Costs – CPR 36.14(1) – Appellant failing to accept payment-in by respondent in settlement of personal injury claim – Amount of claim subsequently increased – Judgment at trial for £51 more than amount of payment-in – Appellant refused costs – Whether judgment more advantageous than position under CPR 36 offer such that appellant entitled to costs – Whether circumstances other than relative financial values relevant in determining balance of advantage – Appeal dismissed
The appellant brought proceedings against the respondent airport operator in respect of an ankle injury sustained on its premises. The respondent conceded liability and was willing to consider any reasonable claim. In November 2003, the appellant’s solicitors sent a medical report to the respondent and submitted a schedule of loss in the sum of £2,170. The respondent made an offer of £3,386, which was in addition to £520 that had already been paid by way of interim payment; the appellant refused that offer. The amount of the appellant’s claim was subsequently increased to more than £5,000. In June 2006, the respondent made a payment into court of £4,000 under CPR 36. The appellant subsequently filed a further schedule of losses in an increased sum of more than £19,000. The parties did not reach an agreement and the matter went to trial.
Ultimately, judgment was entered for the appellant in a total sum of £4,686 inclusive of interest. In argument on the issue of costs, a dispute arose over whether the appellant should be awarded her costs on the basis that she had obtained a judgment more advantageous than the respondent’s CPR 36 offer even though she had beaten the respondent’s payment-in by only a modest sum. The appellant submitted, by reference to earlier practice, that beating the payment-in by even £1 would suffice to entitle her to her costs. The respondent contended that, following the amendments to the CPR in April 2007, the judge’s discretion went beyond a strict financial comparison and that the court was entitled to consider all the circumstances in deciding where the balance of advantage lay.
The judge took into account the appellant’s lack of response following the CPR 36 offer and the manner in which the case had been conducted since June 2006, and concluded that the monetary judgment obtained could not be said, for the sake of a margin of a few pounds, to be more advantageous to the appellant than the position in June 2006. He held that the respondent was, in practical terms, the successful party in the litigation and awarded its costs from June 2006, with no order for costs up to that date. The appellant appealed.
Held: The appeal was dismissed.
The purpose of the amendment to CPR 36 was to replace the old system of payment-in by substituting a system of offers to settle, and applying the same costs consequences irrespective of whether the offer was for the payment of a sum of money in a money claim or an offer of terms and conditions in a non-money claim. The previous practice for the latter became the uniform approach for both, such that the same questions arose under CPR 36.14(1), namely whether the judgment was more advantageous than (CPR 36.14(1)(a)), or at least as advantageous as (CPR 26.14(1)(b)), the offer. In non-money cases, where there was no yardstick in pounds and pence by which to make the comparison, all the circumstances had to be taken into account. There was no reason why the rule should be different where a money claim was involved. Although a purely monetary comparison produced clarity and reduced the scope of arguments over costs, money was not the sole governing criterion under the modern approach. CPR 36 encouraged both sides to make offers to settle, with compromise promoted in the interests of the litigants, the court and the administration of justice as a whole. Litigation was time-consuming and costly in both financial and emotional terms. Those were appropriate factors to take into account when deciding whether the dispute had been worthwhile.
It followed that the judge had been correct in looking at the case broadly. He had been entitled to take into account the fact that the extra £51 gained was more than offset by the irrecoverable cost incurred by the appellant in continuing to contest the case for as long as she had and the added stress upon her in waiting for the trial and in the trial process. No reasonable litigant would have embarked upon such a campaign for a gain of £51. He had been entitled to find that the appellant had failed to obtain a judgment more advantageous than the offer and to order her to pay the respondent’s costs that were incurred after the time for accepting the payment-in had expired. His decision to make no order for costs before that date was justified having regard, inter alia, to the appellant’s refusal of an earlier reasonable offer and the way in which her claim had become exaggerated.
John Coughlan (instructed by Forum Law, of Solihull) appeared for the appellant; John Snowden (instructed by Barlow Lyde & Gilbert) appeared for the respondent.
Sally Dobson, barrister
