Ballard v Sussex Partnership NHS Foundation Trust

A withdrawn Part 36 offer no longer attracts the automatic costs consequences of Part 36, but remains an admissible offer to settle that the court must consider when exercising its costs discretion under CPR 44.2(4)(c). An extant Part 36 offer is also a relevant factor, particularly where its terms specify the consequences of failing to beat it. The court must consider the precise wording of the offer. A party may ordinarily rely on a detailed offer being understood according to its terms. Treating a relevant offer as irrelevant amounts to a material misdirection in the exercise of the costs discretion.

The claimant appealed from an order of the Brighton County Court concerning the costs of a quantum-only personal injury trial. Liability had been admitted, but the claimant failed to establish a substantial loss-of-chance claim and recovered £23,315.13 including interest.

The defendant had made an earlier £50,000 Part 36 offer, which it later withdrew, and a subsequent £30,000 Part 36 offer that remained open until shortly before trial. The county court ordered the claimant to pay the defendant’s costs from expiry of the first offer. The central issue was whether the second offer, and its express terms concerning costs, were relevant to the exercise of the costs discretion.

1. Appeal allowed. The county court judge had misdirected himself by treating the second Part 36 offer as irrelevant. The claimant was entitled to her costs up to and including 1 March 2017, but was required to pay the defendant’s costs of the trial.
2. A withdrawn Part 36 offer loses the automatic costs consequences under Part 36. It nevertheless becomes an admissible offer to settle for the purposes of CPR 44.2(4)(c). The earlier offer was therefore potentially relevant to the costs discretion, although it could not itself produce the more or less automatic costs consequences applicable to the extant offer.
3. The second offer was plainly relevant because it remained an unwithdrawn Part 36 offer and carried the automatic consequence that the defendant would ordinarily recover the trial costs under CPR 36.17(3)(a). The judge was required to consider it and its precise terms.
4. The final paragraph of the second offer stated that, if the claimant failed to obtain a more advantageous judgment, the defendant would seek the claimant’s costs from 1 March 2017. The wording did not state that the defendant would also seek costs from the expiry of the first offer. The claimant was entitled to take the detailed offer at face value, particularly where it came from an experienced firm in the relevant field.
5. The judge’s failure to consider the second offer and its wording meant that insufficient attention had been paid to a potentially decisive factor. The discretion therefore had to be set aside and exercised afresh.

• High Court (Queen's Bench Division): Appeal from the Brighton County Court allowed. The claimant was awarded costs up to and including 1 March 2017 and ordered to pay the defendant’s costs of the trial.
• Brighton County Court: On 11 September 2017, the judge ordered the claimant to pay the defendant’s costs from expiry of the first Part 36 offer.