Personal Injury
CPR 36.14
In Carver v BAA PLC [2008] EWCA Civ 412 (April), [2008] All ER (D) 295 (Apr) the Court of Appeal examined the new costs consequences under CPR 36 where a claimant had beaten a payment into court by just £51. Lisa Carver, an air hostess flying in and out of , fell heavily and injured her left ankle when she stepped into a defective lift. Liability was conceded and in November 2005 BAA made a pre-issue offer to settle in the sum of £4,006. On 21 March 2006 Carver issued a claim for damages in excess of £5,000. On 6 June 2006 the defendant made a Pt 36 payment equivalent to £4,520 which was rejected by the claimant. She obtained further medical evidence, pursued a claim in excess of £19,000 and the case was reallocated to the multi-track. Following acrimonious exchanges in correspondence, no agreement was reached on quantum and the case eventually went to trial.
Excess
On 4 June 2007 Judge Knight gave judgment for the claimant for £4,686.26 inclusive of interest. Counsel agreed that, making allowance for the interest, the judgment exceeded the payment in by £51. The judge asked “who is the winner now?” He held that CPR 36.14 permitted the court to look at all the circumstances of the case in deciding where the balance of advantage lay. Having done so, he thought that the claim was always a fast track case, that it should never have been fought and that the claimant had failed to respond to Pt 36 offers. He ordered her to pay the defendant’s costs after the time for accepting the payment in had expired. He also made no order for costs for the period covered by the earlier offer of £4,006— described by him “adjacent to the sum awarded”. The claimant appealed both orders.
The Court of Appeal recalled that beating a payment in by as little as £1 was doing better than it and the costs consequences set out in the former CPR 36.20 generally followed. Lord Justice Ward observed that the rules changed with effect from 6 April 2007 but that transitional provisions could render the change retrospective, as in Miss Carver’s case. The costs consequences following judgment are now set out in CPR 36.14.
Under the old rule Carver would, on the face of it, have recovered her costs. Ward LJ gleaned that the purpose of the amendment was to replace the old system of payments in with offers to settle and to apply the same costs consequences irrespective of whether the offer was for the payment of a sum of money in a money claim or an offer of terms and conditions on which to settle non-money claims. For money claims as well as for nonmoney claims the same questions arise under CPR 36.14(1) namely, under
(i) whether the judgment is “more advantageous” than the offer and under
(ii) whether the judgment is “at least as advantageous” as the offer.
All circumstances Clearly, in non-money claims where there is no yardstick of pounds and pence by which to make the comparison, all the circumstances of the case have to be taken into account. Ward LJ asked why, therefore, should the rule be different where a money claim is involved? He rejected the claimant’s compelling submission that a pure monetary comparison produces clarity and avoids placing value upon subjective elements such as the stress and anxiety involved in protracted, risky litigation. However, in the context of the new Pt 36, where money claims and non-money claims are to be treated in the same way, “more advantageous” is, as Lord Justice Rix observed in the course of argument, “an open-textured” phrase. Thus it did permit a more wide-ranging review of all the facts and circumstances of the case in deciding whether or not the judgment, which was the fruit of the litigation, was worth the fight.
Other Pt 36 offer
Their lordships mentioned Jones v Associated Newspapers Ltd [2007] EWHC 1489, [2008] 1 All ER 240 in which CPR 36.14(1)(b) arose because the MP claimant had made a Pt 36 offer by which the defendant was to pay him £4,999 and publish an apology for a libelous article in the Mail on Sunday. A jury eventually returned a verdict in the claimant’s favour and awarded £5,000. The claimant sought indemnity costs together with interest. Mr Justice Eady thought it necessary to compare the value of a payment of £4,999 (coupled with an unqualified apology) with the award of £5,000 (with such vindication as that represented) after the stress of litigation and the airing of further unfavourable matters during a contested trial. Since the judge was unable to conclude that the jury’s award was “at least as advantageous” as the claimant’s offer, he ordered only standard basis costs. Returning to Carver,Ward LJ added that the change of language must be seen in light of the modern approach to litigation. He emphasised that the CPR, and Pt 36 in particular, encourage both sides to make offers to settle. Compromise is seen as an object worthy of promotion; compromise is better than contest. Litigation is time-consuming and it comes at a cost, emotional as well as financial. Those are, therefore, appropriate factors to take into account in deciding whether the battle was worth it. Money is not the sole governing criterion. In dismissing the appeal their lordships concluded that Judge Knight was entitled to take into account that the extra £51 gained was more than off set by the irrecoverable cost incurred by the claimant in continuing to contest the case for as long as she did, the added stress to her as she waited for the trial, and the stress of the trial process itself. No reasonable litigant would have embarked upon this campaign for a gain of £51. As for the judge making no order for costs for the period after the initial offer to settle and the payment in taking effect, while “adjacent” may not have been the most suitable word, in Ward LJ’s view, to compare the offer of £4,006 with the judgment of £4,435, it was not so inappropriate that it demonstrated that the judge had exceeded the generous ambit within which reasonable disagreement was possible.
