Crouch v King's Healthcare NHS Trust
| Jurisdiction | England & Wales |
| Judge | Lord Justice Waller,Lord Justice Mance,Sir Christopher Staughton |
| Judgment Date | 15 October 2004 |
| Neutral Citation | [2004] EWCA Civ 1332 |
| Docket Number | Case No: B3/2004/0624 and B3/2003/2049 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 October 2004 |
[2004] EWCA Civ 1332
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
His Honour Judge Latham and Mr Justice Wright
WT191141 and HQ02X00531
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Waller
Lord Justice Mance and
Sir Christopher Staughton
Case No: B3/2004/0624 and B3/2003/2049
Philip Havers QC (instructed by Kennedys and Hempsons) for the Appellants
Simeon Maskrey QC (instructed by Osborne, Morris & Morgan) for the Respondent in Murry. Mr Maskrey QC also assisted the Court in Crouch
These two appeals have been argued together because both involve considering the effect of "offers to settle" made in cases involving money claims where payments into court have not been made in accordance with Part 36.3 CPR. No point was taken in the courts below as to the admissibility of the offers on the issues before the courts although as I shall explain, the basis on which they were admissible or on which they could be taken into account may be of relevance. In one appeal (the Crouch appeal) the facts were that the claimant (Mr Crouch) won the case but failed to beat the offer. The judge held that the defendants had not successfully protected their position on costs because they had not paid money into court under Part 36, resulting in the defendants being ordered to pay all the costs. In the other (the Murry appeal) the question is whether by agreement the provisions of Part 36 which would have applied if there had been a payment in, applied and if so, whether the judge exercised his discretion properly by refusing to allow the withdrawal of the offer.
The defendants and appellants in both appeals are NHS Health Care Trusts who because of the implications for them of paying into court substantial sums of money, have developed a practice of sending an "offer of settlement" by reference to which they hope to persuade courts to make the same orders for costs in their favour as if they had made a payment into court. The form of what has become a standard letter has changed from time to time. The Appeals relate to different stages in the development of the standard letter. In the Murry appeal the letter expressed itself as being an "offer …pursuant to Part 36" without reference to Part 44. In the Crouch appeal the letter states that "This offer is made ..under the provisions of Part 36 and 44 of the Civil Procedure rules".
Both letters then contained paragraphs in almost identical wording save as to the dates for acceptance of the offer. I can take the words from the Crouch letter.
"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."
In later versions of the standard letter it seems from statements put in on behalf of the NHS Trust which we have read without prejudice to their admissibility at the appeal stage, it is intended that the following words should appear in place of the final main paragraph, which I quote now because they reflect to some extent the submissions of Mr Havers QC for the NHS Trusts, and reflect reliance on The Maersk Coloumbo [2001] 2 Lloyds Rep 275 in place of Amber v Stacey for reasons which will become apparent.
"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 object of the appeals apart from seeking to reverse the judges' exercise of discretion in the particular cases, is to obtain the approval of the Court of Appeal for the practice of sending such offer letters as opposed to making payments into court, so that for the future an NHS Trust can feel confident first that such "offers" will have the desired effect of placing claimants at risk for costs from 21 days from the date of the offers, and second that such offers will effectively be treated as having the consequences envisaged by Part 36 for payments into court, particularly the presumption in favour of an order for costs being made in favour of the NHS Trust where such offers are not bettered provided under Part 36.20 where there has been a payment in.
The provisions of Part 36 and Part 44
The relevant provisions of Part 36 and Part 44.3 are the following:-
"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...
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