IEH v John Ross Powell

Where a Part 36 offer is accepted after the relevant period, the usual costs consequences may be displaced if they would be unjust. The court must consider all the circumstances, including the factors in Civil Procedure Rules 1998, rule 36.17(5). A child’s age and the uncertainty of the long-term effects of childhood traumatic brain injury may take a case out of the norm, particularly where reliable prognosis depends on development through puberty. Reasonable conduct is relevant but is not decisive. The court must also consider the parties’ conduct in providing information relevant to evaluating the offer and the policy of certainty and encouragement of settlement underlying Part 36.

The claimant, a child who suffered a traumatic brain injury and other injuries in a road accident, accepted the defendant’s Part 36 offer after expiry of the relevant period. The settlement required court approval. The claimant applied for an order disapplying the usual costs consequence under CPR 36.13(5)(b), relying on the uncertainty of prognosis, his age, the time required to obtain further evidence, and other factual circumstances.

The defendant argued that the case involved ordinary litigation contingencies and that the claimant had not shown sufficient injustice. The central issue was whether, having regard to all the circumstances, it would be unjust to impose the usual post-offer costs order.

1. The settlement was approved. The court held that it would be unjust to make the order specified in CPR 36.13(5)(b), although the effect of the claimant’s conduct on the precise costs order was reserved.

2. The factors in CPR 36.17(5), together with all the circumstances, constituted the applicable test. The court considered the terms and timing of the offer, the information available when it was made, the parties’ conduct in providing information, whether the offer was genuine, and the wider purpose of Part 36.

3. The claimant’s status as a child was relevant. In this case, the medical evidence showed that the long-term consequences of the traumatic brain injury could not reliably be assessed until the claimant had passed through puberty and adolescence. That uncertainty was not a normal contingency of litigation and took the case out of the norm.

4. It was appropriate to refuse the offer within the relevant period because the available evidence did not permit an informed assessment of prognosis or valuation. The claimant’s solicitors acted reasonably and proportionately in obtaining further factual and medical evidence. Reasonableness was relevant but was not sufficient by itself to justify departure from the usual rule.

5. The court considered that approval of the settlement in late 2020 would probably have required further evidence and directions. This was relevant to the injustice assessment. The claimant’s residence and education in Morocco and pandemic-related travel difficulties contributed to the evidential difficulty. The later deterioration in the litigation friend’s mental health caused some delay but was not shown to have caused delay in obtaining the evidence.

6. The claimant’s solicitors had failed to provide the defendant with material information about the further evidence obtained after the offer. That conduct was relevant both to the application and to costs. Any resulting adjustment, including the costs of the application, was reserved for further consideration.