Raggett v The Governors of Preston Catholic College

Where a claimant fails to beat a defendant’s Part 36 offer, the usual costs order should be made unless it would be unjust. The court must consider all the circumstances, including the offer’s terms, when it was made, the information then available, and the parties’ conduct in providing information.

An adult claimant cannot avoid the usual order merely because further expert investigation was desirable. The relevant question is whether the parties already had sufficient information to assess the litigation risks when the offer was made. A different outcome may follow where medical prognosis is genuinely too uncertain to permit proper evaluation. A set-off may also be refused where different parties will pay and receive the damages and costs, and resolution of costs may be delayed.

The claimant had previously succeeded on liability and limitation. Following a quantum hearing, damages were assessed at £54,923.03. The defendants had made an unwithdrawn Part 36 offer of £350,000 shortly after the liability and limitation judgment.

The claimant argued that it would be unjust to apply the usual costs consequences because quantum could not reasonably have been assessed until further expert evidence had been obtained. He also sought special treatment of certain expert costs, opposed a set-off, and disputed the amount of an interim payment on account of costs. The issues were whether the Part 36 costs rule should be displaced and what consequential costs orders should be made.

1. Part 36 costs. Under Civil Procedure Rules 1998, rule 36.14, a claimant who fails to obtain a judgment more advantageous than a defendant’s offer will ordinarily pay the defendant’s costs from expiry of the relevant acceptance period, unless that order would be unjust. The court must consider all the circumstances, including the offer’s terms, the stage at which it was made, the information available, and the parties’ conduct in enabling the offer to be evaluated.
2. The circumstances did not justify departing from the usual order. The claimant was an adult with full capacity. Before the offer, the medical evidence on causation had been clearly defined, and the claimant and his advisers had substantial information about his employment history, credibility issues and the evidential difficulties in establishing causation. They therefore had sufficient information to assess the risks, even though the possible damages ranged widely depending on which medical evidence was accepted. The case was materially different from SG v Hewitt [2012] EWCA Civ 1053, where the medical prognosis was too uncertain to permit proper evaluation of the offer. The claimant was accordingly liable for the defendants’ costs incurred after 25 June 2009.
3. Expert evidence. No special order was made concerning Professor Zeitlin’s evidence. The child psychiatric evidence had been introduced at the claimant’s insistence, and it was reasonable for the defendants to obtain evidence to meet it, notwithstanding the court’s adverse assessment of the evidence.
4. Set-off and interim costs. Set-off was inappropriate because different parties were involved in paying and receiving damages and costs, and costs assessment might take time. An interim payment on account of the defendants’ costs of £200,000 was appropriate, balancing the desirability of substantial payment against the risk of exceeding the final assessed sum.
5. The costs of the minor issues resolved in the claimant’s favour at the beginning of trial were not treated separately. The defendants were ordered to pay the claimant’s costs up to and including 25 June 2009, while the claimant was ordered to pay the defendants’ costs thereafter, with payment of £200,000 on account by 11 January 2013.

The judgment records that the defendants’ unsuccessful appeal concerning the earlier liability and limitation decision, followed by an application for permission to appeal to the Supreme Court, delayed the quantum investigation. No appellate citation is stated for those procedural steps.