CLINICAL NEGLIGENCE CASE WHERE CLAIMANT OFFERED TO ACCEPT 90% OF DAMAGES WAS A VALID PART 36 OFFER: IT WAS NOT UNJUST FOR THE DEFENDANT TO FACE THE CONSEQUENCES

In Chapman v Mid and South Essex NHS Foundation Trust (Re Costs) [2023] EWHC 1871 (KB) Mrs Justice Hill decided that a claimant’s offer to accept 90% of damages in a clinical negligence case, where there had been a trial on liability,  was a valid Part 36 offer.  Further it was not unjust for the defendant to face the usual Part 36 consequences.

THE CASE

The claimant had succeeded at trial in a clinical negligence case. There had been a split trial with liability  to be tried as a preliminary issue. Prior to trial the claimant had made a Part 36 offer to accept 90% of damages. The defendant sought clarification of the offer and this was provided. The claimant obtained an order for 100% of damages at trial. The issue arose as to whether the claimant’s offer was a valid one.  The judge held that it was a valid Part 36 offer, on the facts of this case.  Further it was not “unjust” for the defendant to face the normal Part 36 consequences.

 

THE JUDGMENT ON PART 36

The judge considered whether the offer of 90% was a valid Part 36 offer.

The appropriate costs order in relation to the period after 13 January 2023
(i): The legal framework
    1. The relevant provisions are set out in CPR 36.17 which provides in material part as follows:
Costs consequences following judgment
36.17
(1) Subject to rule 36.21, this rule applies where upon judgment being entered –
(a) a claimant fails to obtain a judgment more advantageous than a defendant’s Part 36 offer; or
(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant’s Part 36 offer…
(2) For the purposes of paragraph (1), 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.
(3) Subject to paragraphs (7) and (8), where paragraph (1)(a) applies, the court must, unless it considers it unjust to do so, order that the defendant is entitled to—
(a) costs (including any recoverable pre-action costs) from the date on which the relevant period expired; and
(b) interest on those costs.
(4) Subject to paragraph (7), where paragraph (1)(b) applies, the court must, unless it considers it unjust to do so, order that the claimant is entitled to—
(a) interest on the whole or part of any sum of money (excluding interest) awarded, at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;
(b) costs (including any recoverable pre-action costs) on the indemnity basis from the date on which the relevant period expired;
(c) interest on those costs at a rate not exceeding 10% above base rate; and
(d) provided that the case has been decided and there has not been a previous order under this sub-paragraph, an additional amount, which shall not exceed £75,000, calculated by applying the prescribed percentage set out below to an amount which is—
(i) the sum awarded to the claimant by the court; or
(ii) where there is no monetary award, the sum awarded to the claimant by the court in respect of costs—
Amount awarded by the court Prescribed percentage
Up to £500,000 10% of the amount awarded
Above £500,000 10% of the first £500,000 and (subject to the limit of £75,000) 5% of any amount above that figure.
(5) In considering whether it would be unjust to make the orders referred to in paragraphs (3) and (4), the court must take into account all the circumstances of the case including—
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made;
(d) the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated; and
(e) whether the offer was a genuine attempt to settle the proceedings.
(6) Where the court awards interest under this rule and also awards interest on the same sum and for the same period under any other power, the total rate of interest must not exceed 10% above base rate.”
(ii): The nature of the Claimant’s 22 December 2022 offer
    1. The Claimant’s 22 December 2022 offer to settle her claim was described in the letter from her solicitor as follows: “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”.
    1. The Defendant sought clarification of the offer. This was arguably unnecessary. The letter could only have been understood as offering to settle the full value of the pleaded breach and causation case against this defendant. Further, the Amended Particulars of Claim at [68] and [70] made clear that the Claimant’s case as to the likely outcome but for the alleged negligence in relation to both elements of the claim was essentially the same, namely that with timely intervention she would have been neurologically normal albeit with her ongoing lower back pain caused by the spondylolisthesis.
    1. The Claimant’s solicitor nevertheless clarified the position in correspondence as follows:
“Insofar as there is a material distinction between the outcomes based on the causation cases against your client as set out at paragraph 67 to 68 and 69 to 70 of the Particulars of Claim, which is not admitted, for the avoidance of doubt this offer is based on the causation case against your client which is set out at paragraph 67 to 68 of the Amended Particulars of Claim (diagnosis in 2009/10)”.
    1. The liability judgment found at [189]-[190] that had surgery been performed in 2010, as it would have been absent Dr Bopitiya’s breach of duty, the Claimant would have enjoyed a full neurological recovery, with normal bladder, bowel and sexual function, but persisting pain and disability arising from her spondylolisthesis. This is clearly more favourable to the Claimant than her offer. She has succeeded fully on her causation case as pleaded.
(iii): Was the Claimant’s offer an effective one for Part 36 purposes?
    1. Mr Post submitted that the Claimant’s 22 December 2022 offer to settle her claim for 90% of damages, assessed on a 100% liability basis, was not an effective Part 36 offer. He relied on the recent judgement of Collins Rice J in Mundy v TUI UK Ltd [2023] EWHC 385 (Ch); [2023] Costs LR 153. He contended that she had held at [36]-[42] that an offer in this form is not an offer to settle the claim or a quantifiable part of or issue in the claim and that therefore CPR 36.17 and the adverse Part 36 costs consequences should not apply. He submitted that there was no realistic possibility of a split liability order in this case because the Defendant’s contributory negligence argument was not potentially effective in relation to the claim against Dr Bopitiya, for the reasons identified in the liability judgment at [198].
    1. However, the factual context of Mundy is important. This was that the Claimant had made two separate Part 36 offers (one based on a 90/10 liability split and one to accept £20,000 pounds in settlement of the claim) and the Defendant had made a Part 36 offer of £4000 in full settlement. The Claimant was ultimately awarded £3,805.60 but nevertheless argued that the judgment was at least as advantageous to him as the proposals in his 90/10 offer: [1] and [6]-[8]. At [32], Collins Rice J identified a “particular difficulty” with the Claimant’s position, namely that it seemed to:
“…cut across the binary structure of CPR 36.17(1) by contemplating a situation in which the answer to both limbs could be “yes”: A claimant can have failed to beat a defendant’s money offer, but still have beaten or equalled his own liability offer. That raises the problematic prospect of subsections (3) and (4) both applying in circumstances where it is far from obvious that this is in the contemplation of the rule at all”.
    1. While Collins Rice J did discuss 90/10 liability offers in general terms at [36]-[42], I do not understand her judgment as purporting to hold that Part 36 consequences cannot flow from such offers made in different factual circumstances from those before her, and any such finding would be obiter in any event. Collins Rice J’s analysis was based on the difficulty of comparing monetary offers with liability offers of this kind. While such a difficulty may arise in claims such as Mundy where liability and quantum issues are tried together and both liability and monetary offers have been made, the analysis does not apply in this case given that a split liability trial had been ordered and the only substantive offer made by either party was the Claimant’s 90/10 liability split offer.
    1. Further, in Mundy at [36], Collins Rice J appeared to acknowledge that a 90/10 liability offer could be effective in cases where there was a “genuine question of issues-based liability”. There was, until judgment, a genuine prospect of a finding on split liability as between the parties in this case. I did not find that the contributory negligence argument in relation to the Dr Bopitiya claim was one that did not have “the slightest prospect of success” as in Mundy at [11]. Although Mr Post now advances that contention, the Defendant had maintained this allegation at trial and my rejection of it was based on my decision as to the point at which the Claimant would have undergone surgery but for Dr Bopitiya’s negligence, all matters that were heavily contested by the Defendant at trial.
    1. In any event, Mundy is distinguishable from this case because the manner in which the Claimant’s 90/10 offer applied to the causation issue had been made clear in correspondence and was reflected in the liability judgment.
  1. For these reasons I do not accept that the reasoning in Mundy is applicable here. In my judgment the Claimant’s 22 December 2022 offer was a valid one for Part 36 purposes.

