COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
ANDREW EDIS QC
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE JACKSON
LORD JUSTICE TOMLINSON
| MEDWAY PRIMARY CARE TRUST AND DR ASHIQ HUSSAIN
|- and -
Mr Guy Mansfield QC and Ms Sarah Lambert (instructed by Gadsby Wicks) for the Respondent
Hearing date : 5th May 2011
Crown Copyright ©
President of the Queen's Bench Division
Rules about costs
"I agree with Waller LJ in Straker that one must go to the rules and apply the approach which the rules prescribe.
Thus the first question is to determine which was the unsuccessful party. There may appear to be some difference in the approach of this Court if one compares Painting with Jackson or Hall and I hope I can reconcile those differences. I prefer the approach of Tuckey, Keene and Wilson LJJ in Jackson that the claimant was successful in the sense that he had established a claim for damages and beaten the payment into court. Although it was a case set in a commercial context, Waller LJ was surely right in Straker to endorse Longmore LJ's views that the most important thing is to identify the party who is to pay money to the other even in a case of personal injury. The claimant had to come to court to establish her claim, a genuine claim, because she had suffered an injury through the admitted negligence of the defendant. The judgment in her favour is a vindication of her stance."
Ward LJ's conclusion was:
"Part 36 now also affects a claimant. Whilst not obliged to make a counter-offer, in this day and age of encouraging settlement, claimants who do not do so run the risk that their refusal will impact upon the costs they may otherwise be entitled to recover. Here there was no attempt to negotiate and that counts against the claimant.
Having tried to represent these considerations in a balance sheet, where does the balance lie? I start with the claimant getting her costs because she beat the payment in and was the successful party. That is the starting point. Those costs should not include costs related to Miss Porter's reporting and the costs judge must be directed to exclude those matters. Pursuing her claim in the exaggerated way she did had the result that this became heavily contested litigation whereas it might have settled. The defendant has been put to unnecessary expense. But an order for costs against the claimant is less justified where, as here, the defendant failed to alleviate its predicament by making a proper Part 36 offer and so lost the opportunity provided by the rules of recovering those costs from the claimant. The claimant's dishonesty must be penalised. The claimant's failure to negotiate a claim which was clearly capable of being settled must also be recognised. When I balance those factors, and attempt to do justice to both parties and to be fair to them, I conclude that the right order in this case is that there be no order for costs."
"In this line of cases, where the plaintiff only recovers between 1% and 3% of his original claim (sometimes, but not always, after a late amendment) the court is entitled to ask itself: 'Who was essentially the winning party?' It will not be distracted from making a just order as to costs by the absence of a payment into court which the plaintiff obviously would not have accepted (see Alltrans Express Ltd v CVA Holdings Ltd  1 All ER 685 at 692, 693  1 WLR 394 at 403, 404 per Stephenson and Griffiths LJJ), or where the defendants did not have a proper opportunity to make a payment into court which obviously would not have been accepted (see Beoco Ltd v Alfa Laval Co Ltd  4 All ER 464 at 479-480.  QB 137 at 156). Although all these cases are different, in the present case the substantive lis between the parties on the trial of the preliminary issues related to the big claim on which the plaintiff wholly failed."
The Deputy Judge's decision
Lord Justice Jackson:
Lord Justice Tomlinson :
"The judge must look closely at the facts of the particular case before him and ask: who, as a matter of substance and reality, has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to a finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?"
"SB and CM agree that earlier diagnosis of foot ischaemia would not have influenced the date of amputation as patients with severe ischaemia almost always delay amputation until such time as their symptoms become unbearable. JC refers to his response to question 19."
Self-evidently, the experts did not understand that they had been asked a question in relation to an alleged failure to prescribe appropriate analgesia during the period prior to the amputation. One or two questions were asked by the Claimant's counsel of two of the vascular surgery expert witnesses about whether earlier referral would have resulted in more effective analgesia, by reason of using opiate analgesia rather than the less effective analgesia prescribed by the second Defendant. It was on this basis that the Claimant succeeded. The judge allowed the claim under the general rubric of "avoidable pain and suffering" notwithstanding that the pleaded particulars of that pain and suffering are couched in terms of earlier admission to hospital leading to a successful thrombectomy/embolectomy and the avoidance of a below knee amputation. The successful claim is in my view properly characterised as an afterthought which happily for the Claimant was technically open on the pleadings. The judge himself described the award of £2,000 as "having an academic feel to it". In these circumstances the judge in my view reached a conclusion as to who was the successful party which was wrong in principle.
(a) a Defendant's Part 36 offer relates to part only of the claim; and
(b) at the time of serving notice of acceptance within the relevant period the claimant abandons the balance of the claim,
the claimant will be entitled to the costs of the proceedings up to the date of serving notice of acceptance unless the court orders otherwise."
It is in my view implicit in this rule that in such a situation the starting point is that the costs recoverable will include those referable to the entire claim hitherto pursued but, by acceptance of an offer relating to part only of the claim, subsequently in part abandoned. So here the starting point would be that the Claimant would on acceptance of a Part 36 offer in the sum of, say, £3,000, be entitled to recover his costs to date. Whether those costs were proportionate would be a matter for the costs judge. But in Lownds v Home Office  1 WLR 2450 this court presided over by the architect of the CPR, Lord Woolf CJ, gave guidance as to the resolution of this question in a case where the Claimant recovered significantly less than he had claimed:-
"39. Turning to the specific points of principle raised by May LJ (paragraph 11 above) where a claimant recovers significantly less than he has claimed, the following approach should be followed. Whether the costs incurred were proportionate should be decided having regard to what it was reasonable for the party in question to believe might be recovered. Thus (i) the proportionality of the costs incurred by the claimant should be determined having regard to the sum that it was reasonable for him to believe that he might recover at the time he made his claim; (ii) the proportionality of the costs incurred by the defendant should be determined having regard to the sum that it was reasonable for him to believe that the claimant might recover, should his claim succeed. This is likely to be the amount that the claimant has claimed, for a defendant will normally be entitled to take a claim at its face value.
40. The rationale for this approach is that a claimant should be allowed to incur the cost necessary to pursue a reasonable claim but not allowed to recover costs increased or incurred by putting forward an exaggerated claim and a defendant should not be prejudiced if he assumes the claim which was made was one which was reasonable and incurs costs in contesting the claim on this assumption."