England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand London, WC2A 2LL
		10th July 2015

SIR COLIN MACKAY:

1. This is an application by Miss Rodway QC arising out of an ancillary issue I decided at the end of a split trial on liability only, in which I gave judgment for the claimant on 11 June last. So far as matters relating to the costs of the same, I invited written submissions, read them and produced without oral argument being addressed to me a subsidiary or second judgment on that issue, the relevant parts of which were paragraphs 1 and 4; it is paragraph 1, at which Miss Rodway now directs her fire.
2. It is common ground between both sides that the applicable version of the rules of the court, Civil Procedure Rules 1998, so far as this case is concerned are to be found in the 2014 edition of the White Book. There are changes that were made shortly afterwards which appear in the current edition of that work. The parties agree that I should be guided by, and act within, the 2014 rules. Secondly, it is agreed that the judgment the claimant was awarded was more advantageous than the offer that he made and which was rejected. Thirdly, it is agreed that Part 36, which caused an innovation when it was introduced in the 1998 rules, is to be read as a self-contained code and not to be confused with contractual notions or general costs discretion under Part 44 or non-Part 36 offers such as Calderbank type offers. The cases which support that correct concession have been shown to me: Gibbon v Manchester City Council [2010] 1 WLR 2081; Fox v Foundation Piling Ltd [2011] EWCA Civ 790; and Coward v Phaestos [2014] EWCA Civ 1256.
3. What happened here was that, on 12 March 2015, the claimant offered to settle this case in return for a judgment in his favour in which he would recover 80 per cent of the damages to be awarded in the split-trial case. The relevant period within which the defendant could (without leave) accept that offer expired on 2 April. It was not accepted and the claimant seeks to recover a judgment for damages to be assessed in full. Had the defendant decided to accept that offer within the relevant period, then the claimant would automatically have become entitled to the costs of the proceedings up until the date on which he served his notice and those were expressed to be under CPR 36.10(3) on the standard basis. As it is the matter went ahead.
4. The consequences of the claimant's success (if I may so call it), were that CPR 36.14 had come into play. As has been seen in the cases which I have cited, to which I made reference, that is a complete code into which nothing else should be imported from other areas of our jurisdiction.
5. I should read 36.14(3):

(3) Subject to paragraph (6), where rule 36.14(1)(b) applies, the court will, 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 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) an additional amount, which shall not exceed £75,000, calculated by applying the prescribed percentage set out below to an amount which is—

(i) where the claim is or includes a money claim the sum awarded to the claimant by the court…"

6. Subparagraph (4) goes on to consider what the court should consider when deciding whether it would be unjust to make two of the orders in particular the subparagraph (3) orders set out above.
7. In the event I ordered indemnity costs and I ordered them, on the on the face of it, to run throughout. I ordered interest on those costs but at the lower rate than the maximum, that is to say 5 per cent over base rate, that to run from 6 April (it should have been 2 April) at the end of the relevant period. I expressly said I made no order under 36.14(3)(a) and (d) and I did that because I thought that in the circumstances of a claim where nothing at all was known to either side of the overall planning of this claim, which could be very high or very modest and, despite the dramatic nature of the injuries, that it would simply be unjust to apply those provisions.
8. At the heart of this debate today has been Miss Hewells for the claimant arguing that I do not have power to take that course, that this is not only a complete code but it is, as it were, a menu all of whose courses must been delivered. I am not free to choose between the relevant features of subrule (3) or to find that to apply one would be unjust and to apply another would not.
9. Miss Rodway argues that I am required to consider the subparagraph and asked at each stage, would the application of this subparagraph to this case with its own particular circumstances, have been unjust. Reading the plain language of the rule as best I can, I have preferred Miss Rodway's construction of this provision. I also consider that she is right to argue that its proper provision would prevent the indemnity basis of assessment being applied on any day prior to the end of the relevant period. It is to be noticed that, of course, had the defendant accepted the offer within the relevant period by 36.10(1) and then (3) then the claimant would be entitled to costs of up to a point but to be assessed on the standard basis. I do not consider that it was right to make the order I made.
10. Because I had not heard oral argument on this matter, I left it open to counsel if they wished to come back on the draft order I imposed, and that is what has happened today. The result of that is that I believe the order as drawn was wrong to the extent that the provision that the defendant pay the plaintiff's costs relating to the issue of liability be assessed on an indemnity basis should be restricted expressly to the costs incurred or it coverable after the expiry of the relevant period, namely from 2 April 2015. So to that extent I agree the order must be amended.