section image

The Dekagram: 31st July 2023

Articles, News | Mon 31st Jul, 2023

This week we bring you a Dekagram all about costs recoverability, in the contexts of Part 36 and of summary judgment and strike out. The cases on split liability offers just keep coming, with the decision in Mundy v TUI [2023] EWHC 385 (Ch) seeming increasingly out of step with the rest of the caselaw in this area. Meanwhile, Choudhury J has warned judges against using Part 3.4 to get around the rules on qualified one way costs shifting. And the Civil Aviation Authority seems to have reached a resolution in its long running enforcement action against Wizz Air; it has accepted undertakings that the airline will honour its refund commitments in future, automatically review all passenger welfare claims received over the last 16 months, and to re-open passenger welfare claims going back six years. It might even start paying the legion County Court judgments against it.

Issue-based Part 36 Offers on Liability, and the Justness of Part 36 Consequences

Last month we wrote about judicial scrutiny of Part 36 offers (see Linda Nelson on Genuine and Sham Liability Settlement Offers – a Guide here. In the recent case of Chapman v Mid and South Essex NHS Foundation Trust [2023] EWHC 1871 (KB) at the conclusion of the liability half of a liability/quantum split trial Hill J examined the effect of a non-monetary Part 36 offer, and upheld the validity of the offer.

As a reminder, Part 36.17(2) provides that:

“for the purposes of [determining whether an offer has been beaten] in relation to any money claim or money element of a claim, “”more advantageous” means better in money terms by any amount, however small, and “at least as advantageous” shall be construed accordingly.”

The Claimant had made a Part 36 offer described by her solicitor in the following terms:  

“an offer to settle the liability and causation issues in this action for 90% of damages assessed on a 100% liability basis, that is with a deduction of 10% from the full value of the claim”.

The Defendant had sought clarification of the offer, but Hill J considered it had not been necessary to do so as “the letter could only have been understood as offering to settle the full value of the pleaded breach and causation case against this defendant.”. In the event, the Claimant succeeded fully on her causation case as pleaded.

The Defendant argued that the Part 36 offer had not been effective on the basis that it was “not an offer to settle the claim or a quantifiable part of or issue in the claim”. In relation to the judgement of Collins Rice J in Mundy v TUI UK Ltd [2023] EWHC 385 (Ch), discussed in our aforementioned article, the court noted that whilst there may be difficulty in cases where liability and quantum issues are live (though not necessarily where there was a genuine question of issues-based liability), the offer in the present case was a valid one because there had been a genuine prospect of a finding on split liability as between the parties in this case; the Defendant had pleaded contributory negligence (the Claimant had refused to call an ambulance on the advice of her GP, many years after the Defendant Pain Consultant’s negligence in failing to order an MRI scan of the Claimant and to detect a thoracic disc prolapse, inter alia, which was argued to have contributed to her injury), and Hill J had not found that this defence did not have “the slightest prospect of success”. The issue had therefore been a live one capable of compromise.

Turning to the next issue of whether it would be unjust for the Part 36 consequences to flow from the offer (per CPR 36.17(4) and (5), albeit as there had yet been no determination of quantum the court considered only paragraph (5)), the court cited the Court of Appeal’s judgment in Webb v Liverpool Women’s Hospital NHS Foundation Trust [2016] EWCA (Civ) 365that

“…a successful claimant is to be deprived all or part of her costs only if the court considers that it would be unjust for her to be awarded all or that part of her costs. That decision falls to be made having regard to “all the circumstances of the case”. In exercising its discretion, the court must take into account the fact that the unsuccessful defendant could have avoided the cost of the trial if it had accepted the claimant’s Part 36 offer as it could and should have done”.”

The Court of Appeal in Webb had gone on to emphasise that the burden of showing injustice is a formidable obstacle to the obtaining of a different costs order, and that if this were not so, then the salutary purpose of Part 36 in promoting compromise and the avoidance of unnecessary expenditure of costs and court time, would be undermined.

The Defendant argued that in “all the circumstances of the case” it would be unjust to allow the usual Part 36 consequences because allegations of negligence had also been made against a nurse, but Hill J found that the point did not meet the high threshold for “unjust”. The Defendant could have simply avoided going to trial on liability by accepting the offer, or by making appropriate admissions of negligence on the part of the consultant.

Analysis

It is often prudent, although sometimes done on reflex, for defendants to plead contributory negligence as a partial defence and to persist with the point to trial. The decision to do so can necessitate a considerable amount of work on that issue, and there is a sound basis for incentivising parties to litigation to compromise it in order to save costs and court time.

As Linda noted in her recent article, an offer to settle the issue of liability on a 100% basis is unlikely to be recognised as a genuine offer of settlement, but offers on a 99.7%, 96%, 95% and 90% basis have all been recognised as valid offers in recent years. Claimant solicitors should carefully consider whether liability offers can be utilised in every claim where the issue of liability is not conceded. Where such offers are made, defendant solicitors should weigh the benefits of a denial or non-admission where significant additional costs may be recovered on the indemnity basis.

