Evelyn Horne (as Executrix of the estate of Edward Horne, deceased) v Prescot (No.1) Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Nicol |
| Judgment Date | 24 May 2019 |
| Neutral Citation | [2019] EWHC 1322 (QB) |
| Date | 24 May 2019 |
| Court | Queen's Bench Division |
| Docket Number | Case No: QB/2018/0215 |
[2019] EWHC 1322 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Nicol
Case No: QB/2018/0215
Jamie Carpenter (instructed by Taylor Rose TTKW) for the Appellant/Defendant
Benjamin Williams QC (instructed by Fieldfisher LLP) for the Respondent/Claimant
Hearing dates: 7 th May 2019
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is an appeal from Master Nagalingam in the Senior Courts Costs Office. At a hearing on 9 th July 2018 the Master conducted a detailed assessment of the Claimant's costs. The Claimant's bill of costs had totalled £104,870.79. As reflected in the final costs certificate (sealed on 10 th September 2018) the total costs were assessed at £121,017.16 (including £20,018.39 as the costs of the detailed assessment itself. Thus, the costs of the action itself were assessed at £91,807.06 1). By a letter of 5 th March 2018, Fieldfisher, the Claimant's solicitors, had offered to accept £82,000, exclusive of the costs of the assessment and, critically for the purposes of this appeal, ‘exclusive of interest’. The offer (which I set out in full below) was described as a ‘an offer to settle in accordance with CPR Part 36’. The Defendant, the paying party, asserted that an offer ‘exclusive of interest’ was not an offer within Part 36. As part of his decision on 9 th July 2018 the Master found that an offer in this form was capable of being, and in this case was indeed, a valid Part 36 offer. Since the costs assessed by the Master very substantially exceeded the Claimant's offer, it followed that the Claimant was entitled to the benefits which flowed from achieving a judgment which beat her offer (see Rule 36.17).
On this appeal, Mr Carpenter on behalf of the Defendant argues that the Master was wrong. Mr Williams QC on behalf of the Claimant argues that he was correct, but in any event, by virtue of his Respondent's Notice, he submits that the Master's decision can properly be upheld on other grounds. Mr Williams had two further alternative arguments. First, he says that, if the rules did not permit a Part 36 offer to be exclusive of interest, the offer made by Fieldfisher should be treated as inclusive of interest, in which case the Claimant had still succeeded in obtaining a decision which beat her offer and the beneficial consequences for such an offer would still follow. His final alternative was to submit that, if the letter from Fieldfisher was not a Part 36 offer, the Court in its discretion should make a decision that has some (though he accepts, not all) of the same advantages for the Claimant.
Permission to appeal was granted by Martin Spencer J. on 18 th February 2019. He did so, not as an indication that he considered the appeal was meritorious, but because there had been conflicting decisions on this issue at the lower level and authority at the level of the High Court was desirable. In fact, one of those decisions was in a case called King v City of London Corporation (a decision of HHJ Dight at the Central London Civil Justice Centre on 14 th December 2018). I understand that the Court of Appeal has granted permission to appeal from his decision and the appeal is due to be heard in November 2019. Neither of the parties to the present appeal suggested that this hearing should be adjourned pending judgment in King.
At the hearing of the appeal, I had the benefit of the considerable assistance of Master Simon Brown who is both a Costs Judge and a Queen's Bench Master. The decision on the appeal, however, is mine and so any errors in this judgment are my responsibility.
The underlying claim
The Claimant's husband contracted mesothelioma from which he later died. Her claim on behalf of her husband's estate arose in consequence. The parties agreed a settlement figure of £180,000, but one of the beneficiaries was a protected party and, for the settlement to be effective, it therefore had to be approved by the court. In consequence Part 8 proceedings were issued and the terms were set out in a consent order dated 14 th December 2017, sealed on 29 th December 2017. One of the terms of the order was that the Claimant's costs should be subject to detailed assessment if not agreed. Agreement was not reached and, as I have said, the detailed assessment was conducted by Master Nagalingam.
The material parts of the (current) Civil Procedure Rules
I remind myself that the issue in the present case arose in the context of a detailed assessment. Part 47 of the CPR deals with detailed assessment of costs and the costs of the detailed assessment proceedings is addressed by r.47.20. Rule 47.20(4) says:
‘The provisions of Part 36 apply to the costs of detailed assessment proceedings with the following modifications –
(a) “claimant” refers to “receiving party” and “defendant” refers to “paying party”
(b) “trial” refers to “detailed assessment hearing”
(c) a detailed assessment hearing is “in progress” from the time when it starts until the bill of costs has been assessed or agreed.
(d) for rule 36.14(7) substitute, “If such sum is not paid within 14 days of acceptance of the offer, or such other period as has been agreed, the receiving party may apply for a final costs certificate for the unpaid sum.”
