Source: http://www.paragoncosts.com/site/blog/paragon-blog/part-36-trumps-part-44
Timestamp: 2017-11-20 23:01:23
Document Index: 657151099

Matched Legal Cases: ['art 36', 'art 44', 'art 36', 'art 44', 'EWCA ', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 44', 'art 36', 'art 36', 'art 36', 'art 36', 'art 44', 'EWCA ', 'EWCA ', 'EWCA ', 'art 44', 'art 36', 'art 44', 'art 36', 'art 36', 'art 36', 'EWCA ', 'art 36', 'art 36', 'art 44', 'art 36', 'art 36', 'art 44', 'art 44', 'art 36', 'art 44', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36']

Part 36 Trumps Part 44 - Bristol
Part 36 Trumps Part 44
This article concerns the recent Court of Appeal decision in Webb -v-Liverpool Women's NHS Foundation Trust [2016] EWCA Civ 365.
This was a clinical negligence claim which arose following the Claimant suffering a brachial plexus injury as a result of shoulder dystocia during her birth. The Claimant’s allegations of negligence against the Defendant centred around two main issues: firstly, that the during the labour, despite it being stated on four occasions that a caesarean section was required, none was ever performed and the Defendant negligently allowed her to proceed to a vaginal delivery; secondly, that the Defendant negligently managed the vaginal delivery because the midwives present failed to adopt the approved procedures for shoulder dystocia.
Proceedings ensued against the Defendant and on 1 October 2014 the Claimant made a Part 36 offer to settle the liability aspect of the claim on the basis that she receive 65% of the damages which would accrue on a 100% basis. The Defendant rejected the offer on 9 October 2014 (effective date 23 October 2014).
At trial the Claimant was successful in regard to the first allegation only, however, because she had successfully established that her injury had been caused by the Defendant’s negligence in failing to undertake a caesarean section, she was entitled to a full recovery of damages with no contribution for contributory negligence. The Claimant had therefore secured a more advantageous result at trial than that contained within her Part 36 offer dated 1 October 2014.
Naturally, when judgment was handed down, Counsel for the Claimant made representations that CPR Part 36.14 (3) (old rules) applied and therefore that the Claimant should receive all costs from expiry of the Part 36 offer on the indemnity basis together with enhanced interest and the enhancements pursuant to Part 36.14(3)(a)(d).
The Defendant argued that CPR 36.14 should be dis-applied by reference to CPR 36.14 (4) as it would be unjust to apply them and also that Part 36 did not prevent the court from making an issues-based or proportionate costs order to reflect the Claimant’s lack of success in relation to the second pleaded aspect of negligence, which it argued was a discrete and independent allegation. It was the Defendant’s position that the Claimant should have the additional benefits pertaining to the costs of the first allegation only and that the Claimant should get no costs associated with the second allegation, much less any additional uplift.
On 1 April 2014 the court found in the Defendant’s favour that the Part 36 did not prevent it from making an issues-based or proportionate costs order despite the Claimant being a successful Claimant (because she obtained a result at least as advantageous as the terms of the offer dated 1 October 2014) and within the context of the case it was just to make such an order that would prevent the Claimant from recovering her costs of the second allegation but granted the uplift pursuant to CPR 36.14(3)(d). As part of the costs disallowed in particular the Claimant was precluded from recovering the fees of the mid-wife expert whose report was confined to issues associated with the second allegation together with 25% of the solicitor’s profit costs which the judge determined was the proportion related to the second allegation. All other costs incurred after 22 October 2014 were allowed on the indemnity basis together with interest pursuant to CPR 36.14(3)(d). The Claimant was granted permission to appeal.
It was the Claimant’s contention that this was not a case which provided justification for depriving the successful Claimant of any of her costs on the basis that it had not been unreasonable or irresponsible to pursue the second allegation. Also the Claimant emphasised that both allegations related to a single event, her birth, and the management of the same by the Defendant, and that it was common, particularly in relatively complex personal injury cases, for the Claimant’s success to be in relation to only some of the allegations of negligence and that failure in relation to a sensibly pursued allegation did not justify deprivation of costs.
