Last week’s English Court of Appeal decision in Carver v. BAA PLC [2008] EWCA Civ 412 deals with a narrow issue of civil procedure but has some useful comments for counsel generally.
The narrow issue was, if a party pays into court an amount very slightly larger than the judgment awarded, must the judge accept that the party “won” and impose cost consequences? The issue is similar to making an offer to settle that is very slightly better than the result at trial.
The English Court of Appeal said the trial court can consider the overall effect of the payment and was allowed to exercise discretion and, in the instant case, not award costs. (To similar effect see Walker v. York-Finch (2003), 65 O.R. 3d) 65).
The Court’s language is broadly applicable and may well be useful in
Lord Justice Ward:
Introduction
1. The issue in this appeal boils down quite simply to this: if a claimant beats a payment of money into court by a modest amount, even £1, has she obtained a judgment more advantageous than the defendant's Part 36 offer or is the Court entitled to look at all the circumstances of the case in deciding where the balance of advantage lies? His Honour Judge Knight QC sitting in the
…
31. The answer must, in my judgment, take account of the modern approach to litigation. The Civil Procedure Rules, and Part 36 in particular, encourage both sides to make offers to settle. Compromise is seen as an object worthy of promotion for compromise is better than contest, both for the litigants concerned, for the court and for the administration of justice as a whole. Litigation is time consuming and it comes at a cost, emotional as well as financial. Those are, therefore, appropriate factors to take into account in deciding whether the battle was worth it. Money is not the sole governing criterion.
32. It follows that Judge Knight was correct in looking at the case broadly. He was entitled to take into account that the extra £51 gained was more than off set by the irrecoverable cost incurred by the claimant in continuing to contest the case for as long as she did. He was entitled to take into account the added stress to her as she waited for the trial and the stress of the trial process itself. No reasonable litigant would have embarked upon this campaign for a gain of £51.
33. It is not contested by Mr Snowden that the judge erred in invoking the rule in CPR 36(14)(2) and finding that it would be unjust to make the defendant pay the costs but, as the appellant realistically accepts, that misdirection was probably of no causative effect. On the main question of whether the judge misdirected himself when he found that that the claimant had failed to obtain a judgment more advantageous than the offer, I find in the respondent's favour for the reasons I have set out and I would dismiss this part of the appeal. The judge was entitled to order the claimant to pay the defendant's costs after the time to accept the payment in had expired.
34. As for the judge's making no order for costs for the period after the initial offer to settle and the payment in taking effect, that was very much a matter for the judge's discretion and this Court would be loathe to interfere with it unless he has erred in principle or the exercise of that discretion. The judgment is pithy on this aspect. "Adjacent" may not be the most apposite word to compare the offer of £4,006 with the judgment of £4,435, but the word is not so inappropriate that it demonstrates that the judge has exceeded the generous ambit within which reasonable disagreement is possible. What also struck the judge as worthy of condemnation was the manner in which the litigation had been pursued. Although he did not in paragraph 15 of his judgment refer to Part 44, he had his attention drawn to it during the course of the argument and it must have been well in mind when he gave this ex tempore judgment. He is, after all, a highly experienced judge who must be assumed by this Court to be fully aware of the ordinary rule that costs follow the event, which would have given the claimant her costs, unless the court in the exercise of its discretion decides otherwise. In coming to that decision the court must have regard to all the circumstances of the case including in particular, as provided for in CPR 44.4, such matters as the conduct of the parties, whether a party had succeeded on part of the case, even if he has not been wholly successful and any offer to settle. Under CPR 44.5, conduct of the parties includes conduct before as well as during the proceedings, whether it was reasonable for a party to pursue a particular allegation or issue, the manner in which the party has pursued his claim and whether or not that claim has, in whole or in part, been exaggerated.
35. The November 2005 offer was relevant and it was a reasonable, not a derisory one. It met with no response. It met with no counter-offer. The claim was pursued and, albeit through no fault of the claimant herself, it became an exaggerated claim and she must, alas, bear ultimate responsibility for the manner in which her claim was conducted on her behalf by the different professionals advising her. Her exaggerated claim was withdrawn late in the day. Still no counter-proposals were forthcoming. The events of 25th May bordered on the farcical with offer and counter-offer, withdrawal of offer and purported acceptance of an offer which was not even on the table. This was a small claim in which the defendants admitted liability within months of the accident. To have incurred about £80,000 in costs to contest a claim under £5,000 fills one with despair. In all those circumstances Judge Knight was fully justified in marking his displeasure by making no order for costs.
James Morton
Steinberg Morton Hope &
M2N 6P4
416 225 2777
Blog: http://jmortonmusings.blogspot.com/
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