 

WAS IT “UNJUST” FOR THE PART 36 CONSEQUENCES TO APPLY?

The judge then considered whether it was “unjust” for the normal Part 36 consequences to apply.

(iv): Would it be unjust for Part 36 consequences to flow from the Part 36 offer?
    1. The Claimant has obtained judgment against the Defendant that is “at least as advantageous” to her as the proposals contained in her Part 36 offer for the reasons given at [23]-[26] above.
    1. It follows that the next issue is whether it would be “unjust” to make those orders referred to in CPR 36.17(3) and (4) that are applicable at this stage (where there has not yet been a determination of the sum of damages to be awarded to the Claimant, so that CPR 36.17(4)(a) and (d) do not apply). Regard must be had to the factors in CPR 36.17(5).
    1. As the Court of Appeal made clear in Webb at [38]:
“…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”.
    1. Further, the Court continued at [38] by emphasising that the burden of showing injustice is a “formidable obstacle to the obtaining of a different costs order. If it 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.” As Collins Rice J noted in Mundy at [44], “[t]he “unjust” bar…remains a high one”.
    1. None of the specific factors set out in CPR 36.17(5) are particularly relevant here. However Mr Post relied on the following, effectively as part of “all the circumstances of the case”: (i) the very serious nature of the allegations made against ENP Nice; (ii) the fact that they had been dismissed after trial and she had been vindicated; and (iii) the fact that acceptance of the Claimant’s offer would have prevented any determination of the allegations, such that it was reasonable and proper for the Defendant to fight the case at trial rather than to accept the offer.
    1. I do not consider that these points meet the formidable and high threshold for “unjust”, essentially for the reasons given by Ms Beale. The Defendant could have avoided the matter going to trial and the allegations against ENP Nice being ventilated in public by making appropriate admissions as to Dr Bopitiya’s negligence or accepting the offer explicitly in respect of the allegations against him, which was in fact the way it had been clarified in correspondence.
  1. Mr Post contended that if CPR 36.17(4)(c) was engaged, the appropriate rate should be 2% over the base rate. Ms Beale submitted that the rapid recent rise in interest rates which has necessitated regular increases in the special account rate and the Defendant’s failure to engage in ADR meant that the maximum increase of 10% was appropriate. I accept the first of these submissions but not the second for the reasons given at [18] above. In my judgment the appropriate rate would be 5% over the base rate.