University Hospitals of Derby & Burton NHS Foundation Trust v Rebecca Harrison

For QOCS under CPR r.44.14(1), a settlement reached by accepting a Part 36 offer does not become an order for damages and interest merely because the court gives permission for late acceptance and directs a deduction for post-offer recoverable benefits under r.36.22(9). The direction adjusts the settlement. It does not assess or award damages.

The payer’s obligation arises under the accepted offer and is enforced through the Part 36 procedure. A defendant’s costs order following late acceptance cannot therefore be set off against the settlement under r.44.14(1). A contrary construction would elevate the form of an ancillary order over the substance of the settlement.

The claimant brought a clinical-negligence claim against the NHS trust. The trust made a Part 36 offer of £421,362.88. After the relevant period expired, the claimant sought permission to accept it because further deductible benefits had accrued.

HHJ Sephton KC, sitting as a High Court judge in the King’s Bench Division, granted permission, directed deductions under CPR r.36.22(9), and identified a net sum payable of £298,156.16. He ordered the claimant to pay the trust’s post-offer costs, but held that the trust could not set off or enforce that costs order under the QOCS regime.

The trust appealed. The central issue was whether that order was an order for damages and interest made in favour of the claimant for the purposes of CPR r.44.14(1).

1. Appeal dismissed. Coulson LJ, with whom Stuart-Smith and Snowden LJJ agreed, held that the order made under CPR r.36.22(9) was not an order for damages and interest made in favour of the claimant within r.44.14(1). The claimant retained QOCS protection.

2. Part 36 is a self-contained procedural code. Following late acceptance, the court had two binary questions: whether to permit acceptance and whether to direct the agreed amount of post-offer deductible benefits to be deducted. It neither assessed damages nor ordered the trust to pay damages. The direction merely adjusted the settlement by allocating part of the offered sum to the Department for Work and Pensions.

3. The obligation to pay arose from the accepted Part 36 offer, not from the order. If payment were not made, the claimant’s remedy would be to enter judgment under r.36.14(7). The statement of the resulting net sum in the order could not independently be enforced.

4. The authorities supported that conclusion. The Part 36 analogy in Cartwright was obiter, but a Part 36 settlement and a Tomlin-order settlement were materially alike for this purpose. In Adelekun v Ho [2021] UKSC 43, the Supreme Court treated a Part 36 settlement as producing no order for damages or interest under r.44.14(1). It did not treat the form in which a settlement was recorded as decisive.

5. A contrary construction would make QOCS depend on an ancillary procedural form rather than the substance of the settlement. It could disproportionately affect claimants needing approval, provisional damages, periodical payments, or deductions for benefits. The current wording of r.44.14(1) did not cover agreements to pay. A proposed amendment could not alter its present meaning.

• Court of Appeal (Civil Division) — appeal dismissed: [2022] EWCA Civ 1660.
• King’s Bench Division — HHJ Sephton KC, sitting as a High Court judge, permitted late acceptance of the Part 36 offer, directed deductions for recoverable benefits, made costs orders, and preserved the claimant’s QOCS protection.