England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
CHANCERY DIVISION
ON APPEAL FROM THE WHITEHAVEN COUNTY COURT
(Deputy Judge Townend)

		The Royal Courts of Justice The Strand London Tuesday 2 October 2001

Tuesday 2 October 2001

1. LORD JUSTICE MANTELL: This is a renewed oral application for permission to appeal arising out of a running-down action which was heard on 26 July 2001 before His Honour Deputy Judge Townend in the Carlisle County Court.
2. The facts of the accident which gave rise to the claim are unimportant in the context of this application. It is sufficient to say that there was a collision between two motorcars which were being driven towards one another along a very narrow and winding lane in Cumbria. The immediate cause of the accident, as found by the judge eventually on the question of liability, was the fact that that the defendant was driving his car at too great a speed for the conditions and had succumbed to a skid immediately before the two vehicles collided.
3. The matter came on for trial on the issue of liability only. There had been no agreement at that stage (and, as I understand it, there still is no agreement) as to the value of the claimant's claim. Suffice it to say that, having heard the evidence, the learned deputy judge found for the claimant without attributing any blame to her whatsoever. It then emerged that, prior to trial, there had been a Part 36 offer. The offer was on the basis that the claimant would accept that she had been 5 per cent to blame for the accident. The defendant, no doubt on advice, refused that offer.
4. But the fact that the offer had been made gave rise to an interesting argument as to costs and as to the manner in which the judge ought to apply Part 36.21 of the rules of court, which requires the judge to order indemnity costs where an offer has been made and the party making the offer secures a result which is more advantageous to him or her than was contained in that offer. That is subject to the judge having regard to the justice of such an order, in connection with which he must have reference to 36.21(5), which sets out four matters which would appear to be relevant, including the terms of any Part 36 offer made. Here the learned judge took the view that the offer was little more than a sham. He considered that it was not something that a defendant should be required to respond to as a genuine attempt to compromise the action, and on that basis he exercised his discretion not to order indemnity costs but rather ordered costs on the usual basis.
5. When the matter came before me as a paper application I refused it, giving the following reasons:

"Once the judge had taken the view that the Part 36 offer was not a genuine attempt to settle the action he was within the bounds of his discretion in refusing to order indemnity costs. The judgment of this Court in McPhilemy v Times Newspapers Ltd & others (4) ... [that was an authority which counsel had mentioned in his skeleton argument] was concerned with a judge's misapprehension as to the nature of indemnity costs and has no bearing upon the question raised in the proposed appeal."

6. I have listened, I hope with care, to the submissions that Mr Waldron has so ably presented on this renewed application. I am not persuaded, in considering the likely outcome of any appeal, that my tentative view was wrong. It continues to seem to me that in cases of this sort, particularly where there is a claim for unquantified damages, an offer on the basis of 95 (or 96 or 97) per cent liability is entirely unrealistic and the judge was entitled to view it in the manner which he did. However, Mr Waldron tells me that the application of the rules of court, and particularly these provisions to which reference has been made, is causing a certain difficulty among practitioners; and he tells me, and I unhesitatingly accept, that in many cases leading counsel experienced in this field are advising claimants to protect themselves by making an offer to settle on the basis even of 99.9 per cent liability falling upon the defendants.
7. That being so, I am persuaded that there is another reason, apart from the prospects or lack of prospects of success, for this matter going forward for consideration by the full court, and for that reason I am prepared to grant permission.
ORDER: Application allowed. Appeal to be listed before three Lord Justices with a time estimate of half a day excluding judgment. Costs in the appeal. (Order not part of approved judgment)