The Defendant in contrast argued for the advantageousness of the trial judge in assessing the conduct of the case and argued that the Court of Appeal should be reluctant to interfere with a decision of the trial judge in regard to costs and also outlined the need for the Appellant Claimant to show that the trial judge had erred in law or in the application of principle.
The main grounds of the Claimant’s appeal were:
a) In its true construction Part 36 excludes the normal discretion of the court to make an issues-based or proportionate costs order; alternatively
b) A successful Claimant can only be deprived of her costs if it is shown that it would be unjust for her to recover all of her costs; and
c) The judge erred in law in deciding he could and should deprive the Claimant of her costs attributable to the second allegation.
The Defendant’s response was as follows:
a) The judge's discretion under Part 44 entitled him to deprive the Claimant of her costs relating to the second allegation prior to the effective date;
b) The judge was entitled to restrict the Claimant’s recovery of her costs relating to the first allegation, and to have only those costs associated with the second allegation assessed on the indemnity basis; and
c) In any event the judge was entitled to find that it would be unjust for the Claimant to recover her costs of the second allegation and within the circumstances of the case was entitled to make an issues-based or proportionate costs order, as he had made.
The Claimant’s appeal came before Sir Stanley Burnton who was quick to acknowledge that a new set of rules relating to Part 36 offers had been implemented prior to the appeal being heard however he confirmed that the same did not affect the issues of the appeal at hand and gave appropriate consideration to the provisions of the old Part 36.14.
Sir Burnton considered the approach of the trial judge who had found in the absence of a Part 36 offer he would have been disposed to exercise his discretion to make an order to reflect the Claimant’s failure on the second allegation Sir Burnton determined that he did not find the trial judge to have found that the Claimant had unreasonably pursued the second allegation and nothing in his judgment would have justified him in doing so and any exercising of his discretion on that basis would fall to be queried on that ground alone.
Sir Burnton then noted that the trial judge had satisfied himself that the presence of a successful Part 36 offer did not preclude the court from making an issues-based or proportionate costs order and that it was permissible to make such an order to avoid injustice, which would arise from the Claimant’s failure on the second allegation of negligence. Sir Burnton concluded that the trial judge had determined it would be unjust for the Claimant to recover all her costs because of the failure of the second allegation.
Costs Before the Effective Date
1. The appeal judge was persuaded that the trial judge could not properly deprive the Claimant of her costs relating to the second allegation for the grounds relied upon by the Claimant; whilst the two allegations pertained to separate parts of the labour they were one event, the Claimant's birth, and as such her injuries were such as would not have been caused without negligence in the care of her birth.
2. It could not be said that the Claimant was unreasonable to pursue the second allegation, which was supported by expert evidence and although it was not necessary for the conduct of a part to be castigated as unreasonable for her to be deprived of all of part of her costs it was significant that Part 44.2 (4) and (5) provided:
3. It is not unusual for a Claimant to succeed on some but not all allegations particularly in a personal injury case and Sir Burnham found nothing in the case to take it out of the ordinary or to justify the Claimant being deprived of part of her costs. In reaching this conclusion the court had regard for two cases in particular:
In HLB Kidsons v Lloyds Underwriters 2007 EWHC 2699 (Comm), Gloster J, as she then was, said:
"11. There is no automatic rule requiring reduction of a successful party's costs if he loses on one or more issues. In any litigation, especially complex litigation such as the present case, any winning party is likely to fail on one or more issues in the case. As Simon Brown LJ said in Budgen v Andrew Gardner Partnership [2002] EWCA Civ 1125 at paragraph 35: 'the court can properly have regard to the fact that in almost every case even the winner is likely to fail on some issues.' Likewise in Travellers' Casualty [2006] EWHC 2885 (Comm), Clarke J said at paragraph 12:
'If the successful Claimant has lost out on a number of issues it may be inappropriate to make separate orders for costs in respect of issues upon which he has failed, unless the points were unreasonably taken. It is a fortunate litigant who wins on every point.'"
