MGS (a protected party by KWM, his mother and Litigation Friend) v University Hospitals Bristol and Weston NHS Foundation Trust
| Jurisdiction | England & Wales |
| Judge | Dexter Dias |
| Judgment Date | 16 June 2023 |
| Neutral Citation | [2023] EWHC 1547 (KB) |
| Court | King's Bench Division |
| Docket Number | Case No: QB-2021-002248 |
[2023] EWHC 1547 (KB)
Dexter Dias KC
(Sitting as a Deputy High Court Judge)
Case No: QB-2021-002248
IN THE HIGH COURT OF JUSTICE
KING'S BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr McCullough KC (instructed by Enable Law) for the Claimant
Ms Ayling KC (instructed by DAC Beachcroft) for the Defendant
Hearing dates: 7 June 2023
Approved Judgment
Dexter Dias KC
Dexter Dias KC:
(Sitting as a Deputy High Court Judge)
[CS/DS: claimant/defendant skeleton argument]
This is the judgment of the court.
In this personal injury claim, the court must rule upon two issues (1) whether damages agreed in the compromised claim in respect of a protected party should be approved by the court; (2) what interest is payable on a Part 36 (settlement) offer that was accepted by the defendant out of time.
The claimant is a child and a protected party ( CPR 21.2(1); PD21). There is an anonymity order in place. Therefore, the claimant will be known as MGS. He appears by his litigation friend, who is his mother, and who shall be known as KWM. The claimant is represented by Mr McCullough KC. The defendant is the University Hospitals Bristol and Weston NHS Foundation Trust. The defendant is represented by Ms Ayling KC.
I recognise that anonymity orders have a dehumanising effect and risk reducing the living, breathing human beings at the heart of this sad case, some of whom are present at court before me today, to ciphers. While acknowledging the vital importance of the open justice principle and the “public watchdog” function of the press ( Thoma v Luxembourg [2001] ECHR 240 at [5]), I judge that the Article 8 ECHR right privacy and private life imperatives here significantly outweigh the Article 10 ECHR freedom of expression rights of the press and public.
Background
In October 2009, a child was born by emergency caesarean section at the St Michael's Hospital, Bristol. That child is claimant in this case. Although he had a low birth weight of 2.89 kilograms, he was otherwise in good health. However, overnight on 2 to 3 October, and the following morning, the Claimant became progressively more hypoglycaemic and as a result sustained permanent brain injury. This has impacted virtually every aspect of his life. He brings a claim for personal injuries against the treating hospital in the form of the Trust that operates it.
There has been full admission of liability by the defendant. Liability was accepted in the defendant solicitors' letter dated 17 May 2018. There the defendant admitted that overnight on 2–3 October 2009 inadequate steps were taken to ensure that the claimant was feeding adequately and that a blood sugar reading should have been taken earlier than 05.00 hours on 3 October 2009. By reason of these failures, the child was exposed to two avoidable periods of hypoglycaemia during the morning of 3 October 2009. These caused him to suffer brain injury. The case thus resolved into a question of quantum of damages.
As to the pain and suffering and loss of amenity (“PSLA”) he suffered, the claimant has learning difficulties as well as significant social and behavioural issues that make his care and safe management challenging. He lives with epilepsy that is not reliably medically controlled. He is now 13 years old.
Judgment was entered on 12 September 202 by Master Thornett and the case was set down for a trial on damages due to start on 19 June 2023. There was a Joint Settlement Meeting (“JSM”) in September 2022. Both parties made Part 36 offers after the JSM. The claimant's Part 36 offer was dated 17 October 2022 and stated that the claimant would accept in full and final settlement a lump sum of £9.3 million to include a pro rata sum for care and case management until 14 December 2022, and periodical payments (“PPOs”) starting on 15 December 2022 at £190,000, rising to £238,000 from 15 December 2028.
I will deal with the interest dispute first, then turn to the overall approval, as I wish in conclusion to direct a few words to MGS and his mother.
§I. INTEREST DISPUTE
What, if any, interest is payable to a claimant when the defendant accepts the Part 36 offer out of time?
