ABC v Barts Health NHS Trust

Where a claimant accepts a Part 36 offer after the relevant period has expired, the usual costs order should be departed from only where enforcing it would be unjust. Part 36 is a self-contained code, and the discretion is more constrained than the general discretion under CPR 44.2. The court must consider all the circumstances, including the factors in CPR 36.17(5), but those factors principally concern the making, evaluation and terms of the offer. A defendant that makes an offer expressed to settle the whole claim, without protecting its position on a particular issue, cannot ordinarily obtain an issue-based costs order merely because the claimant pursued that issue and later accepted the offer. The usual order may nevertheless impose indemnity costs for the period after expiry where the claimant acted unreasonably.

The claimant brought a clinical negligence claim concerning delayed treatment of an aortic dissection. Breach was admitted, as was liability for some consequential surgery, but causation of a later catastrophic stroke and inability to undergo renal transplantation remained disputed. Shortly before trial, the claimant accepted the defendant’s Part 36 offer of £50,000, which expressly settled the whole claim. The court approved the settlement under CPR 21.10, but the parties could not agree costs. The defendant sought an issue-based order limiting the claimant’s pre-expiry costs and recovering the costs of the disputed causation issues. The central question was whether the usual order under CPR 36.13(5) would be unjust.

1. Part 36 framework. Part 36 is a separate and self-contained code, as stated in Shovelar v Lane [2012] 1 WLR 637. The discretion under CPR 36.13(5) is constrained by the requirement that the usual order would be unjust and is narrower than the general discretion under CPR 44.2.
2. Relevant circumstances. CPR 36.17(5) directs attention principally to the terms of the offer, when it was made, the information available, the parties’ conduct concerning information, and whether it was a genuine attempt to settle. The court may consider the wider circumstances, but the specific factors focus on the circumstances of making and evaluating the offer.
3. Application. The defendant had the means and opportunity to protect itself against costs arising from the causation issue. It chose to make an offer in settlement of the whole claim and made no revised, causation-limited offer. The claimant acted unreasonably in rejecting the offer and continuing towards trial, but Part 36 provided an effective remedy by requiring payment of the defendant’s post-expiry costs.
4. Disposition. It was not unjust to make the usual order. The defendant was ordered to pay the claimant’s costs up to 25 June 2015 on the standard basis; the claimant was ordered to pay the defendant’s costs from 25 June 2015 to 24 February 2016 on the indemnity basis; and the defendant was ordered to pay the claimant’s costs from 24 February 2016 on the standard basis. Costs were subject to detailed assessment if not agreed.