University Hospitals of Derby & Burton NHS Foundation Trust v Harrison

The original action was brought by the Claimant as a claim for clinical negligence.

The appeal concerned the question of whether the Claimant’s late acceptance of a Part 36 offer which had been made by the Defendant deprived her of the protections of Qualified One-Way Costs Shifting (QOCS). QOCS provides that costs orders made in favour of a Defendant in personal injury claims can only be enforced and recovered in a handful of limited circumstances.

Proceedings were originally issued in February 2019.  On 6 December 2019 the Defendant made an offer to settle at £421,362.88.  The offer was not accepted, and the proceedings continued. 

The Claimant served an updated schedule of loss with maximum damages stated at £5.7m.  The Defendant served surveillance evidence.  On 8 November 2021, the Claimant confirmed that she would be willing to accept the Part 36 offer that had been made in December 2019. 

As CRU benefits had continued to accrue following the making of the offer, the Claimant required permission of the Court to accept it. In addition, costs remained outstanding.

The Defendant argued that the Court’s order, permitting the Claimant to accept the Part 36 offer out of time, would trigger one of the limited exceptions to QOCS, namely CPR 44.14(1). That provision states that:

“orders for costs made against a Claimant may be enforced without the permission of the Court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the Claimant.”

The question before the Court was whether the hearing required to grant the Claimant permission to accept the Part 36 offer resulted in an “order for damages and interest made in favour of the Claimant.” If it did, the costs order in favour of the Defendant became enforceable.

First Instance

The case went before HHJ Stephton KC on 7 March 2022.  The Claimant was given permission to accept the Part 36 offer, subject to a further deduction for CRU benefits.  In addition, the Court ordered the Claimant to pay the Defendant’s costs from 28 December 2019 onwards, being the last date when she could have accepted the Part 36 offer without permission. 

However the Court concluded that the costs order in favour of the Defendant could not be enforced against the Claimant, with QOCS protection remaining in place.

Appeal

The Defendant appealed on the basis that the hearing on 7 March 2022 resulted in an “order for damages and interest made in favour of the Claimant” for the purposes of CPR 44,14(1).  The Defendant argued that the Court did more than just confirm that permission to accept the offer was given, as it also confirmed that further accrued benefits were to be deducted from the sum originally offered. 

The appeal was refused.  Importantly, the Court of Appeal agreed that an order allowing late acceptance of a Part 36 offer is not "an order for damages and interest made in favour of the Claimant"

Specifically, in this instance the power of the Court was only to give permission for the offer to be accepted and to deduct further benefits.  The order did not amount to a substantive order of the Court where damages had been assessed by the court. 

Comment

Part 36 of the CPR has generated a significant amount of satellite litigation. Despite an attempt to simplify the rules and make them stricter, the language is still routinely tested.  As a result, the Court of Appeal recommended that CPR 44.14(1) is amended to explicitly exclude orders generated following hearings for permission to accept Part 36 offers out of time, as well as other orders following hearings, such as infant approval hearings.

From the Defendant’s point of view, this is further confirmation that enforceable costs benefits from Part 36 offers only emerge following a trial where quantum is assessed.

If you would like to discuss this topic in more detail, please contact Roger Carver, Associate.