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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Carver v BAA Plc [2008] EWCA Civ 412 (22 April 2008) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2008/412.html Cite as: [2008] EWCA Civ 412, [2009] WLR 113, [2008] LS Law Medical 351, [2008] 3 All ER 911, [2008] CP Rep 30, [2009] 1 WLR 113, [2008] PIQR P15 |
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2008 ] EWCA Civ 412 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Central London County Court
His Honour Judge Knight QC
6BM03600
Strand, London, WC2A 2LL |
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2008![]() |
B e f o r e :
LORD JUSTICE RIX
and
LORD JUSTICE KEENE
____________________
LISA CARVER![]() |
Appellant |
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| - and - |
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BAA PLC |
Respondent |
____________________
WordWave International Limited
A Merrill Communications Company
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Mr John Snowden (instructed by Messrs Barlow Lyde and Gilbert ) for the Respondent
Hearing dates : 14 January
2008
____________________
Crown Copyright ©
Lord Justice Ward:
Introduction
The Civil Procedure Rules
"(1) This Rule applies where at trial a claimant –
(a) fails to better a Part 36 payment; or
(b) fails to obtain a judgment which is more advantageous than a defendant's Part 36 offer. [Emphasis added.]
(2) Unless it considers it unjust to do so, the court will order the claimant to pay any costs incurred by the defendant after the latest date on which the payment or offer could have been accepted without needing the permission of the court."
"(1) This Rule applies where upon judgment being entered –
(a) a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer; or
(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer.
(2) Subject to paragraph (6), where Rule 36.14(1)(a) applies, the court will, unless it considers it unjust to do so, order that the defendant is entitled to –
(a) his costs from the date on which the relevant period expired; and
(b) interest on those costs.
(3) Subject to paragraph (6), where Rule 36.14(1)(b) applies, the court will, unless it considers it unjust to do so, order that the claimant is entitled to –
(a) interest on the whole or part of any sum of money (excluding interest) awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;
(b) his costs on the indemnity basis from the date on which the relevant period expired and
(c) interest on those costs at a rate not exceeding 10% above base rate.
(4) In considering whether it would be unjust to make the orders referred to in paragraph (2) and (3) above, the court will take into account all the circumstances of the case including –
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made; and
(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling an offer to be made or evaluated.
...
(6) Paragraphs (2) and (3) of this Rule do not apply to a Part 36 offer –
(a) that has been withdrawn;
(b) that has been changed so that its terms are less advantageous to the offeree, and the offeree has beaten the less advantageous offer;
(c) made less than 21 days before the trial, unless the court has abridged the relevant period."
"The Rule now uses the expressions more advantageous than a defendant's Part 36 offer and at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer. Different consequences follow. In particular the entitlement, unless the court considers it unjust, to the enhancement provisions of r. 36.14(3) are not available to the defendant.
These provisions are designed as an incentive to encourage claimants to make and defendants to accept appropriate offers of settlement. Such incentive would be deprived of effect unless the non-acceptance of that which ultimately proves to have been a sufficient offer ordinarily will advantage the claimant in the respects set out in the rule. ..."
The brief facts of this case
Carver
was an air hostess flying in and out of Gatwick Airport. On making her way to the airport terminal building on 31st March 2003 she stepped into a lift which, due to a mechanical defect, had stopped some 2 feet below floor level. Miss
Carver
fell heavily on the left side of her body and injured her left ankle. She was taken to the Accident and Emergency department of the local hospital where X-rays were taken and she was told she had a ligament injury to that ankle. She attended her general practitioner and was away from work for about four weeks.
BAA
, as the body responsible for the safety of the airport, conceded liability and indicated a willingness to consider any reasonable claim. On 17th November 2003 Miss
Carver
's solicitors sent a medical report from a Dr Goves of soft tissue injuries and they submitted a schedule of loss amounting to £2,170. On 9th February 2004
BAA
made an interim payment in the sum of £520 to cover the costs of physiotherapy and chiropractor treatment. Time passed. In the summer of 2004 Miss
Carver
consulted her chosen orthopaedic expert, Mr Chohan and his reports were referred to
BAA
. On 17th November 2005
BAA
wrote making what was called a "Part 36 offer" observing that Miss
Carver
had not appeared to suffer a significant injury although on the basis of those medical reports she would suffer some ache or discomfort from time to time from what was a soft tissue injury to the left ankle.
