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08 February 2018
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90% part 36 offer shortly before trial was a genuine attempt to settle, says High Court

The High Court has rejected the argument that a part 36 offer to settle a clinical negligence claim for 90% of its value was not a genuine offer because it was made shortly before trial.

JMX (A child by his Mother and Litigation Friend, FMX) v Norfolk and Norwich Hospitals NHS Foundation Trust [2018] EWHC 185 (QB) related to the brain damage sustained by a boy when he was born in 2008. The claimant won the liability-only trial, with damages to be agreed or assessed in due course.

On 6 October 2017, the claimant's advisers put forward a part 36 offer on his behalf to accept 90% of the damages to be agreed or assessed in due course. It expired on Friday 27 October, effectively one working day before the trial started on 31 October.

The offer was not accepted and the claimant sought the usual consequences that came with achieving an outcome at least as advantageous as his part 36 offer.

The defendant argued that the offer was not a genuine attempt to settle the case because 10% did not reflect a realistic assessment of the risks of the litigation.

Mr Justice Foskett ruled: “While it is unwise ever to say ‘never’, I do consider this kind of argument to be one which could hardly ever succeed. How one side perceives the risks in a piece of litigation (whether in the clinical negligence sphere or any other sphere) will almost invariably be different from the way the other side perceives them… Quite how a judge can successfully embark on the kind of exercise I am being invited to embark upon is very difficult to see.”

The judge expressed distaste at the idea of embarking on something akin to a mini-trial to determine how the case should have looked to the offeror before the offer was made, and in any case said there was no need to do so here.

He rejected the suggestion that clinical negligence cases were “notoriously hazardous” and could seldom be regarded as “open and shut”, saying: “There are 'open and shut' cases and… the NHSR (formerly the NHSLA) admits liability commendably early in cases where it is obviously right to do so and where there is plainly no defence.”

When an offer to accept 90% was made in a claim like this, “I would regard it as a case where the claimant's team regard the claim as very strong, but is prepared to offer a modest discount to secure absolute certainty of obtaining substantial compensation. That is what [counsel for the claimant] says prompted the offer in this case and I have no reason to doubt that that was so.”

To decide otherwise would mean that a 90% settlement in the clinical negligence sphere would no longer be offered or accepted, Foskett J said. Further, “10% is not a token discount, particularly at a time when the level of damages in serious cases is very significant”.

Foskett J stressed that there was nothing wrong about the defendant electing to contest the case, and the decision not to accept an offer “may be perfectly understandable and reasonable even if, in due course, it turns out to have been the wrong one. It is simply a reflection of the litigation risk that each party has to evaluate”.

Dominic Nolan QC and Eva Ferguson, instructed by Ashtons Legal, acted for the claimant, with David Westcott QC, instructed by Kennedys, for the defendant.

 

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