Ben Rodgers on Part 36 Update

“It is a sad fact that the provisions of Part 36, intended to promote the settlement of litigation, and thus to minimise costs, have themselves been productive of numerous appeals to this Court, and in consequence substantial costs in what is effectively satellite litigation. This is presumably because Part 36 is highly prescriptive (so that even experienced lawyers may fail to make a compliant offer) and the financial consequences of the application of the provisions of Part 36, or the failure to comply with the requirements of Part 36, may be substantial.”

So said Sir Stanley Burnton in Webb v. Liverpool Women’s NHSFT [2016] EWCA Civ 365, an interesting (probably not more than that) decision handed down today.

The Claimant claimed damages for shoulder dystocia suffered during her birth at the Defendant’s hospital. Her claim came down to two allegations: (1) she should have been born by caesarean rather than vaginally; and (2) the vaginal delivery was done negligently by the midwives.

Four weeks before the liability trial the parties had a JSM. The Defendant offered 30%. The Claimant offered 65%, which she put into a Part 36 offer the same day. The Defendant rejected the Claimant’s offer and repeated its offer of 30%.

The trial lasted 5 days and the reserved judgment, handed down 3 months later, was 60 pages long. The Claimant won on issue (1) and lost on issue (2). So she obtained judgment for 100% of her damages, to be assessed. She asked for her costs, since she had offered 65% and had plainly beaten it.

The trial judge instead made an issue-based costs order, since the Claimant had failed on issue (2). He ordered the Defendant to pay 75% of the Claimant’s time costs, and none of the expert fees relating to issue (2); plus Part 36 enhancements on costs and damages. This meant that the Claimant would only recover 75% of her time costs, past and future – including the assessment of damages. Despite having gone to trial and beaten her own offer.

The Court of Appeal held this was wrong. The Claimant got 100% of her costs, plus Part 36 enhancements on costs and damages from the relevant date. Reasons:

• It is not unusual for a claimant to succeed on some, but not all, allegations, particularly in a personal injury case.
• It is a fortunate litigant who wins on every point.
• The Claimant had not pursued issue (2) unreasonably. If the judge had thought so he would have said in the 60-page judgment.
• So the Part 44 discretion could not properly have been exercised against the Claimant.
• After the last date for accepting the Claimant’s offer, the maxim is “Part 36 trumps Part 44”.
• Although Part 36 does not preclude the making of an issue-based or proportionate costs order, a successful claimant is to be deprived of all or part of her costs only if the court considers that would be unjust for her to be awarded all or that part of her costs.
• It was not unjust for her to be awarded all her costs. It could not be said that it had been unreasonable for the Claimant to make and to pursue issue (2), which was supported by her expert evidence.

Learning point: it is a bit unfair to a busy circuit judge to give him or her, at a handing-down hearing, only 30 minutes to deal with disputed issues of costs, interim payments, permission to instruct further medical experts, updated costs budgets and permission to appeal – something’s bound to go wrong!