BAA
took the view that the appropriate amount of general damages was £3,000 and they offered a global settlement of £3,486 on a Part 36 basis open for acceptance for 21 days, that sum being in addition to the £520 already paid, so that offer was worth £4,006.
Carver
was not content with that offer and considered it necessary to instruct another expert with specialist knowledge of ankle injuries. In March 2006 her solicitors submitted Mr Gillham's report and on 21st March 2006 brought her claim for damages in excess of £5,000 but less than £15,000 against
BAA
. She relied on Mr Gillham's reports and submitted a schedule of her past and future expenses and losses in an amount of £2,170.30.
Carver
's pregnancy and that the effect of the accident was limited to seven weeks off work and no more than mild symptoms thereafter.
"In so far as our client's payment into court is concerned, how far apart are we? Surely you must have valued your client's claim now and have some idea as to how much she seeks to recover – perhaps you would enlighten us. What value does your client place on general damages?"
"In an attempt to bring this case to a conclusion now our clients are prepared to offer your client the sum of £20,000 in full and final settlement of her claim all inclusive of damages, interest and costs."
The claimant wrote without prejudice but as a formal offer to settle pursuant to Part 36.2 of CPR:
"We refer to previous correspondence and can confirm that we have now quantified our client's claim and formally offer to settle at £12,500 on a global basis plus the claimant's costs on a standard basis ... "
The solicitors with conduct of the case then spoke following which conversation the claimant's solicitors withdrew her Part 36 offer of £12,500 but then indicated a willingness to accept £20,000 plus the claimant's costs on a standard basis.
The hearing before His Honour Judge Knight QC
"In my judgment this claim is a modest claim. It is not, I think, one which would warrant an award of the order of £5,500 at all. I think that would be excessive. And making due allowance for the continuing discomfort, and that is a critical matter in my view, the appropriate award which I make is £3,500."
He made no award for Smith
v
Manchester damages and awarded £935.30 for special damage and future loss. Judgment was accordingly entered for the claimant for £4,686.26 inclusive of interest.
"13. So far as the claimant's position is concerned, I take the view that this is a claim where they have not succeeded in obtaining a judgment more advantageous than the defendant's Part 36 offer. Having regard to such exchanges and conduct which I am entitled to, this case, it seems to me, ought never to have been fought and that the lack of response following the Part 36 offer and the way in which the matter has been conducted between June 2006 and today, in my view, has been highly regrettable and it is that which I have regard to in coming to the conclusion that the claimant has failed to secure a judgment more advantageous than the position it was in upon receipt of the Part 36 payment into court. On no view does it seem to me can it be said that for an excess of a few pounds within a margin of £50-£87 odd could it be said that the monetary judgment obtained today is more advantageous than the position in June of last year. I say that, of course, without making any judgment upon the responsibility for the change in approach by the claimant upon receiving different advice.
14. It seems to me that this was always a fast track case and it should have proceeded accordingly. If the claimant has changed her position on receipt of different advice from different consultants, that is a risk she has to assume and in my judgment that cannot affect or colour the view that I have taken, that in this case the position of the claimant today is not more advantageous than it was in June of last year. And I would invoke the rule in 36.14(2) and find that it would be unjust to make the defendants pay the cost. In my view, they are in practical terms the successful party in this litigation and I think what flows on from that is that they should get their own costs and they have applied for their costs from 27th June last year at the latest and I propose to award them their costs. I propose to award them though on the standard basis and not on the indemnity basis. Although a lot can be said about the conduct of the claimant in pursing this litigation the way it has been concluded, I am not persuaded that under CPR 44 it would warrant an award of indemnity costs.
15. The defendant has also submitted that between November 2005 and June 2006 there should be no order as to costs. The reason for that was that there was a pre-issue offer of £4,006, which again is adjacent to the sum awarded in this case. I find that a very powerful argument and certainly one which of itself and in conjunction with the other matters, indicates a failure to pursue this claim in the way I think it should have been pursued between admission of liability and issue, and justifies me in acceding to that suggestion and I make no order as to costs between November 2005 and June 2006.
16. The costs prior to that, as from the letter of claim, up to November 2005 I propose to award to the claimants on the fast track costs basis."
Discussion
"7 – (2) Where a Part 36 offer or Part 36 payment was made before 6th April 2007, if it would have had the consequences set out in the Rules of Court contained in Part 36 as it was in force immediately before 6th April 2007, it will have the consequences set out in Rules 36.10, 36.11 and 36.14 after that date."
