ON APPEAL FROM QUEENS BENCH DIVISION
MR JUSTICE POPPLEWELL
Strand, London, WC2A 2LL
B e f o r e :
LADY JUSTICE ARDEN
LADY JUSTICE BLACK
|- and -
Mr Ben Browne QC & Mr Roger Harris (instructed by Clyde & Co claims LLP) for the Respondent
Hearing dates : 3rd & 4th July 2012
Crown Copyright ©
Lady Justice Black :
Some further factual background
Medical and other expert opinions
Action by the claimant's advisors
" .though the precise outcome of [the claimant's] brain injury is still somewhat unclear, it seems highly probable that his recovery will be such that the offer of £500,000 considerably overestimates what he would be likely to recover at trial."
The legal principles
(b) a Part 36 offer is accepted after the expiry of the relevant period,
if the parties do not agree the liability for costs, the court will make an order as to costs."
"Where paragraph 4(b) applies, unless the court orders otherwise
(a) the claimant will be entitled to the costs of the proceedings up to the date on which the relevant period expired; and
(b) the offeree will be liable for the offeror's costs for the period from the date of expiry of the relevant period to the date of acceptance."
It thus establishes what might be described as "the normal order" but confers upon the court a discretion to depart from it. It does not provide any guidance as to when the court should do so.
"(1) 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
(2) Subject to paragraph (6), where rule 36.14(1)(a) applies, the court will, unless it considers it unjust to do so, order that the defendant is entitled to
(a) his costs from the date on which the relevant period expired;
(b) interest on those costs.
(4) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3) above, the court will 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; and
(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated."
The purpose of the normal rule in relation to costs following Part 36 offers
How should the court approach the question of whether it is unjust to make the normal order?
The status of the claimant
"Neither [counsel] suggested that any special rule applied to patients, other than that resulting from the need for the Court's approval of any settlement and for its permission to accept the money in court .. In addition, in some cases it will be necessary for those acting for a patient to request additional time to consider a Pt 36 offer and payment into Court beyond the 21 days provided by r 36.11."
"the incidence of costs in the present case is not affected by the fact that the claimant is a patient. In principle, a defendant in proceedings brought on behalf of a patient is entitled to the same costs protection from his Pt 36 offer or payment as a defendant against whom a claim is brought by a competent claimant." (§28)
"I regard this case, so far as principle is concerned, as therefore being no different from the very many cases where a payment into court is made and everyone appreciates that, if the plaintiff succeeds on a particular issue, the payment will be inadequate. Equally, if the plaintiff fails on an issue, the payment will be more than sufficient to meet the claim."
Reasonableness of claimant
The contingencies of litigation
"Essentially, what happened is that events have justified the defendant's assessment of the total value of the claim, and falsified the claimant's assessment. Changes in circumstances between the date of a Pt 36 payment and trial are contingencies inherent in litigation. They cannot of themselves normally justify a conclusion that the defendant should be deprived of the benefit of his payment. It follows that there was no reason to depart from the normal rule."
"37. The result might have been different if the claimant's solicitors had requested, and the defendant's solicitors had refused, a stay until the results of the biopsy were known. But that did not happen."
Popplewell J's judgment
"19. . It seems to me that it would have been difficult for those advising the Claimant at the time of the Part 36 offer to have prepared an advice for approval by the court which expressed the view that at that stage the offer should be accepted if there were a reasonable alternative strategy available of keeping the offer alive and waiting for further investigations. Of course, it might have been that that was regarded as a strategy which itself involved some risks; and in some cases the court might have to decide whether or not to approve a settlement, taking into account those risks. But the validity of the strategy has been proved by subsequent events in that the offer was indeed kept open pending further investigation.
20. It seems to me that this is a case in which I have to balance two competing considerations. On the one hand I am satisfied that the claimant has acted reasonably throughout. On the other hand, the defendant is entitled to invoke the function and purpose of Part 36, as explained in Matthews and above, in treating the uncertainty as to [the claimant's] developing condition and prognosis as simply one of the ordinary contingencies of litigation; and as a contingency the costs risk of which it is the function of Part 36 to cause the claimant to have to bear.
21. Balancing those considerations, I am not satisfied that this is an exceptional case or that it would be unjust for the normal order in relation to costs to be made. Notwithstanding the reasonableness of the claimant's conduct, the defendant is entitled to the normal costs protection of Part 36 where, as in this case, the uncertainties of the prognosis are contingencies which fall within the usual litigation risks of claims of this kind."
The claimant's submissions
The defendant's submissions
"it is important to bear in mind that [the claimant] does have documented damage to the frontal lobes of the brain and is therefore at risk of developing problems as he enters maturity. Currently his behaviour and concentration problems constitute risk indicators of frontal lobe dysfunction which may later further manifest itself in social ineptness and the inability to embrace full independence".
Given material of this sort and given the universal advice that a firm conclusion could not be reached as to whether there would be any long term neuropsychological deficits until the claimant was older, it is not at all surprising that counsel advised that further investigations should be undertaken involving further consultation with the clinical psychologist and the educational psychologist and in relation to epilepsy.
Lady Justice Arden:
Lord Justice Pill:
"5.1 Where a claim by or on behalf of a child or protected party has been dealt with by agreement before the issue of proceedings and only the approval of the court to the agreement is sought, the claim must, in addition to containing the details of the claim, include the following
(6) in a personal injury case arising from an accident
(a) details of the circumstances of the accident,
(b) any medical reports,
(c) where appropriate, a schedule of any past and future expenses and losses claimed and any other relevant information relating to the personal injury as set out in Practice Direction 16, . . .
5.2(1) An opinion on the merits of the settlement or compromise given by counsel or solicitor acting for the child or protected party must, except in very clear cases, be obtained.
(2) A copy of the opinion and, unless the instructions on which it was given are sufficiently set out in it, a copy of the instructions, must be supplied to the court."
The application in this case was appropriately heard by a High Court Judge.
"Before us, neither party submitted that the other had acted unreasonably. Essentially, what has happened is that events have justified the Defendant's assessment of the total value of the claim, and falsified the Claimant's assessment. Changes in circumstances between the date of a Part 36 payment and trial are contingencies inherent in litigation. They cannot of themselves normally justify a conclusion that the defendant should be deprived of the benefit of his payment. It follows that there was no reason to depart from the normal rule."