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Gemma Ballard v West Sussex Partnership NHS Foundation Trust (2018) EWHC

16 April 2018

An interesting case on the issue of Part 36 offers was heard in the case of Gemma Ballard v West Sussex Partnership NHS Foundation Trust. This matter concerned a clinical negligence case where the matter proceeded to trial on the issue of quantum on 2 and 3 March 2017.

At trial the judge awarded damages in the sum of £23,315.13.

Prior to trial on the 25 January 2016 the defendants had made a net offer of £49,180.57. On 8 February 2017 shortly before trial the defendants wrote two letters to the claimant’s solicitors: one letter withdrew the earlier offer; and the second letter put forward a further Part 36 offer in a net sum of £29,180.57.

The crucial point about this letter is that it stated in its final paragraph “for the avoidance of doubt if the Claimant fails to obtain a Judgment more advantageous than the offer made in this letter the Defendant will seek an Order that the Claimant shall pay both parties’ costs from 1 March 2017”.

The letter did not deal with the issue of costs arising from the expiry of the date of the first Part 36 offer (which had been withdrawn) and the period up to expiry of the second Part 36 offer which expired just before trial on the 28 February 2018.

The claimant had therefore failed to beat either Part 36 offer. The defendant was clearly entitled to its costs arising from the second part 36 offer, but what about costs arising from the first Part 36 offer that had been withdrawn?

At the first hearing costs were awarded for the defendant from the date of expiry of the first Part 36 offer. The court said it was entitled to take this offer into account when determining costs (see Part 44.2(4)(c)):

“in deciding what order (if any) to make about costs, the Court must have regard to all the circumstances, including- any payment into court or admissible offer to settle made by a party which is drawn to the Court’s attention and which is not an offer to which costs consequences under Part 36 apply”.

The claimant appealed this decision on the basis that the judge in deciding costs had failed to consider the terms of the second letter when exercising his discretion in relation to costs and the paragraph highlighted above where the defendant had appeared to limit its costs entitlement.

On appeal it was noted that the judge was heavily influenced by the fact that the claimant could have saved a great deal of expense by accepting this first offer but the judge was wrong to regard the second offer as irrelevant and the udge stated:

“in my judgement the Defendant cannot escape from the precise terms of the final paragraph the second offer and the result it is really the first offer that becomes irrelevant”.

The defendant was therefore only entitled to its costs from 1 March 2017 in accordance with their second Part 36 letter.

This case is a useful reminder of the need to consider carefully the costs consequences before withdrawing a Part 36 offer. One option to avoid the above situation would have been to change the terms of the earlier Part 36 offer after the expiry of the initial 21 day period (pursuant to CPR 36.9), rather than withdrawing it. That way the defendant could still have relied upon the costs consequences of the offer.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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