Marcel Beasley (A protected party by, his litigation friend Cadell Beasley) v Paul Alexander
| Jurisdiction | England & Wales |
| Judge | Sir Raymond Jack,SIR RAYMOND JACK |
| Judgment Date | 09 October 2012 |
| Neutral Citation | [2012] EWHC 2715 (QB) |
| Court | Queen's Bench Division |
| Date | 09 October 2012 |
| Docket Number | Case No: HQ11X03139 |
[2012] EWHC 2715 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Raymond Jack
Sitting as a Judge of the High Court
Case No: HQ11X03139
Richard Gregory (instructed by Fletchers Solicitors) for the Claimant
Andrew Peebles (instructed by Greenwoods Solicitors) for the Defendant
Hearing dates: 27/07/2012
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.
On 22 May 2009 a road accident occurred when the defendant turned across the path of the claimant's motorcycle. The claimant suffered severe injuries. An order was made that liability for the accident should be tried before issues as to damages. On 27 July 2012 I handed down my judgment holding that the accident was caused by the negligence of the defendant and that it was not contributed to by the fault of the claimant. It had been thought that an order could be agreed as to the consequences of the judgment, but the parties were unable to agree on the amount of the payment to be made on account of costs. The defendant therefore took the position that Rule 36.13(2) of the CPR had the effect that the court should not make any order as to costs until the whole case had been decided. At the conclusion of argument following the handing down as to whether I should make an order for costs I stated that I had concluded that I should not. I said that I would give my reasons subsequently, which I do now.
Part 36 of the CPR is headed 'Offers to settle', and Rule 36.13 is headed 'Restriction on disclosure of a Part 36 offer'. Rule 36.13 provides:
"(1) A Part 36 offer will be treated as 'without prejudice except as to costs'.
(2) The fact that a Part 36 offer has been made must not be communicated to the trial judge or to the judge (if any) allocated in advance to conduct the trial until the case has been decided.
(3) Paragraph (2) does not apply—
(a) where the defence of tender before claim has been raised;
(b) where proceedings have been stayed under rule 36.11 following acceptance of a Part 36 offer; or
(c) where the offeror and the offeree agree in writing that it should not apply."
It was submitted for the defendant in written submissions as supplemented orally that in a situation arising from a split trial such as the present situation, if there was no Part 36 offer, the court might be told that there was no Part 36 offer (and the court could then go on to consider costs), but that where there was an issue as to Part 36 the court could not be told whether there was a Part 36 offer (and the court was therefore unable to consider costs). It was submitted for the claimant that the words in Rule 36.13(2) 'until the case has been decided' should be construed to include the situation where the first part of a split trial had been concluded, and so the court here should consider the position as to costs. It was nonetheless accepted on behalf of the claimant that, in accordance with the decision of the Court of Appeal in HSS—to which I will come, where there was an offer to settle the whole case the court must wait until the final outcome to see how the outcome compared with the offer before dealing with costs.
The present Part 36 came into effect on 6 April 2007. I will refer to Part 36 as it stood prior to that date 'the previous rules'. The most important change was probably the abolition of payments into court. The previous rules provided that offers made in accordance with their requirements should be called either Part 36 payments or Part 36 offers: Rule 36.2(1). An offer to settle a money claim had to be made by way of payment into court if it was to be within the previous rules: Rule 36(3)(1). A Part 36 offer might relate to a whole claim or to part of it or to any issue that arises in it, and might be limited to accepting liability up to a specified proportion (which would include an issue as to contributory negligence): Rule 36.5(2) and (4). Rule 36.19 was headed 'Restriction on disclosure of a Part 36 offer or a Part 36 payment'. It was follows:
" 36.19
(1) A Part 36 offer will be treated as "without prejudice except as to costs".
(2) The fact that a Part 36 payment has been made shall not be communicated to the trial judge until all questions of liability and the amount of money to be awarded have been decided.