"48. In a personal injury action the fact that the claimant has won on some issues and lost on other issues along the way is not normally a reason for depriving the claimant of part of his costs: see Goodwin v Bennett UK Limited [2008] EWCA Civ 1658. For example, the claimant may succeed on some of the pleaded particulars of negligence, but not on others. Indeed the fact that the claimant has deliberately exaggerated his claim may in certain instances not be a good reason for depriving him of part of his costs: see Morgan v UPS [2008] EWCA Civ 1476. …"
Costs After the Effective Date
4. CPR 36.14 (3) is clear that a successful Claimant is entitled to all her costs on the indemnity basis, unless it would be unjust for her to be awarded those costs, and thus the exercise of discretion under Part 44 took into account the Part 36 offer at that stage. That provision, he noted, was in contrast to the present wording of Part 44 which expressly excluded from the court’s consideration any offer to which the cost consequences of Part 36 applied.
5. Sir Burnton confirmed his view that the meaning of Part 36.14 was supported by the substantial line of authority to the effect that Part 36 is now a self-contained code and referred to Ward LJ in Shovelar v Lane [2011] EWCA Civ 802 [2012] 1 WLR 637 at paragraph 52:
"52. … Part 36 is a separate, self-contained code. It must be applied as such. If the offer is one to which the costs consequences under Part 36 apply, then it cannot be taken into account under Part 44 because, although CPR 44.3(4)(c) requires the court to have regard to "any payment into court or admissible offer to settle", those words are qualified by the words which follow namely 'which is not an offer to which costs consequences under Part 36 apply'. Part 36 trumps Part 44."
He stated ‘In deciding what costs order to make under 36.14, the Court does not first exercise its discretion under Part 44. Its only discretion is that conferred by Part 36 itself. The alternative construction requires the Court first to exercise its discretion under Part 44, on the basis of all the circumstances of the case, and then to exercise its discretion under Part 36, again having regard to all the circumstances of the case. This makes no sense. It follows from the above, and in particular that Part 36 is a self-contained code, that the discretion under 36.14 relates not only to the basis of assessment of costs, but also to the determination of what costs are to be assessed. I agree with the Judge that Part 36 does not preclude the making of an issue-based or proportionate costs order. However, a successful claimant is to be deprived of all or part of her costs only if the court considers that would be unjust for her to be awarded all or that part of her costs. That decision falls to be made having regard to "all the circumstances of the case". In exercising its discretion, the Court must take into account that the unsuccessful defendant could have avoided the costs of the trial if it had accepted the claimant's Part 36 offer, as it could and should have done.”
Sir Burnton allowed the appeal and set aside the material parts of the trial judge’s costs order and ordered the Defendant to pay all of the Claimant’s costs on the indemnity basis from the effective date. He stated “I am clear that, for the reasons I have given in relation to the Claimant's costs before the effective date, it cannot be said that it would be unjust for her to be awarded all her costs”. Furthermore, in making his determination, the Judge did not take into account, as he should have the fact that the Defendant could have avoided all the costs of the trial by accepting the Claimant's favourable Part 36 offer. The considerations to which I referred apply even more strongly in relation to her costs after the effective date, when the question is not whether it is just for her to be awarded all her costs, but whether it would be unjust for that award to be made”.
Tellingly, he also stated "It is a sad fact that the provisions of Part 36, intended to promote the settlement of litigation, and thus to minimise costs, have themselves been productive of numerous appeals to this Court, and in consequence substantial costs in what is effectively satellite litigation. This is presumably because Part 36 is highly prescriptive (so that even experienced lawyers may fail to make a compliant offer) and the financial consequences of the application of the provisions of Part 36, or the failure to comply with the requirements of Part 36, may be substantial.”
This ruling raised key questions as to the powers of the trial judge under CPR Part 36 and the process they must apply before making any order which contravene the application of the benefits/consequences as set out under CPR Part 36.14 (now CPR 36.17). Firstly the court should determine who is the successful party and if it is clear that if the Claimant has beaten their own Part 36 offer on liability the court should only make an issues-based or proportionality order if not do so would be unjust to the Defendant.