MEF v St George's Healthcare NHS Trust

A Calderbank offer to settle detailed assessment proceedings does not automatically lapse when the hearing begins. Its duration depends on whether, objectively and in context, a reasonable time for acceptance has expired. The court must consider the nature of detailed assessment, the parties’ conduct, the offer’s terms and the available costs protection. There is no direct read-across from the Part 36 regime, which expressly requires permission for acceptance during a hearing, to an ordinary contractual offer. An offer may remain open during the hearing unless withdrawn or otherwise limited. Where an offer requires agreement to pay the offeror’s costs in principle, those costs may be assessed if not agreed; it does not ordinarily require prior agreement of the precise figure. Acceptance on those terms creates a binding settlement.

The Defendant appealed from an order of Master Rowley dated 19 September 2019 concerning the detailed assessment of the Claimant’s costs. The Defendant had made an offer of £440,000, subject to the Claimant agreeing to pay the Defendant’s costs of detailed assessment incurred since 27 September 2018. The detailed assessment hearing began on 17 September 2019. The Claimant accepted the offer by email during the second day, when it had become apparent that the assessment might produce a lower figure.

The issues were whether the offer had lapsed when the hearing commenced and whether acceptance required prior agreement of the precise amount of the Defendant’s costs.

1. Appeal dismissed. The August 2019 offer was governed by ordinary common-law principles of offer and acceptance, not by CPR Part 36.
2. The question whether the offer had lapsed was whether a reasonable time for acceptance had expired. That was an objective question of fact, assessed in the contractual context and by reference to all the circumstances.
3. Detailed assessment proceedings are distinctive because the parties can recalculate the likely result as the hearing proceeds. The availability of Part 36 did not justify importing its rule requiring permission to accept an offer once a hearing was in progress. Part 36 is a self-contained code, and there was no direct read-across to a Calderbank offer.
4. The history of the offers showed no absolute time limit. The Defendant had repeatedly maintained or reinstated the £440,000 offer and had retained the ability to withdraw it. The offer also preserved costs protection: the Claimant would pay the Defendant’s costs incurred since 27 September 2018, while an unaccepted offer could be considered on costs under CPR 44.2(4).
5. The offer therefore remained open during the detailed assessment hearing. It could have been made time-limited or withdrawn, including after the hearing began.
6. On construction, the condition required agreement in principle to pay the Defendant’s costs since 27 September 2018, with those costs to be assessed if not agreed. Requiring prior agreement of the precise figure would make immediate unilateral acceptance impossible and would produce an unenforceable agreement to agree. The Claimant’s email validly accepted the offer and created a binding settlement.

• High Court (Queen’s Bench Division): appeal from an order of Master Rowley, Costs Judge, dated 19 September 2019. Appeal dismissed.