JMX (A child by his Mother and Litigation Friend, FMX) v Norfolk and Norwich Hospitals NHS Foundation Trust

Where a claimant obtains an outcome at least as advantageous as a Part 36 offer, the consequences in CPR rule 36.17(4) are the default. The court may depart from them only where ordering them would be unjust, applying all the circumstances in CPR rule 36.17(5).

A 90% offer is capable of being a genuine settlement offer. The court should ordinarily avoid a post-trial mini-trial into the parties’ assessment of litigation risk, and should take a broad-brush view informed principally by the case it has tried. Genuine without-prejudice negotiations ordinarily remain privileged. Enhanced interest on indemnity costs is discretionary; the maximum uplift is not automatic.

The claimant succeeded on liability in the substantive clinical negligence proceedings, with damages to be agreed or assessed. Before trial, he offered under Part 36 to accept 90% of his damages. The defendant did not accept the offer and contested liability.

After judgment, the claimant sought the consequences under CPR rule 36.17, including indemnity costs, enhanced interest and an additional amount. The defendant argued that the offer was not a genuine attempt to settle because it did not reflect a realistic assessment of litigation risk. The court also considered the appropriate rate of interest on indemnity costs.

1. Part 36 consequences. The claimant achieved an outcome at least as advantageous as his offer. Accordingly, indemnity costs after expiry of the relevant period, interest on those costs and an additional amount were the default consequences under CPR rule 36.17(4), subject to injustice.
2. Genuine settlement offer. The 90% offer was a genuine offer to settle. A modest discount can provide certainty and save substantial damages and trial costs. The absence of an explanation in the offer letter for the 10% discount did not make the offer non-genuine.
3. Assessment of litigation risk. The court should ordinarily avoid reconstructing, after trial, how the case ought to have appeared to the offeror before the offer. That would resemble a mini-trial. The proper approach is broad-brush and informed largely by the judge’s assessment of the strength of the case just tried. Clinical negligence litigation is not invariably so hazardous that a 90% offer cannot be genuine.
4. Without-prejudice negotiations. The content of genuinely settlement-oriented discussions is ordinarily privileged. Although a failure to negotiate may affect the exercise of discretion, the content of privileged negotiations generally should not be disclosed to the trial judge and was of no assistance here.
5. Interest. Enhanced interest under CPR rule 36.17(4)(c) is discretionary and the maximum of 10% above base rate is not automatic. The court awarded interest on indemnity costs at 5% above base rate from 28 October 2017.
6. Disposition. The normal Part 36 consequences were ordered. The defendant’s decision to contest the claim was not unreasonable and the costs order did not condemn that decision.