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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Crouch v King's Healthcare NHS Trust [2004] EWCA Civ 1332 (15 October 2004) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2004/1332.html Cite as: [2005] PIQR Q4, [2005] WLR 2015, [2005] Lloyd's Rep Med 50, (2005) 83 BMLR 47, [2005] CP Rep 10, [2005] 2 Costs LR 200, [2004] EWCA Civ 1332, [2005] 1 WLR 2015, [2005] 1 All ER 207 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ?????
His Honour Judge Latham and Mr Justice Wright
WT191141 and HQ02X00531
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE MANCE
and
SIR CHRISTOPHER STAUGHTON
____________________
Peter Crouch |
Respondent |
|
- and - |
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King's Healthcare NHS Trust |
Appellant |
____________________
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
Simeon Maskrey QC (instructed by Osborne, Morris & Morgan) for the Respondent in Murry. Mr Maskrey QC also assisted the Court in Crouch
____________________
Crown Copyright ©
Lord Justice Waller :
“This offer is open for 21 days from the date you receive this letter which we calculate as until close of business on 29 August 2003. We also agree to pay the Claimant's reasonable costs up until acceptance of it on or before the same date.
Should your client decide to accept this offer after 29 August 2003 then we will agree he may do so only on the basis that your client will be responsible both for their own costs and for our reasonable costs thereafter or we otherwise agree liability for costs or with leave of the court.
Please note that we do not intend to pay the amount of our offer into court. Please further note that as we are a public authority you should be in no doubt that we will pay the amount of our offer if the claimant accepts it in accordance with the terms on which we make the offer. With regard to the Court's power to exercise discretion on the matter of costs in these circumstances we respectfully refer you to Amber v Stacey [2001] 2 All ER.
Please acknowledge safe receipt of this letter.”
“Please note that for the following reasons the Defendant does not intend to pay the amount of its offer into Court:
1. the Defendant is an NHS public authority. You should therefore be in no doubt that its offer is a genuine one that it will pay promptly if the Claimant accepts it in accordance with the terms on which we make the offer; and
2. as an NHS public authority the Defendant respectfully submits that rather than paying NHS funds into Court, it is preferable for the amount of its offer (which would be paid out of NHS funds) to continue to be available for provision of patient services pending resolution of this case either by agreed terms of settlement or Court Order.
3. as an NHS body, there is no doubt that the Defendant will be able to pay the amount of its offer. We respectfully refer you to the National Health Service (Residual Liabilities) Act 1996 which by Section 1 provides that:
(1) If a National Health Service trust, a Health Authority or a Special Health Authority ceases to exist, the Secretary of State must exercise his statutory powers to transfer property, rights and liabilities of the body so as to secure that all of its liabilities are dealt with.
(2) For the purposes of subsection (1), a liability is dealt with by being transferred to:
The Secretary of State
(a) a National Health Service trust
(b) a Health Authority; or
(c) a Special Health Authority
You will appreciate that the Court has the power to exercise discretion on the matter of costs in these circumstances and we respectfully refer you to Southampton Container Terminals Ltd v Schiffahrisgesellsch “Hansa Australia” MGH & Co (The MV “Maersk Colombo”) (2001) 2 Lloyd's Rep 275.
Please acknowledge safe receipt of this letter.”
The provisions of Part 36 and Part 44
“36.1 (1) This Part contains rules about –
(a)offers to settle and payments into court; and
(b)the consequence where an offer to settle or payment into court is made in accordance with this Part.
(2) Nothing in this Part prevents a party making an offer to settle in whatever way he chooses, but if that offer is not made in accordance with this Part, it will only have the consequences specified in this Part if the court so orders.
Part 36 offers and Part 36 payments – general provisions
36.2 (1) An offer made in accordance with the requirements of this Part is called –
(a) if made by way of a payment into court, “a Part 36 payment”;
(b) otherwise “a Part 36 offer”
(2) The party who makes an offer is the “offeror”
(3) The party to whom an offer is made is the “offeree”
(4) A Part 36 offer or a Part 36 payment –
(a) may be made at any time after proceedings have started; and
(b) may be made in appeal proceedings.
(A defendant's offer to settle a money claim requires a Part 36 payment)
“36.3 (1) Subject to rules 36.5(5) and 36.23, an offer by a defendant to settle a money claim will not have the consequences set out in this Part unless it is made by way of a Part 36 payment.
