Part 36 Offers and the effect of their withdrawal
Ballard v Sussex Partnership NHS Foundation Trust
High Court (QBD)
15 March 2018
The High Court has recently been required to address on appeal, the issue of the effect of a withdrawn Part 36 Offer where a claimant has failed to achieve a judgment more advantageous than the defendant's Part 36 Offer. Andrew Cousins analyses the decision in Ballard v Sussex Partnership NHS Foundation Trust (2018).
The claimant had brought a claim for personal injury and loss arising from an incident at work which took place in June 2012. The trial related to quantum only, liability having been admitted by the defendant. At trial, the claimant was awarded £17,000 general damages and £5,488.32 special damages which, together with interest totalled, £23,315.13.
The defendant had made various offers in the claim; the first offer which had been made was on 25 January 2016 was a Part 36 offer for £50,000 gross. This offer was withdrawn by the defendant on 8 February 2017 and a second Part 36 offer of £30,000 gross was made by the defendant. The letter sent with the second Part 36 offer made it clear to the claimant that if the claimant failed to do better than that offer then the defendant would seek an order that the claimant should pay the costs from the expiry of that second offer.
At first instance, the judge held that the claimant was liable for costs from the date of expiration of the relevant period of the first offer, and that the second offer had no relevance to that. The withdrawal of the first offer was relevant only to the extent that the automatic provisions of Part 36 no longer applied but, in the judge's discretion it was still appropriate to award the defendant the costs from the date that the original Part 36 offer expired.
The claimant appealed and in the appeal it was common ground that the claimant was liable for the costs from 1 March 2017 (the expiration of the relevant period applying to the second Part 36 offer), and that the claimant was entitled to her costs up until the expiry of the first offer. The issue for the court was what happened to the costs in between this period and who should pay them.
In allowing the appeal Mr Justice Foskett commented that, with hindsight, the claimant should have accepted the first Part 36 Offer, but having withdrawn that offer the defendant could not seek costs protection from the expiration of the first relevant period. He noted the wording in the letter accompanying the second offer and said that he did not think it was fair on the claimant for the defendant now to be arguing for another position.
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