(e) a reference to “judgment being entered” is to the completion of the detailed assessment and references to a “judgment” being advantageous or otherwise are to the outcome of the detailed assessment.’
The parties are agreed that the modifications simply adapt the language of Part 36 to the language of detailed assessment proceedings.
Rule 47. 20 has been modified from time to time. Its present form dates from 1 st April 2013 and the commencement of the Civil Procedure (Amendment) Rules 2013 SI 2013 No. 262. The transitional provisions are immaterial because the detailed assessment proceedings in this case commenced after 1 st April 2013.
Part 36 has also gone through various changes. Mr Carpenter submits these are significant and I shall return to them, but it is convenient first to set out the material parts of the current rules following their re-enactment by the Civil Procedure (Amendment) Rules 2014 SI 2014 No.3299 with effect from 6 th April 2015.
‘36.1
(1) This Part contains a self-contained procedural code about offers to settle made pursuant to the procedure set out in this Part (“Part 36 offers”)
…
Section I Part 36 offers to settle 36.2 …
(2) Nothing in this Section prevents a party making an offer to settle in whatever way that party chooses, but if the offer is not made in accordance with rule 36.5, it will not have the consequences specified in this Section.
(Rule 44.2 requires the court to consider an offer to settle that does not have the costs consequences set out in this Section in deciding what order to make about costs)
(3) A Part 36 offer may be made in respect of the whole, or part of, or any issue that arises in –
(a) a claim, counterclaim or other additional claim; or
(b) an appeal or cross appeal from a decision made at a trial.
36.5
(1) A Part 36 offer must—
(a) be in writing;
(b) make clear that it is made pursuant to Part 36;
(c) specify a period of not less than 21 days within which the defendant will be liable for the claimant's costs in accordance with rule 36. 13 or 36.20 if the offer is accepted.
(d) state whether it takes into account any counterclaim
(d) state whether it relates to the whole of the claim or to part of it or to an issue that arises on it and if so to which part or issue; and
(e) state whether it takes into account any counterclaim
(2) Paragraph (1)(c) does not apply if the offer is made less than 21 days before the start of a trial.
(3) In appropriate cases, a Part 36 offer must contain such further information as is required by rule 36.18 (personal injury claims for future pecuniary loss), rule 36.19 (offer to settle a claim for provisional damages) and rule 36.22 (deduction of benefits).
(4) A Part 36 offer which offers to pay or offers to accept a sum of money will be treated as inclusive of all interest until –
(a) the date on which the period specified under rule 36.5(1)(c) expires; or
(b) if rule 36.5(2) applies, a date 21 days after the offer was made.
36.6 Part 36 offers — defendant's offer
(1) Subject to rules 36.18(3) and 36.19(1), a Part 36 offer by a defendant to pay a sum of money in settlement of a claim must be an offer to pay a single sum of money.
…
….
36.13 Costs consequences of acceptance of a Part 36 offer
(1) Subject to paragraphs (2) and (4) and to rule 36.20, where a part 36 offer is accepted within the relevant period the claimant will be entitled to the costs of the proceedings (including their recoverable pre-action costs) up to the date on which notice of acceptance was served on the offeror.
…
(2) Where –
(a) a defendant's Part 36 offer relates to part only of the claim; and
(b) at the time of serving notice of acceptance within the relevant period the claimant abandons the balance of the claim
The claimant will only be entitled to the costs of such part of the claim unless the court orders otherwise.
(3) Except where the recoverable costs are fixed by these Rules, costs under paragraphs (1) and (2) are to be assessed on the standard basis if the amount of costs is not agreed.
(4) Where –
(a) a Part 36 offer which was made less than 21 days before the start of a trial is accepted; or
(b) a Part 36 offer which relates to the whole of the claim is accepted after the expiry of the relevant period; or
(c) subject to...
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Mr Francis King v City of London Corporation
...Campbell, concluded that an offer exclusive of interest cannot be a valid Part 36 offer. In contrast, in Horne v Prescot (No 1) Ltd [2019] EWHC 1322 (QB), [2019] 1 WLR 4808, Nicol J, dismissing an appeal from Master Nagalingam, held that, at least in the context of detailed assessment proc......
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James Nosworthy (as Representative of the Estate of Barbara Nosworthy (Deceased) v Royal Bournemouth & Christchurch Hospitals NHS Foundation Trust
...confirmed by comments to this effect in Friston on Costs (third edition) (para 56.57). Further, in Horne v Prescott (No.1) Ltd [2019] EWHC 1322 (QB) Nicol J did not refer to any such general rule when describing the practice of awarding interest on costs in detailed assessment proceedings ......