Carver v BAA Plc

Under Part 36 of the Civil Procedure Rules, “more advantageous” has an open-textured meaning. The comparison is not confined to pounds awarded and pounds offered. The court may assess overall advantage, including the offer’s terms and timing, available information, the parties’ conduct, the cost and risk of continuing, and litigation’s emotional burden. A claimant who beats an offer by a small sum may still fail to obtain a more advantageous result where the extra recovery is outweighed by irrecoverable costs and stress. A tailored costs order may also be made under CPR 44, taking account of pre-action conduct, failure to engage with reasonable offers and exaggeration.

The claimant, an air hostess, sustained an ankle injury in a defective lift at Gatwick Airport. Liability was admitted. The defendant made an interim payment and a Part 36 payment, together worth £4,520. At trial the claimant recovered £4,686.26.

The Central London County Court held that the judgment was not more advantageous than the defendant’s offer, ordered the claimant to pay the defendant’s costs after the offer period and made no order for costs for a preceding period. The claimant appealed. The central issue was whether a small monetary excess necessarily made the judgment more advantageous under Part 36 of the Civil Procedure Rules, or whether the court could assess all the circumstances.

The appeal was dismissed unanimously. Ward LJ gave the leading judgment, with Rix and Keene LJJ agreeing.

1. The payment into court was made before 6 April 2007. Under rule 7(2) of the Civil Procedure (Amendment No. 3) Rules 2006, the amended Part 36 consequences applied because the payment would have attracted consequences under the former rules.
2. The former regime generally treated beating a payment into court by £1 as decisive. The amended Part 36 regime applies the same approach to money and non-money claims. The expression “more advantageous” is open-textured and permits review of all the facts and circumstances. Relevant matters include the offer’s terms, timing, available information, the conduct of the parties, the financial and emotional cost of continuing, and whether the litigation was worth pursuing.
3. The judge was entitled to conclude that the claimant’s additional £51 did not make the judgment more advantageous. The irrecoverable costs and stress of continuing the litigation outweighed that modest gain. The judge’s reference to the injustice exception in rule 36.14(2) was a misdirection, but it probably had no causative effect. The order for the defendant’s post-offer costs therefore stood.
4. The separate decision to make no order for costs between the earlier offer and the payment into court was also within the judge’s discretion. Under CPR 44, the court could consider the parties’ conduct before and during proceedings, the reasonable pursuit of issues, settlement offers and the exaggeration of the claim. The failure to respond or make counter-proposals, the late withdrawal of the exaggerated claim and the disproportionate costs justified the order. The Court of Appeal would not interfere absent an error of principle or an exercise outside the generous ambit of discretion.

• Court of Appeal (Civil Division): The appeal was dismissed. [2008] EWCA Civ 412.
• Central London County Court: His Honour Judge Knight QC entered judgment for the claimant for £4,686.26, ordered the claimant to pay the defendant’s costs after the relevant Part 36 period and made no order for costs for the period between the earlier offer and the payment into court.