Swift v Carpenter

Costs following a successful appeal and a Part 36 offer must reflect both the offer’s operative date and the circumstances in which the appeal was developed. A necessary adjournment and reformulation to obtain relevant evidence may justify standard costs before the offer takes effect, with indemnity costs thereafter. Separate applications may attract different orders according to the reason for the application and the legitimacy of the parties’ positions. Interest on additional damages and costs must be proportionate. Relevant factors include the time since the offer, the quality and reasonableness of the defence, and disruption to the claimant. An award need not exceed compensation merely to encourage settlement. Here, 4.5% interest and a £500,000 interim payment were ordered, and permission to appeal was refused.

This was a costs and permission judgment following Charlotte Swift’s appeal from the High Court judgment of Mrs Justice Lambert DBE, reported at [2018] EWHC 2060 (QB). The Personal Injuries Bar Association intervened. The respondent conceded the application of CPR 36.17(4), the associated uplift, indemnity costs after the operative Part 36 offer, and recovery of interest. The remaining issues concerned the division of appeal costs around an adjournment and reformulation of the case, the costs of evidence applications, the appropriate interest rates on additional damages and costs, an interim payment, and permission for a further appeal.

The Court of Appeal treated the appellant as successful in the appeal and determined the consequential costs, interest and permission issues.

1. Costs of the appeal. The adjournment and reformulation of the case added costs, but were necessary to place the relevant evidence before the court and to reach an enduring and workable conclusion. The court distinguished Cheeseman v Bowaters [1971] 1 WLR 1773 on that basis. The appellant was awarded standard costs up to the date on which her July 2019 Part 36 offer took effect, and indemnity costs from 23 July 2019. Efforts to settle after the adjournment did not affect costs incurred before it.
2. Evidence applications. The appellant was ordered to pay the costs of her application to call Messrs Cropper and Smith because it resulted from an admitted misunderstanding of the existing directions. That order concerned the application only, not the witnesses’ instruction, reports or attendance. The respondent’s application concerning Mr Robinson was refused. His evidence was relevant, but the application was late and the appellant was entitled to resist it. The application costs were caught by the later Part 36 offer.
3. Interest. Applying the proportionality approach identified in OMV Petrom SA v Glenmore International SG [2017] 1 WLR 3465, the court considered the period since the offer, the respondent’s conduct and the disruption caused to the appellant. The respondent had not taken entirely bad points, and there was no need to award interest above a purely compensatory rate to encourage settlement. Interest was fixed at 4.5% on the additional damages and on costs.
4. Orders. An interim payment of £500,000 was ordered against costs and interest. Permission to appeal was refused, and the parties were directed to prepare a draft order.

1. Court of Appeal (Civil Division): Determined the costs and interest consequences of the successful appeal, ordered an interim payment, and refused permission to appeal.
2. High Court of Justice, Queen’s Bench Division: Mrs Justice Lambert DBE gave the judgment appealed from, reported at [2018] EWHC 2060 (QB).