Michael Richard Cashman –v- Mid Essex Hospital Services NHS Trust  EWHC 1312 (QB)
High Court overruled a decision by a Costs Master not to allow the 10% uplift awarded to a party for beating their own Part 36 offer
The Claimant brought a successful claim for clinical negligence against the Defendant following the death of his wife. Damages were settled in the sum of £90,000.00, with the Claimant’s costs to be paid on the standard basis, to be assessed if not agreed. The Claimant duly served their bill, claiming costs in the region of £262,000.00. Further to the Defendant serving their points of dispute, the Claimant made a Part 36 offer to settle their costs in the sum of £152,500.00.
At the subsequent Detailed Assessment Hearing, Senior Costs Judge Master Gordon-Saker assessed the bill in the total sum of £173,693.78. As the assessed figure was higher than the Claimant’s offer, CPR 36.14 (3) applied, however, the Master held that it would be “unjust to require the Defendant to pay an additional amount…of £17,000.00”. Instead, the Master awarded interest on the bill of 10.5%, costs of assessment on the indemnity basis and 10.5% interest on said assessment costs.
Master Gordon-Saker went on to explain his reasoning, stating that in his opinion…
“…costs have to be treated slightly differently to judgments. Generally, the only issue at assessment is how much. Had the rule permitted me to allow a figure fixed by applying the prescribed percentage to the difference between the sum which the claimant offered to accept and the sum which was allowed, then I think that may have been a just result, but that is not what the rule anticipates. In circumstances where there has been a significant reduction in the claimant’s bill, it seems to me that it would be unjust to reward the claimant with an additional amount prescribed by 36.14(3)(d).”
Mrs Justice Slade DBE disagreed.
“In my judgment the Master erred in relying on the degree of reduction made on assessment to the costs claimed as rendering it unjust to make such an award in circumstances in which the Part 36 offer was lower than the sum at which the costs were assessed.”
The amendment to CPR 36 was brought in as part of the “Jackson reforms” and was envisaged as a way of incentivising Claimants into making reasonable and timely Part 36 offers early in their case, entitling them to the 10% uplift if the offer was subsequently vindicated. In his ruling, Master Gordon-Saker had evidently placed more stock on the hefty reduction to the amount claimed in the bill than he had to the fact that the Claimant had beaten their own Part 36 offer, inferring that the Claimant should not be rewarded when their bill had been so heavily reduced. Mrs Justice Slade DBE, however, held that rather than the 10% being unjust to the Defendant, it would have been unjust to deprive the Claimant of the 10%, and therefore overturned the Master’s ruling.