SOLICITORS’ NEGLIGENCE
In Whitehead v Hibbert Pownall & Newton (2008) EWCA Civ (April), [2008] All ER (D) 60 (Apr) the Court of Appeal found that solicitors who were negligent in litigating a mother’s “wrongful birth” claim by failing to conclude it before she committed suicide were not liable to pay damages to her estate for the child’s care after her death. On 10 August 1986 Paula McLeish gave birth to David who suffered from spina bifida. On 12 January 1989 HPN solicitors on behalf of McLeish issued proceedings in negligence against the hospital authority alleging that the clinicians failed to diagnose spina bifida in the foetus and so deprived McLeish of the opportunity of a termination. By 6 March 1995 the action had not yet been set down for trial. On that day McLeish killed herself. She died intestate. David’s father, Eric Whitehead, was substituted as administrator of McLeish’s estate and he settled the action cheaply on 2 January 1999 pending the hospital’s application for strike out for abuse of process and delay.
On 2 June 2004 Whitehead commenced professional negligence claims against HPN and a barrister. The full value of the claim included the costs of future care and accommodation for David for McLeish’s expected lifetime. The case being one of failure to diagnose, there was no question of David being substituted as claimant. At trial Mr Justice Griffith Williams found the solicitors negligent and, assessing the prospects of success and the quantum of the claim as at 1 March 1995, ie immediately before McLeish’s untimely death, awarded £118,829 to the estate. On appeal HPN argued that the damages so calculated provided an unjustified windfall to the estate: it stood in McLeish’s shoes and she was only ever entitled to recover losses incurred or to be incurred in her lifetime. Whitehead contended that had HPN not been negligent, the first action would have been successfully concluded before McLeish’s death and damages would not, therefore, have been curtailed by death.
Just compensation
Lord Justice Laws posed the question “which of these truths should guide the court in arriving at judgment?” It was his opinion that HPN’s should prevail. He said the purpose of an award of damages is, of course, to provide just compensation for a wrong done to the claimant. In most cases that purpose is given effect by the general rule that the claimant is to be restored to the position in which he would have been if the wrong had not been committed, so far as that can be achieved by money. To attain that result, he added, the court has to reconstruct events which in fact never happened, but would have happened but for the wrong.
He thought that different considerations applied in a professional negligence case against legal representatives based on delay in the conduct of litigation. There the court is required to determine what the outcome of a claim would have been had it been resolved, contrary to the fact, at some time significantly earlier than the date of the court’s deliberations. In such a case events may have happened since the putative date of the original claim’s resolution, and before the court deals with the matter, which undermine or frankly contradict the view that just compensation for the lawyers’ wrong is to be calculated by reference to what the outcome of the original claim would have been.
Guidance
His lordship emphasised that it was important in such cases not to take too narrow a view of the guidance afforded by the principle of restitutio in integrum to leave out of account events relevant to the ascertainment of just compensation, on the ground only that they have happened since the notional trial date and so were by definition unknowable at that time. He thought this to be supported by general considerations of justice and by the principle, which has often been recognised, that the law should not speculate when it knows.
In the latter regard, he quoted Lord Macnaghten’s rhetorical questions:
“Why should [the arbitrator] listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark?”.
In allowing the appeal the court emphasised the lack of difficulty, too, in a second action for professional negligence based on delay. There was no constraint upon the receipt of new evidence, no pressure of finality in litigation nor of the successful litigant’s right to rely on the judgment he had obtained. But before claimant practitioners get too excited with a “sauce for the goose is sauce for the gander” line of argument, Laws LJ’s concluding words ought to be borne in mind:
“There may be cases where a supervening event, happening after the notional trial date, would if taken into account in a later action swell the damages rather than diminish them. Different considerations might then arise. Nothing I have said is intended to express a view about such a case.”
