Court of Appeal overturns ruling in favour of claimant that accepted part 36 offer late

Shaw: no clear and identifiable injustice

Uncertainty regarding a claimant’s prognosis is part of the usual risk of personal injury litigation and not enough to justify disapplying the usual consequences of accepting a part 36 offer out of time, the Court of Appeal has ruled.

The court said in Briggs v CEF Holdings that it was not enough to show that it was difficult to form a view on how the litigation would go.

According to a report on the case by Plexus Law, which acted for the defendant, the claimant injured his foot in the defendant’s workplace in January 2010. Proceedings were issued in January 2012 with an unfavourable prognosis for the injury provided by the claimant’s orthopaedic surgeon.

The defendant made a part 36 offer of £50,000 in September 2012. The claimant neither accepted nor rejected it.

The claimant was granted a stay of proceedings and had foot surgery in May 2013. In April 2014, the stay was lifted, at which point he increased his claim to £248,000. The claimant also produced a new report from a new orthopaedic surgeon and although the prognosis was “slightly better”, overall it remained unfavourable.

In October 2014, following disclosure of the defendant’s surveillance evidence, the claimant’s expert altered his opinion in the parties’ orthopaedic experts’ joint statement.

This brought it more in line with the opinion of the defendant’s expert, concluding that the claimant would be able to work until retirement age.

A trial was fixed for early 2015, but in advance of this the claimant applied to vacate the trial and in June 2015 accepted the part 36 offer.

He then successfully applied under CPR rule 36.13(5) to alter the usual consequences of part 36, and at first instance the defendant was ordered to pay his costs up until 30 October 2014. The judge accepted that, as the prognosis had been uncertain until the joint statement, it would be unjust to apply the usual 21-day acceptance period.

On appeal, the Court of Appeal said it was important not to undermine the salutary purpose of part 36 but at the same time the court should not conduct a microscopic examination of the case.

It was for the claimant to demonstrate that it would be unjust to order the usual consequences,

A Lawtel report of the case said the court considered the decision in SG (A Child) v Hewitt (Costs) [2012] EWCA Civ 1053, where there had been difficulties in forming a prognosis following brain damage to a child.

There the court had applied the same principles and it was a clear case “on the other side of the line from the instant case where, as a contingency of the litigation, it had simply been hard to work out how it might go”.

Plexus said the court found that, whilst it was not suggesting the claimant’s injuries had been exaggerated, the overall process and timescales of the litigation provided some cause for concern – in effect, there was no discernible reason to distinguish this case from any other involving the usual risks of litigation.

Questions were also raised as to the point at which the claimant opted to accept the offer.

The stay may have been relevant had it promptly followed the part 36 offer but in reality there had been a significant time lapse. Even without a finding of exaggeration by the claimant, the amount of the claim had been greatly increased following the stay.

The court concluded that the district judge had erred in that he did not give proper effect to part 36 by properly identifying injustice.

Plexus partner Louise Shaw said: “One of the main purposes of part 36 offers is to transfer the risk from the defendant to the claimant, in the event that an offer is not accepted.

“Uncertainty regarding the claimant’s prognosis is part of the usual risk of litigation; it is not enough to show that it was difficult to form a view on how the litigation would go.

“The district judge had been wrong to not make the usual costs order following late acceptance where there was no clear and identifiable injustice.”

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