(3) Paragraph (2) does not apply—
(a) where the defence of tender before claim has been raised;
(b) where the proceedings have been stayed under Rule 36.15 following acceptance of a Part 36 offer or Part 36 payment; or
(c) where—
(i) the issue of liability has been determined before any assessment of the money claimed; and
(ii) the fact that there has or has not been a Part 36 payment may be relevant to the question of the costs of the issue of liability."
The Court of Appeal considered the effect of the previous Rule 36.19 in HSS Hire Services Group plc v BMB Builders Merchants Ltd [2005] EWCA Civ 626, [2005] 1 WLR 3158. The case concerned a licence agreement which the claimant licensee alleged had been repudiated by the defendant licensor. The claimant succeeded at the trial of liability. The defendant had made a payment into court. The judge was told of the payment but not of the amount. He ordered the defendant to pay the costs of the liability trial because they had spent money on the issue and had won. In giving a judgment with which the other members of the court agreed Waller LJ stated:
"28. In defending the judge's approach and in answer to the question as to what apart from paying into court the defendants could do to protect themselves against an order for costs on the liability issue, Mr Dunning QC robustly argued, it was open to them to concede liability, and if they chose not to do so then liability for costs followed if they lost the issue. If that approach is right it seems to discourage the arguing of preliminary points.
29. The contrary approach is that parties should be encouraged to make Part 36 payments in and/or offers; they should also be encouraged to try preliminary points if that could lead to the saving of costs overall. If payments in are to be totally ignored at the conclusion of the trial of a preliminary issue, that will discourage applying for the trial of the same, and may even discourage Part 36 offers where preliminary issues have been ordered. The proper approach at the conclusion of a trial of a preliminary issue where there has been a Part 36 payment in or a Part 36 offer, should therefore normally be to adjourn the question of costs pending the resolution of all the issues including damages, at which stage the quantum of the Part 36 offer can be revealed and the discretion in relation to costs exercised in the knowledge of it.
30. I have no doubt that the provisions of Part 36 and of Part 44 encourage the latter approach. Mr Dunning strove manfully to argue that the provisions allowed the judge to take the view he did. He argued (1) even where there had been a payment in, there was no rule which expressly prevented the judge dealing with the costs of the trial of the issue of liability or which required him to reserve the question of costs until after the issue of damages had been resolved; (2) the modern approach was to encourage stage based orders; (3) it was the defendants who wanted a split trial and the claimants resisted it; (4) the defendants could have admitted liability but chose to fight it; (5) the claimants were entirely successful; (6) it was a case where the dispute was about what was said, and the evidence of HSS had been entirely accepted, and the witnesses of the defendants had been severely criticised—Mr Harrison was described as "disingenuous" and Mr Sowton as "totally unreliable", and reference was made to CPR 44.3 (4) under which it was material to take into account the conduct of the parties; (7) it is the judge who has heard the issue who is based placed to deal with the costs. Thus he argued that the judge having been correctly informed of the fact that there had been a payment in as he was entitled to be under CPR 36.19 (3)(c), was equally entitled to hold that it was immaterial.
31. CPR 36.19 is an important provision and some time was spent debating precisely what it meant. It provides as follows:—
……….
33. The following points need consideration. Why is it provided that the fact that there has been a Part 36 payment is something that 36.19(3)(c) allows to be revealed to the trial judge where the issue of liability has been determined before the assessment of the money claimed? Why does (c)(ii) contemplate both that the fact that a payment has been made or the fact that one has not been made may be relevant to costs? Is what is contemplated as being disclosable to the trial judge simply the fact of payment in or would it be proper to disclose the actual amount? How does the provision fit with the obligation (the word in CPR 44.3 (4) is "must") to take into account any payment into court or an admissible offer to settle?
34. At one moment it was being suggested in argument that at the end of a trial on liability it would be appropriate under Part 36.19(3)(c) to disclose both the fact of a payment in and the quantum thereof so that a judge could exercise his discretion in relation to the award of costs on the preliminary issue taking the view, for example, that the amount paid in was on any view too low. In that way it could be argued he could properly fulfil his obligation under 44.3(4) at that stage. Indeed Mr Dunning went so far as to offer to show us the terms of the payment in so that if we took the view the...
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