Sutherland v Turnbull

Acceptance of a Part 36 offer gives the claimant the costs entitlement under Part 36.10(1) unless the offer relates to part only of the claim and, at the time of acceptance, the claimant separately abandons the balance. An offer expressed by reference to particular injuries may nevertheless settle all outstanding liability issues if, objectively construed, that is its effect. The fact that the offer provides compensation only for specified injuries does not necessarily confine it to that part of the claim. Acceptance alone does not imply abandonment. A separate, distinct act of abandonment is required before the court’s discretion under Part 36.10(2) arises.

The claimant brought a personal injury claim arising from being run over by the defendant’s vehicle after falling from her husband’s moving car. Liability, contributory negligence, causation and the injuries caused by the collision were ordered to be tried separately from quantum.

The defendant made two alternative Part 36 offers. The claimant accepted the first, under which the defendant agreed to contribute 30% of the damages and consequential loss arising from specified injuries. The offer stated that the claimant’s head, facial and scapula injuries had resulted from her fall before the collision. The parties agreed that the liability trial should be vacated, but disputed the costs order. The central issue was whether the accepted offer related to part only of the claim and whether the claimant had abandoned the balance within Part 36.10(2).

1. The defendant’s accepted offer was objectively an offer to settle all outstanding liability issues, including liability, contributory negligence and causation. It left only the assessment of damages and consequential loss to be determined. The fact that the monetary contribution was calculated by reference to specified injuries did not confine the offer to a partial claim.

2. The structure of Part 36 supported that conclusion. If the offer had related only to the specified injuries, Part 36.11(3) would have left the remaining claims unstayed. That was inconsistent with the parties’ objective understanding and with the proposed consent order vacating the liability trial and listing the matter for directions on quantum.

3. Part 36.10(2) requires two cumulative conditions: the offer must relate to part only of the claim, and the claimant must abandon the balance at the time of acceptance. Abandonment must be a separate and distinct act. It could not be implied merely from accepting an offer which provided no financial compensation for particular injuries.

4. Onay v Brown [2010] 1 Costs LR 29; [2009] EWCA Civ 775 supported the conclusion that an offer solely concerning liability is not an offer relating to part only of the claim for the purposes of the costs rules. There was no material distinction where liability and causation were both in issue.

5. E. Ivor Hughes Educational Foundation v Leech [2005] EWHC 1317 (Ch) was distinguishable. There, the payment concerned one discrete issue and the claimant separately and expressly abandoned the remaining claims.

6. The defendant therefore had no discretion under Part 36.10(2). The claimant was entitled under Part 36.10(1) to the costs of the proceedings up to 15 September 2010, the date of acceptance.