JLE v Warrington & Halton Hospitals NHS Trust Foundation Trust

Under the Civil Procedure Rules 1998, the court may assess separately whether injustice justifies withholding each consequence under rule 36.17(4), although different outcomes will be unusual. In a monetary claim, an offer is at least as advantageous if it is beaten by any amount, however small. The margin by which the offer was beaten cannot therefore justify withholding an award. A substantial reduction of a costs bill, or difficulty in valuing a bill before detailed assessment, will not ordinarily establish injustice. The additional amount under rule 36.17(4)(d) is prescribed and is not a compensatory bonus. The court held, obiter, that it is payable in full or not at all.

The claimant appealed from an order of Master McCloud in the Senior Court Costs Office following detailed assessment of a clinical negligence costs bill. The claimant’s Part 36 offer was beaten by just under £7,000. The Master awarded the consequences under rule 36.17(4)(a)–(c), but withheld the additional amount under rule 36.17(4)(d) on the ground that it would be unjust.

The appeal concerned whether the injustice test could be applied separately to the consequences under rule 36.17(4), and whether the Master had properly exercised that discretion.

The court granted permission to appeal out of time and allowed the appeal.

1. Rule 36.17(4) permits the court to consider separately whether injustice justifies withholding each of the consequences in subparagraphs (a) to (d). A different outcome for different consequences will, however, be unusual. The court was reinforced in that conclusion by OMV Petrom SA v Glencore International AG [2017] EWCA 195, although the relevant observation in that case was obiter.
2. Rule 36.17(1)(b) and (2) make clear that an offer is at least as advantageous if it is beaten by any amount, however small. The margin by which the offer was beaten was therefore inadmissible as a reason for withholding the additional amount. Reliance on that margin would reintroduce the uncertainty removed after Carver v BAA plc [2008] EWCA Civ 412.
3. The Master also erred in treating the substantial reduction of the bill, and the resulting difficulty in pitching a costs offer, as reasons for injustice. Costs cases are not subject to a different Part 36 regime merely because disclosure is limited. Cashman v Mid Essex Hospital Services NHS Trust [2015] EWHC 1312 (QB) supported that conclusion, subject to the possibility that an inflated bill causing investigation costs before the offer might justify withholding the award. No such finding had been made. The reasoning in SG v Hewitt [2012] EWCA Civ 1053 was distinguished as fact-specific.
4. The additional amount is not compensatory. Its penal and settlement-incentive purpose, recognised in OMV Petrom SA v Glencore International AG [2017] EWCA 195, meant that its size relative to the margin could not itself establish injustice. The Master’s three reasons were therefore inadmissible, and there was nothing unjust in awarding the amount.
5. The court observed, strictly obiter, that the prescriptive wording of rule 36.17(4)(d) requires the prescribed percentage to be awarded in full if the provision applies. The question whether a lesser percentage could be awarded had not been raised below and was not decided as part of the appeal. The additional 10% was awarded.

1. Senior Court Costs Office Master McCloud made an order on 20 December 2018 following detailed assessment. The claimant had beaten her own Part 36 offer, but the Master declined to award the additional amount under rule 36.17(4)(d).
2. High Court (Queen's Bench Division) The appeal was allowed. The Master had erred in principle, and the additional 10% was awarded.