Medway Primary Care Trust & Anor v Marcus

When identifying the successful party for costs purposes, the court must determine who, as a matter of substance and reality, won the litigation. The fact that one party must pay a small sum does not determine success where that recovery is insignificant beside the claim pursued and the principal issue was decided for the other party.

The general costs rule then starts in favour of the party who substantially succeeded, subject to adjustment for all relevant circumstances. A failure to make a Part 36 offer carries little or no weight where the offer would have been a ritual act, would not have been accepted and would have produced costs consequences disproportionate to the minor recovery.

The respondent brought a clinical negligence claim alleging that failures by the appellants’ general practitioners caused the amputation of his lower leg. The principal claim, agreed to be worth £525,000, failed because the deputy High Court judge accepted that timely treatment would not have prevented the amputation. The respondent nevertheless received £2,000 for avoidable pain caused by delayed diagnosis.

In [2010] EWHC 2061 (QB), the deputy judge treated the respondent as the successful party and awarded him 50% of his costs. The appellants appealed that costs order. The central question was which side had succeeded as a matter of substance and whether the absence of a Part 36 offer justified the order below.

By a majority, the appeal was allowed. The order awarding the respondent 50% of his costs was replaced by an order that he pay 75% of the appellants’ costs of the action.

1. The President of the Queen’s Bench Division, with whom Tomlinson LJ agreed, held that the deputy judge had erred in principle by identifying the respondent as the successful party. Success had to be assessed by reference to the substance and reality of the litigation. The action concerned whether negligence caused the amputation. The appellants defeated that claim completely. The £2,000 awarded on a fallback claim for additional pain was an insignificant recovery and an afterthought which did not reflect the purpose or cost of the action.

2. The fact that the appellants had to pay the respondent a small sum did not make him the successful party. The approach in Oksuzoglu v Kay [1998] 2 All ER 361 remained materially applicable despite having been decided before the Civil Procedure Rules 1998. The advent of those Rules had not materially altered the relevant considerations.

3. The absence of a Part 36 offer did not justify treating the respondent as successful. An early offer of £2,000 or £3,000 was unlikely to have been accepted and could have imposed liability for costs wholly disproportionate to the minor recovery. The failure to perform such a ritual act carried no material weight. A Calderbank offer of £3,000 together with costs proportionate to that recovery could, however, appropriately have protected the appellants.

4. The appellants’ costs recovery was reduced to 75% because the respondent succeeded to a small extent, the first appellant conceded breach only shortly before trial, and its late abandonment of evidence that a pulse had been detected had materially affected the respondent’s causation case.

5. Jackson LJ dissented. He considered that a reasonable personal injury claimant who recovered non-nominal damages and had not failed to beat a sufficient Part 36 offer should ordinarily start as the successful party. The judge could then reduce the claimant’s recovery to reflect lost issues. In his view, the deputy judge’s 50% reduction fell within the permissible ambit of the costs discretion.

1. Court of Appeal (Civil Division): By a majority, allowed the appeal from the costs order and substituted an order that the respondent pay 75% of the appellants’ costs: [2011] EWCA Civ 750.
2. High Court, Queen’s Bench Division: Andrew Edis QC, sitting as a deputy High Court judge, awarded the respondent £2,000 damages and 50% of his costs. The costs judgment was [2010] EWHC 2061 (QB). The unappealed liability judgment was [2010] EWHC 1888 (QB).