In a Judgment on “an important question” about trial judges’ power under Part 36, the Court of Appeal in the recent case of Webb v Liverpool Women’s NHS Foundation Trust has allowed an appeal from a decision that, although a claimant had bettered her Part 36 Offer at trial, the fact that one of her two allegations of negligence had not been upheld meant that it was just to make an issues-based proportionate costs order excluding the costs of that allegation. Sir Stanley Burnton held that the trial judge wrongly failed to address separately costs incurred before and after the “effective date” of the Part 36 Offer:-
- Applying CPR 44 (applicable to costs incurred before that date), the trial judge should not have deprived the claimant of the costs of the second allegation. Although the allegations concerned different aspects of the claimant’s mother’s labour, they related to one event (the claimant’s birth) and it could not be said that the second allegation had been pursued unreasonably (CPR 44.2(5)). Failure on some points is not unusual, particularly in personal injury claims, and will not normally justify depriving claimants of part of their costs.
- Under CPR 36.14(3)(b), a successful claimant is entitled to all of their costs after the effective date on an indemnity basis, unless that would be “unjust” (Kastor Navigation Co Ltd v Axa Global Risks (UK) Ltd , which was based on materially different versions of CPR 36 and 44, could be distinguished). Although Part 36 does not preclude the making of an issue-based or proportionate costs order, a successful claimant should only be deprived of part or their costs if it would be unjust for them to receive those costs in “all the circumstances of the case”. In exercising its discretion, the court must take account of the fact that the unsuccessful defendant could, and should, have avoided the costs of the trial by accepting the claimant’s Part 36 Offer.