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Dugmore v Swansea NHS Trust (1) & Morrison Hospital NHS Trust (2), Cardiff County Court, 16 June 2004

23 August 2008
The issues

Part 36 Offers – Claimant’s Offer To Settle – Whether Claimant Entitled To Award Of Enhanced Interest

The facts

The Claimant succeeded in her claim against the Swansea NHS Trust in respect of sensitisation to latex. She sought interest on the award of damages made to her and up to 10% above base rate of 4.5%, and for costs on an indemnity basis, and for interest on those costs up to 10% above base rate.

The claim was issued in March 1998. The Claimant made an offer to settle in November 2000. The claim was heard in December 2001 and Judgment given in April 2002. Permission to appeal was given to the Court of Appeal where the Claimant succeeded and the Court of Appeal’s Judgment was given in November 2002. Petition to the House of Lords for permission to appeal was refused. The settlement figure was £240,000.00 which was not an award by the Court but a figure “thrashed out between the parties, with the prospect of a hearing if agreement could not be reached”.

On 16th November 2000 a letter was written by the Claimant offering to accept £110,000.00. It stated “the Claimant makes a Part 36 Offer in the sum of £110,000.00. You have 21 days from the date of this letter to accept this offer”. The Defendant argued that the letter was not in the proper form to amount to a Part 36 Offer. Moreover the Defendant argued that the claim was the first to be heard by a Court on the liability of Trusts for the sensitisation of staff by latex and the first which established a date of knowledge and that it was therefore reasonable for the claim to be taken to Court. Moreover, the Defendant argued the claim for the enhanced rate of interest would have the result of a windfall for the Claimant.

The decision

The objection to the format of the offer was based on purely technical points in that it did not comply with 36.5 sub sections (3) and (6). The terms of the letter however were crystal clear. It clearly referred to the whole claim because there was no Counter Claim and it stated the terms on which the offer could be accepted. No query had been raised by the Defendants and no prejudice caused to them.

The Defendant’s argument that this was a test case and therefore they were reasonable in taking it to Trial would have been more impressive if the Defendants had ever stated something to this effect in correspondence or in responding to the Part 36 Offer. A Defendant that wished to clarify the law or establish an outcome on an issue where there was no definitive ruling should not be criticised but had to accept the consequences or as it were, pay for the privilege.

The issue of “windfall” was irrelevant. The Claimant had an entitlement under the Rules. The purpose of the Rule was to encourage realistic settlements at an early stage and there had been no sign of that course being adopted in this case. If the Court did not impose the sanction provided by the Rule there would be no incentive for Defendants to take offers seriously. There was not basis on which it could be argued that the effect of the rule should be mitigated. The awards therefore would be subject to interest at 10% above base rate. Costs would be on an indemnity basis.

Permission to appeal refused.

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