Knibbs -v-Heart of England NHS Foundation Trust (23/6/2017)

This was a significant clinical negligence claim against three Defendants, which was ultimately compromised in the sum of £200,000, following acceptance of the Defendants’ Part 36 offer, albeit one month out of time. The Defendants sought an order that the Claimant pay their costs of the action from a much earlier date than the date of expiry of the Part 36 offer. District Judge Truman presiding was therefore tasked with providing some much needed guidance as to when it is appropriate for a Court to depart from the usual Order for costs, in cases where a Claimant accepts a Defendant’s Part 36 offer out of time.

In this matter, proceedings were issued on 9th April 2013 and the Schedule of Loss prepared at that time set out a number of heads of loss which were not yet capable of quantification. The Claimant’s final Schedule of Loss was ultimately pleaded at in excess of £1.1 million, with the Defendants’ Counter Schedules of Loss all totalling less than £20,000. Following disclosure of medical evidence on 10th July 2014, the Defendants made a joint Part 36 offer of £75,000, to which the Claimant did not respond. On 24th September 2015, the Defendants made a further joint Part 36 offer, this time in the sum of £200,000, which should have been accepted by 16th October 2015. The Claimant made a counter offer but then ultimately accepted the Defendants’ offer on 12th November 2015.

The Defendants thereafter made an Application, seeking an Order that the Claimant pay the Defendants’ reasonable costs on an indemnity basis from 11th July 2014 (the day after disclosure of the medical evidence) onward. The Defendants stated that the Claimant had over-exaggerated their claim and pointed to the fact that the Claimant had accepted an offer more than five times lower than their pleaded Schedule of Loss. It was the Defendants’ further position that the Claimant’s Schedule of Loss was so over-exaggerated that it made any real negotiations impossible and therefore prevented early settlement of the claim.

The relevant part of the CPR to be considered here is 36.13(4)(b), which states that where a Part 36 offer which relates to the whole of the claim is accepted after expiry of the relevant period, the liability for costs must be determined by the Court unless the parties have agreed the costs. CPR 36.13(5) sets out the burden that is on the party applying for an Order other than the “usual” Order in these situations:

(5):  Where paragraph (4)(b) applies but the parties cannot agree the liability for costs, the court must, unless it considers it unjust to do so, order that

             (a) the claimant be awarded costs up to the date on which the relevant period expired; and

             (b) the offeree do pay the offeror’s costs for the period from the date of the expiry for the relevant period to the date of acceptance.

(6): In considering whether it would be unjust to make the orders specified in paragraph (5), the court must take into account all the circumstances of the case including the matters listed in rule 36.17(5).

The relevant issue listed at CPR 36.17 (5) in this case is “the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated.” Ultimately, the case pursued by the Claimant was one of acceleration, and the Defendants therefore sought to show that the Claimant must have known this when proceedings were issued and had therefore failed to plead their case properly. The Claimant refused to redraft his Schedule of Loss but it was made clear to the Defendants on a number of occasions that although the pleaded case remained the same, the Claimant was willing to discuss the matter and explore negotiations at a Round Table Meeting.

DJ Truman was of the opinion that the Claimant’s schedule was “enthusiastic” but was quick to clarify that “being over enthusiastic is not the same as behaving improperly” and found that this was not a case where the Claimant had deliberately exaggerated his injuries or the resulting claim for damages. The Claimant’s claim for loss of earnings was roughly £650,000 and, as Counsel for the Claimant set out, this was an “all or nothing” head of loss. DJ Truman accepted this as a sufficient and proper explanation of the discrepancy between the pleaded claim and the eventual settlement value.

Further, DJ Truman stated that “The Claimant’s solicitors did what Claimant solicitors are supposed to do, which is to try and get an appropriate settlement for their client. They did not wish to settle at £75,000.  When a higher offer was made they considered it and that was accepted.” Reference was made to the fact that the Defendant had been aware of the Claimant’s medical evidence since July 2014, and of the Claimant’s quantum position since September 2014, and that it had therefore been open to them to make the offer of £200,000 at a much earlier juncture. DJ Truman therefore found that there was no need to depart from the usual Order in such cases, as the making of such an Order was not unjust.