MGS v University Hospitals Bristol and Weston NHS Foundation Trust

A Part 36 offer may provide contractually for interest after expiry of the relevant period. The term must be construed objectively in the context of Part 36. Where the offer is accepted late, interest may accrue on the entire settlement sum, including an amount representing future losses, because the claimant was deprived of the agreed sum during the delay. The applicable rate depends on the offer’s proper construction. A judgment-debt rate will not be implied where the offer is silent and the rate would represent a substantial departure from the rate previously accruing. For a protected party, settlement approval is an exercise of judgment directed to the person’s best interests and operates as an external check on the settlement’s propriety.

This was a personal injury claim brought by a child and protected party against the NHS Foundation Trust responsible for the treating hospital. Liability had been admitted, leaving quantum to be resolved. The claimant made a Part 36 offer comprising a lump sum and periodical payments. The defendant accepted it after expiry of the 21-day relevant period.

The court determined whether interest was payable during the period of late acceptance, the applicable rate, and whether the proposed settlement required approval under CPR 21.10 because the claimant was a protected party.

1. Interest on late acceptance. The court construed the Part 36 offer as a contract in the context of the self-contained Part 36 code. The offer term objectively meant that interest would accrue on the entire offer sum after expiry of the 21-day period. The claimant was deprived of the agreed settlement sum during the delay, including the part representing future losses. That was compensable interest for loss of possession of money, rather than interest on future loss as such.
2. The ordinary principles of contractual interpretation applied. The court considered the meaning which an informed and reasonable observer would attribute to the offer. The defendant’s argument that interest should be calculated only by conventional personal injury principles was rejected.
3. Rate of interest. The claimant was not entitled to the 8 per cent judgment-debt rate under section 17 of the Judgments Act 1838. The offer did not specify that rate, and it represented a significant departure from the rate at which interest had previously accrued. The applicable rate was the special investment account rate, as accepted by the defendant and ultimately agreed between the parties.
4. Approval. Under CPR 21.10, settlement of a claim by or on behalf of a protected party requires court approval. Approval engages judicial judgment and requires consideration of justice, the protected person’s best interests and the overriding objective. Following Dunhill v Burgin [2014] UKSC 18, the hearing provides an external check on the propriety of the settlement. The proposed lump sum and periodical-payment structure was found to be sensible and in the claimant’s best interests.
5. The settlement was approved under CPR 21.10. The agreed interest was quantified in the final order.

First-instance decision; no appellate decision is stated in the judgment.