In this article, we discuss the judgement of Briggs v CEF Holdings Limited  EWCA Civ 2363. The Court of Appeal ruled that, even though litigation was uncertain, this was not enough to explain why the offer was accepted late. It is not justifiable to disapply the costs consequences of accepting a Part 36 offer late, even if the claimant’s prognosis was unclear.
The offer in question was made by the defendant, in the sum of £50,000, in September 2012. The claimant, with the consent of the defendant, applied for a stay in proceedings late in May 2013 and District Judge Bellamy granted the stay in July 2013, while the claimant underwent surgery on his right foot.
After the stay was lifted, in April 2014, the claimant ‘drastically’ increased his claim to £248,000. The claimant also successfully applied for a substitute expert. In August of 2014, the defendant disclosed surveillance footage. In October, in light of the defendant’s evidence, a report compiled by the orthopaedic expert stated:
‘Both experts believe on current evidence that he would work to normal retirement age on the balance of probabilities.’
The claimant’s expert concluded that the claimant would be able to work until retirement age.
Consequently, the defendant’s Part 36 offer, made in 2012 was accepted in June of 2015.
The claimant then applied, successfully, to alter the consequences under CPR rule 36.13(5):
At first instance, the claimant was ‘successful in obtaining an order that the defendant pay his costs down to 30 October 2014’, when the optimistic joint expert report was created, as it would be unjust to apply the standard 21-day period to accept because of the claimant’s uncertain prognosis until the joint statement was made in 2014.
On appeal, Lord Justice Gross on appeal, stated ‘it is very important not to undermine the salutary purpose of Part 36 offers, but at the same time not conduct a microscopic examination of the case’.
The judge identified a ‘heavy burden’ on the appellant to prove injustice and establish that the judge’s order ‘fell outside the proper ambit available to him’.
Defendant’s counsel submitted that:
‘…the purpose of Part 36 was to enable a party to protect its position on costs. The offer had been made two years and eight months after the accident and eight months after proceedings had been issued. At the time the offer was made, the claimant had greater information available to him than the defendant. As the case progressed, the only additional information available to the defendant was surveillance evidence – which commenced in March 2013 and was disclosed in August 2014 - but the claimant, of course, was aware of his true condition throughout.’
Gross LJ cited the case of SG (A Child) v Hewitt (Costs)  EWCA Civ 1053 and followed the test of Lord Justice Black, in SG v Hewitt:
‘It is not a question of whether we would have made the order which the judge made. He had a wide discretion and his decision should not be interfered with unless his exercise of discretion was flawed in that he erred in principle by taking into account the wrong matters or reached a conclusion which was so plainly wrong that it could be described as perverse'.’[i]
In SG, the claimant suffered with more complex brain damage injuries and Gross LJ was therefore able to distinguish Briggs on the facts:
‘I can see nothing here which is distinguishable from the usual litigation risk.’
He went on to say that:
‘The reality here was that it was the joint report which undermined the claimant's position. It was not a problem of awaiting the guidance in Mr Chell's October 2014 report. Until then, there were uncertainties in litigation and the usual contingencies of litigation risks’.
There had been a significant time lapse between the offer made and the offer being accepted. It was concluded, therefore, that the judge at first instance had erred in not giving proper effect to Part 36 and choosing not to make the ‘usual costs order where there was no clear and identifiable injustice’.
Neil Rose, ‘Court of Appeal overturns ruling in favour of claimant that accepted part 36 offer late’ (26 July 2017 Litigation Futures) <https://www.litigationfutures.com/news/court-appeal-overturns-ruling-favour-claimant-accepted-part-36-offer-late> accessed 19 February 2018.