Webb v Liverpool Women's NHS Foundation Trust

A claimant who obtains a judgment at least as advantageous as her own Part 36 offer is ordinarily entitled to all her post-expiry costs on the indemnity basis. Under Civil Procedure Rules Part 36, “costs” in rule 36.14(3)(b) includes all of the claimant’s costs. The court may make an issue-based or proportionate order, but only where it would be unjust to award the relevant costs.

Part 36 is a self-contained code. The court does not first exercise its general costs discretion under Part 44. In assessing injustice, it must consider all the circumstances, including that a defendant could have avoided trial costs by accepting a favourable offer. A successful personal-injury claimant is not normally deprived of costs merely because some reasonably pursued negligence allegations failed.

The claimant sustained a brachial plexus injury at birth and brought a medical-negligence claim against the defendant hospital trust. She alleged both that a Caesarean section should have been performed and that the subsequent vaginal delivery was negligently managed.

The trial judge upheld the first allegation but rejected the second. The claimant had made a Part 36 offer to settle liability at 65% of full damages, which she bettered at trial. The judge nevertheless excluded costs attributable to the unsuccessful allegation and otherwise applied the Part 36 enhancements.

The claimant appealed the costs order from the High Court decision, [2015] EWHC 449 (QB). The central issue was whether Part 36 permitted an issue-based reduction of a successful claimant’s costs and, if so, whether such a reduction was unjust in the circumstances.

1. Appeal allowed unanimously. The judge’s material costs orders were set aside. The defendant was ordered to pay all the claimant’s costs, with costs from the effective date of her Part 36 offer assessed on the indemnity basis.

2. For costs before the effective date, the Court applied the ordinary Part 44 discretion. A successful claimant is not automatically deprived of costs because she failed on some allegations. The unsuccessful delivery allegation was reasonably pursued, supported by expert evidence, and concerned the same birth event as the successful allegation. There was no feature taking the case outside the ordinary position.

3. For post-effective-date costs, Part 36 was a self-contained code. Rule 36.14(3)(b) referred to all of a successful claimant’s costs, not merely those first identified as recoverable under Part 44. The court could still make an issue-based or proportionate order, but only through its Part 36 discretion where an award of all relevant costs would be unjust.

4. Kastor Navigation Co Ltd v Axa Global Risks (UK) Ltd [2004] EWCA Civ 277 was distinguishable because the earlier versions of Parts 36 and 44 were materially different. The Court followed the self-contained-code approach stated in Shovelar v Lane [2011] EWCA Civ 802.

5. The inquiry into injustice was not confined to the circumstances of the offer. It included the fact that the defendant could have avoided all trial costs by accepting the claimant’s favourable offer. On the facts, it was not unjust to award the claimant all her costs.

• Court of Appeal (Civil Division): Allowed the claimant’s appeal and set aside the material parts of the costs order: [2016] EWCA Civ 365.

• High Court, Queen’s Bench Division: The trial judge found the defendant negligent on the failure-to-perform-a-Caesarean allegation but rejected the delivery-management allegation. He made a proportionate costs order excluding costs attributable to the latter allegation: [2015] EWHC 449 (QB).