A dispute arose between parties about the effect of the defendant accepting the claimant's Part 36 offer after the 21-day relevant period specified in the offer. The offer was made in compliance with the provisions of CPR Part 36 on 17 October 2022 and was accepted by the defendant on 4 May 2023, the relevant 21-day period having expired on 7 November 2022. The relevant net capital lump sum is £7.4 million (£9.3 million minus interim payments) plus the first PPO of £190,000. About this the parties agree.
The claimant's offer was put in these terms:
“The offer is deemed to include interest up to the 21 days of service of this notice.
Thereafter, interest will accrue up to the date it is accepted.”
The defendant's objection to paying interest is not because such a contractual term is inherently invalid. Indeed, the validity of such a term is confirmed by authority, including Calonne Construction Limited v Dawnus Southern Limited [2019] EWCA Civ 754. Following Calonne, CPR r.36.5 was amended on 6 April 2021 to provide:
“(5) A Part 36 offer to accept a sum of money may make provision for accrual of interest on such sum after the date specified in paragraph (4) [i.e. 21 days after it was made, as specified within the offer pursuant to r.36.5(1)(c)]. If such an offer does not make any such provision, it shall be treated as inclusive of all interest up to the date of acceptance if it is later accepted.”
The White Book notes:
“Claimants might well wish to include some such provision in their offers since otherwise they will not be able to recover any additional interest upon late acceptance.” (36.5.1)
While the claimant submits that this was the objective of his offer, the true nature of the term is hotly contested. To my mind, the dispute between parties is reducible to two issues:
(1) Whether interest is payable at all and on what – the question being one of contractual interpretation of the offer term;
(2) If (1), what the applicable interest rate should be.
The stances of parties are clear and irreconcilable. However, the parties do agree that whenever the offer was accepted, there was likely to be a given amount of time before the matter came before the court and was approved, the claimant being a protected party, such court approval was unavoidable. Parties agree that the period would have been the same whether the offer was accepted on Day 21 or later (confirmed at DS §24). Thus, we can take this set block of time out of the analysis – it would be the same either way. The focus instead is on the extra time caused by the delay in acceptance.
There are, in fact, two delay periods, parties agree, as there was a PPO due on 15 December 2022, with a consequent shorter period of delay (the “delay period”). Thus, the delay period for the net lump sum was 178 days and 141 days for the PPO.
Issue 1: contractual interpretation
Submissions. The claimant submits that interest must be payable on the whole lump sum offer given the explicit terms of the Part 36 offer – in other words, this was the contractual agreement between parties. Thus, interest should be payable for such extra period as the claimant was kept out of the money he was owed. The defendant submits that while the term may be valid, the net effect of the precise arrangements is that no monies are payable to represent interest. That is because the contractual term does not specify that the interest would be payable on the whole net offer sum on any different basis to the way it had already accrued from issue of the claim form (on general damages) or from the date of loss (on past losses). That being so, it is payable for the delay period on “conventional personal injury principles” settled and recognised in personal injury litigation (DS §41). These are set out clearly in the White Book 2023 (p.500). Interest to trial is awarded on PSLA at 2% from date of service of the claim form, on special damages from the date of injury to the date of judgment at one half of the special investment account (“SIA”) rate on continuing losses and at full rate on crystallised pre-trial losses. Once judgment has been obtained, the judgment attracts interest pursuant to s.17 Judgments Act 1838. Since interest had accrued in this way until the point of offer, this is how it should continue until acceptance: 2 per cent on PSLA from the date of service of the claim form and one half SIA for continuing past losses over the period during which they were incurred. It is irrelevant that acceptance was outside the 21-day limited offer period. However, in this case the historic interim payments which must be offset, exceed these figures, so there is no interest to pay.
Analysis. The court's role is to construe a contract. It is not to exercise a discretion. There is no special or favourable allowance made because the claimant is a child and protected party. The court should not ordinarily disapply the usual rules of Part 36 ( Matthews v Metal Improvements [2007] EWCA Civ 215; IEH v Powell [2023] EWHC 1037 (KB) (Senior Master Fontaine) applying SG v Hewitt [2012] EWCA Civ 954).
The defendant submits and the court accepts that the contract must be interpreted in the context of Part 36. While that is a self-contained code ( CPR 36.1(1)), it seems to me that a Part 36 offer term that forms the essential part of a contract should be read in the context of the principles of Part 36. The defendant is correct about that. The offer term is simply a contractual term the meaning of which...
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