(2) A Part 36 payment may only be made after proceedings have started.
Form and content of a Part 36 offer
36.5 (1) A Part 36 offer must be in writing.
(2) A Part 36 offer may relate to the whole claim or to part of it or to any issue that arises in it.
(3) A Part 36 offer must-
(a) state whether it relates to the whole of the claim or to part of it or to an issue that arises in it and if so to which part or issue;(b) state whether it takes into account any counterclaim; and(c) if it is expressed not to be inclusive of interest, give the details relating to interest set out in rule 36.22(2).
(4) A defendant may make a Part 36 offer limited to accepting liability up to a specified proportion
(5) A Part 36 offer may be made by reference to an interim payment.
(6) A Part 36 offer made not less than 21 days before the start of the trial must-
(a) be expressed to remain open for acceptance for 21 days from the date it is made; and(b) provide that after 21 days the offeree may only accept it if-
(i) the parties agree the liability for costs; or
(ii) the court gives permission.
(7) A Part 36 offer made less than 21 days before the start of the trial must state that the offeree may only accept it if-
(a) the parties agree the liability for costs; or
(b) the court gives permission.
(8) If a Part 36 offer is withdrawn it will not have the consequences set out in the Part.
Notice of a Part 36 payment
36.6-(1) A Part 36 payment may relate to the whole claim or part of it or to an issue that arises in it.
(2) A defendant who makes a Part 36 payment must file with the court a notice (“Part 36 payment notice”) which-
(a) states the amount of the payment;(b) states whether the payment relates to the whole claim or to part of it or to any issue that arises in it and if so to which part or issue;(c) states whether it takes into account any counterclaim;(d) if an interim payment has been made, states that the defendant has taken into account the interim payment; and(e) if it is expressed not to be inclusive of interest, gives the details relating to interest set out in rule 36.22(2)
(3) The offeror must-
(a) serve the Part 36 payment notice on the offeree; and(b) file a certificate of service of the notice.
(4) [omitted]
(5) A Part 36 payment may be withdrawn or reduced only with the permission of the court.
Costs consequences where claimant fails to do better than a Part 35 offer or a Part 36 payment
36.20-(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.
(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.”
“Court's discretion and circumstances to be taken into account when exercising its discretion as to costs
44.3-(1) The court has discretion as to –
(a) whether costs are payable by one party to another;
(b) the amount of those costs; and
(c) when they are to be paid.
(2)If the Court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order.
(4)In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention (whether or not made in accordance with Part 36)
(5)The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended his case or a particular allegation or issue;
(d) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim.”
THE FACTS OF THE CROUCH APPEAL
THE MURRY APPEAL
“For the avoidance of doubt we accept the offer of 21st February 2003, which offer has never been withdrawn whether with or without the permission of the court”
“The view that I have come to therefore is a situation I regard as a) unusual and b) difficult. By effectively asking for and receiving the indulgence sought in their letter of 21st February, Messrs Hempsons did indeed give an undertaking implicit, if one wishes to put it that way, that they would not withdraw the offer otherwise and in accordance with the terms of Part 36 as though the offer had been converted into a payment into court and that therefore they would not withdraw it otherwise than with permission.”
But before giving fuller reasons I should consider the position of letters offering money sums in settlement where those sums could and on one view should have been paid into court to obtain or suffer the consequences envisaged by Part 36.
DISCUSSION ON STATUS OF THE OFFER LETTERS
“39 . . . Clear though it is that the claimant behaved thoroughly unreasonably from first to last, and tempting though it is therefore to uphold the recorder's order in full measure, I share Sir Anthony Evans's view that it was wrong to treat the letter of 1 October 1997 for all the world as though it constituted a payment into court. There are to my mind compelling reasons of principle and policy why those prepared to make genuine offers of monetary settlement should do so by way of CPR Pt 36 payments. That way lies clarity and certainty, or at any rate greater clarity and certainty than in the case of written offers.
41. Payments into court have advantages. They at least answer all questions as to (a) genuineness, (b) the offeror's ability to pay, (c) whether the offer is open or without prejudice, and (d) the terms of which the dispute can be settled. They are clearly to be encouraged, and written offers, although obviously relevant, should not be treated as precise equivalents.”
