Alli v Luton & Dunstable NHS Trust

After a trial, the normal incidence of costs should not be displaced merely because the successful party’s account of an ancillary factual matter changed or differed from the evidence at trial. The relevant question is whether the change materially altered the case the opposing party had to meet or otherwise amounted to conduct justifying departure from the ordinary costs rule. It is ordinarily inappropriate to speculate about how a party might have acted if the facts had been presented differently. Only the most extraordinary circumstances will make such speculation a sufficient basis for altering costs. Where a claimant’s Part 36 offer is not accepted and the claimant succeeds, the normal Part 36 consequences should follow unless justice requires otherwise.

The claimant, a nurse, succeeded at trial in the Central London County Court on liability for injuries suffered when she fell on an inadequately lit hospital staircase. The trial judge found that the staircase lighting breached the respondents’ obligations and rejected contributory negligence, but made no order as to costs because the claimant’s evidence at trial differed from the account previously advanced about lighting in the corridor.

The claimant appealed against the costs order. She sought the ordinary costs consequences of her Part 36 offer, including indemnity costs and enhanced interest from the relevant date. The central issue was whether the change in her account materially affected the case the respondents had to meet so as to justify departing from the normal costs rules.

1. Appeal allowed. The trial judge’s findings on the claimant’s liability case were not affected by the change in her account. The darkness at the bottom of the stairs remained the cause of the accident, and the lighting at the top of the stairs was ancillary to the central issue.
2. The respondents had relied on the changed evidence to support their arguments that there was no breach because the light switches were visible and that the claimant was contributorily negligent. The judge rejected both arguments. The respondents therefore misjudged the strength of their own case; the change did not materially alter the case they had to meet.
3. The ordinary rule in Rule 44.3 of the Civil Procedure Rules 1998 should not be displaced. Speculation about how a party might have approached settlement in light of a different factual presentation will justify altering the normal incidence of costs only in the most extraordinary circumstances.
4. There was no justification for withholding the normal consequences of the claimant’s Part 36 offer. The respondents were ordered to pay the claimant’s costs below on the indemnity basis, with enhanced interest from 3 September 2004. The respondents were also ordered to pay the appeal costs on the standard basis, with liberty to apply concerning entitlement to indemnity costs.

• Court of Appeal (Civil Division) — [2005] EWCA Civ 551: allowed the appeal from the costs order made after the claimant succeeded on liability in the Central London County Court. Substituted costs orders giving effect to the claimant’s Part 36 offer.
• Central London County Court — trial before His Honour Judge Cowell on 5 November 2004: judgment for the claimant on liability, but no order as to costs.