continued to apply in a case which started under the RTA Protocol and was settled by way of the acceptance of a Part 36 Offer which referred to CPR 36.13 and offered to pay “costs to be subject to detailed assessment if not agreed”.
As a consequence of that decision the Appellant (original defendant) was awarded her costs of the appeal.
The question to be determined now was whether the court had jurisdiction to set off those costs against the costs owed to the Respondent (original claimant) in the substantive claim.