“81. In order to evaluate that submission it is necessary to consider the facts, the relevant provisions of the CPR, the way in which the Judge exercised his discretion and the decision in Amber v Stacey. The facts may be shortly stated. On May 27 1999 the defendant's solicitors wrote to the claimants' solicitors on behalf of their clients offering £956,867, plus interest at 8 per cent from Feb 19 1995 until the date of payment, plus costs in full and final satisfaction of the claimants' claims. The offer was stated to be open for 21 days which, for the avoidance of doubt, was said to be up to and including June 17 1999. The claimants expressly reserved the right to draw the letter to the attention of the Court on the question of costs. It was thus what we used to call an open offer and what is often known as a Calderbank offer.
82. On June 9 1999 the defendants served a notice to admit the fact that the crane would not have been struck if it had been parked at anchor position 223.5 at the time of the collision. On June 11 the defendants admitted liability subject to an allegation of contributory negligence. On the same day, they wrote saying that their offer would remain open after June 17 1999, but stated that if the claimants wished to accept the offer after that date they could only do so if the parties agreed the liability for costs or if the Court gave permission. That last point was, I think, included because of the provisions of CPR 36.5(6). On June 22 the claimants wrote admitting the fact asserted in the notice to admit.
83. Until then the claimants had not responded in any way to the offer. On the same day, June 22, they wrote saying that under CPR Part 36, in order to have “the costs consequences usually associated with such proposals”, the defendants should have made a payment into Court and reserving their clients' position. On July 2 1999, the defendants paid the sum of £956,867 into Court. That sum was stated to be exclusive of interest, but interest of £361,701.72 was offered in addition. No attempt was made by the claimants at any stage either to accept the offer or to take the payment in”
“97. I respectfully agree with Lord Justice Simon Brown that offers should not be treated as precise equivalents of payments into Court and that they have many advantages. In particular the money is then readily available and no question can arise as to whether the offeror can or will pay if the offer is accepted. It should thus be appreciated that offerors who do not make a payment-in do so at their peril in the sense that the Court may not be willing to reflect the offer in its order for costs.
98. However, the Court retains a wide discretion under CPR 36.1(2) to make the same order as it would have made under CPR 36.20 even in the absence of a payment-in. All depends upon the circumstances of the particular case. As I have tried to demonstrate, this is a very different case from Amber v Stacey. The judge had all relevant considerations in mind and, in my opinion, reached the just result. There is in my judgment nothing in that case to lead to the conclusion that he made any error of principle and I would therefore dismiss the appeal on costs.”
“I would add only one word of caution. The qualification imposed on the without prejudice nature of the Calderbank letter is, as I have held, sufficient to enable it to be taken into account on the question of costs; but it should not be thought that this involves the consequence that such a letter can now be used as a substitute for a payment into court, where a payment into court is appropriate. In the case of the simple money claim, a defendant who wishes to avail himself of the protection afforded by an offer must, in the ordinary way, back his offer with cash by making a payment in and, speaking for myself, I should not, as at present advised, be disposed in such a case to treat a Calderbank offer as carrying the same consequences as payment in.”
THE CROUCH APPEAL CONCLUSION
THE MURRY APPEAL CONCLUSION
“In MRW Technologies v Cecil Holdings 22nd June 2001, Garland J heard an appeal against a Master's order giving a defendant permission under rule 36.6(5) to withdraw a Part 36 payment. He said, in my view correctly, that the same considerations apply to giving permission to withdraw money in court as to refusing permission to take it out. He inclined, with reference to Curtis J's decision in Marsh v Frenchay Healthcare, to a more flexible approach to take account of the overriding objective. But he also considered that Goddard LJ's phrase “a sufficient change of circumstance since the money was paid to make it just that the defendant should have an opportunity of withdrawing or reducing his payment” was to be adopted as consistent with the overriding objective. I agree.”
Conclusion
dismiss the appeal of the defendant NHS Trust in the Murry appeal
Lord Justice Mance:
Sir Christopher Staughton
ORDER: In Crouch appeal is allowed. Application for permission to rely on further evidence allowed. Respondent to pay appellants costs below from 29th August 2003 and appellants costs of this appeal to be assessed if not agreed. Further order as per agreed minute of order.
In Murry appeal dismissed. Cost order to be determined (on paper) at a later date if not agreed.