It is, therefore, common ground that the new rule governs the outcome of this case.
v
Neave [2003] EWCA Civ 325, an unhappy family dispute between mother and son, mother sought the recovery of nine vehicles. The judge upheld her claim in respect of five of those vehicles. The effect of the judgment was that mother recovered four of the five vehicles which she sought under a Part 36 offer she had made and two more. The question was whether that offer was more advantageous than the judgment. Chadwick L.J. approached that question as follows:
"35. In order to decide whether the judgment was more advantageous to her than the proposals it is necessary, as it seems to me, only to ask whether the recovery of the two vehicles which she had not sought by her proposals - vehicles (a) and (d) - together with £3,000 by way of damages, was more advantageous than the recovery of the single vehicle - vehicle (h), the Norton motor cycle - which she had sought by the proposals but had not recovered by the judgment. On a simplistic level it might be thought that to recover £3,000 and two vehicles was likely to be more advantageous to the person making the recovery than recovering no money and one vehicle. But, if the matter is to be dealt with on a more refined basis then it is necessary to attribute some value to the two vehicles which Mrs Neave did recover under the judgment and the one vehicle which she had sought and did not recover under the judgment.
...
38. ... On the basis of the material that was before the judge, what Mrs Neave recovered under the judgment was at least £2,500 more advantageous to her than what she had been prepared to accept under the proposals made in 2001."
This case, submits Mr Coughlan, supports his submission that the question whether the judgment is more advantageous has to be answered in strictly financial terms and here the claimant recovered more money than was in court.
v
Tudor Rose (a firm) [2007] EWCA Civ 368, a case upon which Mr Snowden relies, Waller L.J. said this:
"2. The key issue is whether the judge misdirected himself. It is well known that this court will be loath to interfere with the discretion exercised by a judge in any area but so far as costs are concerned that principle has a special significance. The judge has the feel of a case after a trial which the Court of Appeal cannot hope to replicate and the judge must have gone seriously wrong if this court is to interfere.
3. I should perhaps start by saying that in the pre-CPR world one would have had no hesitation is saying the judge must have gone wrong. A payment into court was the touchstone in relation to costs – if it was beaten by a plaintiff, the plaintiff got their costs; if the plaintiff failed to beat it the defendant got their costs. There was hardly an exception to that rule.
4. The position under the CPR is not the same. ...
...
10. Other Court of Appeal decisions were cited to us. I do not gain much assistance from them. In the area of costs, where all cases are different and fact specific, I would suggest that authorities apart from those that lay down clear principles are of little assistance. It is to the rules that one should go, and it is by reference to the rules that one should test whether the judge has gone wrong in any particular case."
v
Stone [2007] EWCA Civ 1354 where she observed in paragraph 82:
"... In these days where both sides are expected to conduct themselves in a reasonable way and to seek agreement where possible, it may be right to penalise a party to some degree for failing to accept a reasonable offer or for failing to come back with a counter offer."
v
Associated Newspapers Ltd was reported at [
2008
] 1 All E.R. 240. This was a case where CPR 36.14(1)(b) arose because there the claimant, a Member of Parliament, had made a Part 36 offer by which the defendant was to pay him £4,999 and publish an apology for a libellous article in the Mail on Sunday. The defendant did not respond. A jury eventually returned a verdict in the claimant's favour and awarded £5,000. In considering whether the judgment was more advantageous, Eady J. applied the following observation of Sir Thomas Bingham M.R. in Roache
v Newsgroup Newspapers Ltd [1998] E.M.L.R. 161:
"The judge must look closely at the facts of the particular case before him and ask: who, as a matter of substance and reality, has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to a finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?"
Eady J. took into account the concern and distress for the claimant in the eleven month period leading up to and including a public hearing during which his reputation was attacked in the process of attempting to justify the libel. In purely financial terms the jury's award would appear to be less advantageous than the figure he had proposed in his offer. It was also appropriate to compare the worth of an unqualified apology against the number of matters adverse to the claimant which emerged in the course of the trial and would not have seen the light of day had the offer been accepted. They put the claimant in a less favourable light than would a bland and unqualified apology. In the result the judge found that he was unable to conclude that the offer made was "at least as advantageous" as the ultimate outcome and consequently he did not consider that CPR 36.14 applied in that particular instance.
Lord Justice Rix:
Lord Justice Keene: