24 MAY 2016
Procedure – Part 36 offers – Costs – Civil Procedure Rules
Courtney Webb (by her litigation friend Stacy Keira Perkins) v Liverpool Women’s NHS Foundation Trust  EWCA Civ 365
14 April 2016
Court of Appeal: Gloster LJ, Simon LJ, Sir Stanley Burnton
The claimant brought a claim of medical negligence against the defendant on two grounds: one was that they failed to carry out a caesarean, and the other was that they then failed to manage the vaginal birth appropriately. At trial the claimant succeeded on the first ground and failed on the second, but still managed to obtain a judgment more advantageous than a Part 36 offer previously rejected by the defendant. An issue-based cost order was then made which restricted the amount to be recovered by the claimant on the grounds that they had failed to establish the second allegation. This was appealed successfully.
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The claim resulted from the claimant's birth in the course of which she suffered a brachial plexus injury as a result of shoulder dystocia. The claimant's allegations of negligence fell into two parts. The first was that, during the labour, the claimant's mother needed a caesarean section but it wasn't performed. The second was that the vaginal delivery itself was negligently managed because the midwives failed to adopt recognised procedures to deal with the shoulder dystocia.
On 1 October 2014 the claimant made a Part 36 offer to settle liability on the basis that she received 65% of her damages that would accrue on a 100% basis. This was rejected on 9 October 2014.
At trial the amount awarded to the claimant was far more advantageous than the rejected Part 36 offer, and the claimant contended that the consequences of what was then part 36.14(3) should apply and she should have all her costs on an indemnity basis plus interest from the expiry of the relevant period. The defendant contended that the normal cost consequences of Part 36.14(3) should be disapplied as it would be unjust to impose them in the circumstances and Part 36 did not prevent the court from making an issues-based costs order to reflect the fact that the claimant failed in respect of the second allegation.
The judge held that Part 36 did not prevent the court from making an issues-based costs order, and that it had discretion notwithstanding that the claimant was successful. It was also held that it was just to make an issues-based proportionate costs order under which the claimant would not recover her costs of the second allegation. The claimant's costs referable to the second allegation were excluded including the fees of her midwifery expert and 25% of her solicitors' time costs. The costs following the expiry of the relevant period, other than 25%, would be assessed on the indemnity basis plus interest.
The claimant appealed this decision and both parties agreed that different principles were applicable to the costs incurred before and after the effective date.
The costs before the effective date were to be determined by CPR Part 44, and the claimant contended that this was not a case where there was any justification for depriving the successful claimant from any costs, as the second allegation had not been pursued unreasonably. Also, both allegations concerned a single event: namely, the claimant's birth. They also emphasised that it was common in complex medical negligence cases for the claimant to succeed on some allegations and fail on others.
The defendant stressed the well-known authorities that the court should be reluctant to interfere with a decision of a trial judge on costs, and that this judge could not have erred in law.
In relation to the costs incurred after the effective date, the claimant contended that Part 36 excluded the court's normal discretion to make issue-based or proportionate cost orders and that the true meaning of what was Part 36.14(3) was restricted to enhancements. They separately contended that a successful claimant could only be deprived of their costs if it was shown to be unjust for them to recover all their costs, which was not the case here.
The defendant contended that the judge was entitled to exercise his discretion under Part 44 to deprive the claimant of these costs as the true construction of Part 36 was that costs under 36.14(3) were to be determined by the discretion under Part 44.2. They also contended that, in any event, the judge found it would be unjust for the claimant to recover her costs of the second allegation.
It was held that, in relation to costs before the effective date, the judge could not properly deprive the claimant of costs relating to the second allegation as the allegation were part of one event: the claimant's birth. It was not unusual for a claimant to succeed on some but not all allegations, and there was nothing out of the ordinary to justify the claimant being deprived of part of her costs.
In relation to costs after the effective date, it was held that, in deciding what costs order to make under 36.14, the court did not first exercise its discretion under Part 44 and the only discretion was that conferred by Part 36 itself. Therefore, a claimant could only be deprived if it was unjust for her to recover all or part of her costs having regard to all the circumstances of the case. The judge felt that, in this case, it could not be said to be unjust for the claimant to recover all of her costs, particularly considering that the defendant could have avoided costs by accepting the Part 36 offer that was beaten.
The judge therefore ordered the defendant to pay off the claimant's costs, with the costs after the effective date to be assessed on the indemnity basis with interest.
Sandra de Souza and Tom Dickinson, Anthony Gold