About the Author

Called in 2011, prior to pupillage Conor Kennedy spent two years working with a leading insurance law firm, gaining experience across regulatory, employment, leisure, travel and public sector teams. He has a varied civil practice and is accredited for Direct Access instruction, but has a particular interest and expertise in claims involving fundamental dishonesty.

Strike Out or Summary Judgment – what Difference Does it Make?

A claim may be struck out under CPR r.3.4(2)(a) if there were no reasonable grounds for bringing it.  A claim may be summarily dismissed under r.24.2 if its prospects of success are no better than fanciful.  In most litigation, it makes no difference to the defendant whether the claim is struck out or summary judgment given.  In personal injuries litigation however, a defendant has a strong incentive to favour strike out, because of QOCS.

The recent judgment of Choudhury J in Kasongo v. Transport for London and ano’r [2023] EWHC 1464 (KB) warns judges, for the first time, not to confuse strike out with summary judgment.

The Claimant was a security guard.  In his workplace there was a loading bay which was divided in two by a knee-height crash barrier.  A delivery of scaffolding poles arrived.  The Claimant went to retrieve the delivery note.  He stepped over the crash barrier, caught his trailing leg on it, fell over the poles and wrenched his knee.

The Claimant sued his employer and his employer’s landlord, alleging that whoever left the poles on the floor was in breach of their duty under the Occupier’s Liability Act 1957.  He failed to allege that he held the employer liable for breach of the obligations owed by an employer to its employee.  The employer denied liability on the basis that the accident happened on the landlord’s retained premises.  The landlord denied liability on the basis that the scaffolding poles belonged to the employer.

After both Defendants had served their defences, the employer served CCTV which clearly showed the accident.  The employer believed that the CCTV showed the Claimant fell because he caught his trailing leg on the crash barrier, such that his fall had nothing to do with the scaffolding poles.  They also believed that, since the poles had been on the landlord’s land, and since the Claimant was suing only for breach of duty as occupier (not as employer), they could not possibly be held liable.  They applied to strike out the claim.

The County Court judge agreed that the claim against the employer was hopeless.  He held that the CCTV showed the Claimant tripping over the crash barrier, not the scaffolding poles.  The judge could not see how the claim could succeed against the employer when they were only sued as an occupier of premises and the accident had happened on neighbouring premises.  He struck out the claim, ordering the Claimant to pay £12,500 in costs – an order which was enforceable under CPR r.44.15(a).

On appeal, the Claimant sought to persuade the High Court that a strike out application can go no further than the pleaded case.  If all the elements of a cause of action were present then a claim could not be struck out.  It was illegitimate to look at any evidence.  If one did so then one was ipso facto considering whether or not to give summary judgment.

Choudhury J disagreed.  The statement of case cannot be read in a vacuum.  The assessment may take account of factors known to the Court even if not acknowledged in or obvious on the face of the statement of case.  For example, if a claimant’s statement of case is unambiguously contradicted by a contemporaneous document, such as CCTV, then it might not disclose reasonable grounds for bringing the claim. 

Nevertheless, the circumstances in which the court should look beyond the statement of case in a strike out application are limited.  In this case, the Claimant maintained that the scaffolding poles caused him to fall, by preventing him from regaining his balance by hopping forward once his trailing foot clipped the crash barrier.  The County Court judge held, on the basis of the CCTV, that the Claimant had fallen simply because his foot clipped the crash barrier.  The fact that the County Court judge decided this point against the Claimant did not establish that the statement of case had disclosed no reasonable grounds for bringing the claim in the first place.

Similarly, the County Court judge had been entitled to conclude that the employer was not the occupier, but that did not mean that the statement of case disclosed no reasonable grounds for asserting that it was.

The County Court judge had reached a view on the merits, having reviewed the evidence, an exercise which was appropriate to summary judgment.  He had wrongly applied an approach appropriate for a summary judgment application to a rule 3.4(2)(a) application to strike out.  That was an error of law.

It is clear that there may be an advantage for some defendants in approaching what is really a summary judgment application as a strike out application given the costs consequences under QOCS. In the judgment of Choudhury J, the court should be astute to deal with such applications as applications under Part 24 and not as applications under CPR 3.4.

The County Court judge’s order was set aside and the employer paid the Claimant’s costs of the appeal of over £30,000.

About the Author

Ben Rodgers was called in 2007 and now specialises in personal injury work with an emphasis on accidents abroad, including maritime accidents (he is himself an excellent sailor). He is listed for personal injury in the Legal 500, where he is said to be ‘go-to counsel for complex liability disputes; calm and composed, but will fight ferociously when required.’

Portfolio Builder

Select the practice areas that you would like to download or add to the portfolio

Download    Add to portfolio   
Portfolio
Title Type CV Email

Remove All

Download


Click here to share this shortlist.
(It will expire after 30 days.)