ON APPEAL FROM
SHEFFIELD COUNTY COURT
HIS HONOUR JUDGE BULLIMORE
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE MOORE-BICK
LORD JUSTICE JACKSON
| MR TREVOR MICHAEL FOX
|- and -
|FOUNDATION PILING LIMITED
Mr. Peter Burns (instructed by DWF Solicitors) for the Respondent
Hearing date : 9 June 2011
Crown Copyright ©
Lord Justice Jackson :
Part 1 Introduction,
Part 2 The Facts,
Part 3 The Appeal to the Court of Appeal,
Part 3 The Law,
Part 5 Decision.
"As a result of the accident which occurred on 11 April 2003, Mr Fox suffered from a lumbar back injury. He developed acute lumbar back pain and bilateral sciatica. In spite of conservative treatment this has not improved and he is still suffering from severe back pain and pain in both legs. The MRI scan has reported that there is lumbar disc protrusion at L4/5 level but there are also some degenerative changes in other disc spaces. The past medical history shows that Mr Fox suffered from lumbar back problems in the 1980's and also had a lumbar back strain in August 1996. There is no history suggesting any lumbar back problems subsequently and he was free of complaints from 1996 until the accident. The past medical history and radiological appearance suggest that Mr. Fox suffers from degenerative problems in his lumbar spine and the present accident appears to have aggravated seriously a pre-existing condition. In order to be able to consider the prognosis and possible treatment, I will need to review the lumbar spinal MRI scan.
As things are at present, it is unlikely that Mr. Fox will return back to his previous employment."
" (2) If the court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order."
"(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply."
It should be noted that the wording of rule 44.3 (4) has remained very similar both before and after the reforms of April 2007.
"I regard this case as different from Painting. In that case Mrs Painting, as claimant, made no attempts to negotiate despite her obvious exaggeration of her claim. In this case, however, the claimant did accept the effect of the contents of the video evidence that had been procured and reduced his claim accordingly, both openly and in the course of "without prejudice" negotiations. The exaggeration and untruthfulness which the Recorder found in this case was taken into account by him, and although some judges might well have reduced the claimant's entitlement to all his costs, without reason I cannot say, for my part, that any reasonable judge must have done so. This is matter which, in para. 26 of Painting, I said did need to be addressed. The judge did not address the matter but concluded that nevertheless, for reasons which he gave, the defendants should pay the claimant's costs. That was within the broad discretion which any judge has on the matter of costs"
"The way in which regard is to be had to that conduct is principally to enquire into its causative effect: to what extent did her lies and gross exaggeration cause the incurring or wasting of costs? It is obvious that she should recover nothing in respect of the reports she obtained from Miss Porter and the costs judge would disallow anything arising from that. On the other side of the balance sheet the defendant should have some compensation for wasted costs incurred by having to consider those reports and to deal with the case of the basis that they formed part of the pleaded claim which it had to meet. The lie was short-lived: on receipt of its own medical report in January 2007 the defendant knew of the pre-existing injury and was able to judge how to run its own case. The defendant was able to protect itself by making a proper Pt 36 offer. Nevertheless the schedule of loss before the court, and thus the case the defendant still had to meet, on paper at least, was one valued by the claimant in the sum of about £160,000. The defendant was entitled to protect itself against a claim of that magnitude or even a claim of some £35,000, which it became three weeks before the trial. The claimant was not treating it as a claim which should be measured at about £5,000. Small claims are not worth contesting, are not worth engaging enquiry agents to carry out covert surveillance and small claims are often not worth fighting and so are much more likely to settle. Here the defendant was put to expense arising out of the manner in which the case was unreasonably being conducted, certainly up until the final schedule of loss was served in October. Some compensation for the defendant put to the expense of defending such an exaggerated claim should be entered on the notional balance sheet."
"4. It can be seen from Part 36 as a whole, as well as from the extracts cited above, that it contains a carefully structured and highly prescriptive set of rules dealing with formal offers to settle proceedings which have specific consequences in relation to costs in those cases where the offer is not accepted and the offeree fails to do better after a trial. In cases where there has been no Part 36 offer or a Part 36 offer has been bettered the judge has a broad discretion in dealing with costs within the framework provided by Part 44. Rule 44.3 (4) provides that when exercising its discretion as to costs the court will have regard to the general rule that the unsuccessful party should pay the costs of the successful party, but will also have regard to the conduct of the parties and any payment into court or admissible offer to settle made by one or other party which falls outside the terms of Part 36. In seeking to settle the proceedings, therefore, parties are not bound to make use of the mechanism provided by Part 36, but if they wish to take advantage of the particular consequences for costs and other matters that flow from making a Part 36 offer, in relation to which the court's discretion is much more confined, they must follow its requirements.
5. Part 36 is drafted as a self-contained code. It prescribes in some detail the manner in which an offer may be made and the consequences that flow from accepting or failing to accept it. In some respects those consequences reflect broadly the approach the court might be expected to take in relation to costs; in others they do not; for example, rule 36.14 (3) allows the court award a claimant who has obtained a judgment at least as advantageous as his offer interest on the sum for which he has obtained judgment at an enhanced rate of up to 10% over base rate, costs on the indemnity basis and interest on those costs at an enhanced rate as well."
Lord Justice Moore-Bick:
Lord Justice Ward: