Neutral Citation Number: [2016] EWCA Civ 666

Case No. B3/2015/3424 
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Royal Courts of Justice 
Strand
London, WC2A 2LL 

Date: Friday, 10 June 2016
 
B e f o r e: 

LORD JUSTICE JACKSON 
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Between: 
MANNA
Claimant

v 

MANCHESTER UNIVERSITY HOSPITALS NHS FOUNDATION TRUST
Defendant 
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DAR Transcript of the Stenograph Notes of  
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Mr R Seabrook QC (instructed by Hempsons) appeared on behalf of the Defendant

The Claimant was not present and was not represented  
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J U D G M E N T(Approved) 
1.	LORD JUSTICE JACKSON:  This is a renewed application for permission to appeal on additional grounds.  
2.	The facts giving rise to this application are as follows.  The Claimant was born on 20 December 1996, so is now aged 19.  As a result of incidents at the time of his birth, he suffered severe brain damage.  As a result of that brain damage, he has bilateral tetraparetic cerebral palsy and very severe cognitive, social and communication impairments with profound autism.  
3.	The Claimant made claims against the health authority which had the care of his mother at the time of his birth.  That claim was settled on the basis of 50 per cent liability.  In June 2015 there was a trial before Cox J to deal with quantum of damages.  The judge dealt with a large number of issues, in some instances leaving the parties to calculate the arithmetical consequences of her decisions.  
4.	In relation to accommodation, the judge decided that the Claimant's mother and stepfather were entitled to purchase a new home.  They were also entitled to recover the costs of adapting the new home.  The judge held that the Claimant's natural father, who was by then separated from the natural mother, was entitled to purchase a new home and to carry out adaptations to that new home.  The quantification of the accommodation claims would follow the principles laid down by the Court of Appeal in Roberts v Johnstone.  
5.	The judge also had to deal with major issues concerning the costs of continuing and future care.  Broadly speaking, the judge accepted in large measure the case of the Claimant as opposed to the case of the Defendant as to the severity of the Claimant's disability and the extent of his care requirements.  
6.	The issue arose at the end of the case as to costs.  The Claimant applied for costs on the indemnity basis really on two grounds.  First, the Claimant relied upon an offer made by e‑mail on 8 June to the Defendant's counsel and repeated by e‑mail on 10 June to the Defendant's solicitors.  That offer was to accept financial terms somewhat less favourable than the Claimant eventually obtained at trial.  The offer was not made under part 36 of the Civil Procedure Rules.  Indeed, it hardly could have been because the trial was due to start and did indeed start on 15 June.  
7.	The judge accepted the Claimant's submissions in relation to costs and she awarded costs on the indemnity basis as from 11 June 2015.  The reasons which the judge gave were that there had been no proper negotiation after the Claimant's offer.  The Claimant had not only achieved a better result than he had offered to accept, but also the conduct of the defence was worthy of condemnation.  There was no criticism of the Defendant's counsel himself but, said the judge, the case which counsel was instructed to put and did put involved a sustained attack upon the credibility of the Claimant's father and mother.  The case which the defence had put had caused distress to the parents and that was a feature relevant to the award of costs.  In the result, as I say, the judge awarded indemnity costs as from 11 June 2015.  She directed that costs up to 11 June should be assessed on the standard basis.  
8.	The Defendant health authority was aggrieved by the judge's assessment of damages and applied for permission to appeal to the Court of Appeal on four grounds.  The first ground advanced is that the judge was wrong to quantify the claim for the new principal home for the Claimant where he lived with his mother and stepfather at a projected cost of £500,000 together with adaptation costs of £275,000.  
9.	The second and third grounds of appeal both challenged the award of damages in respect of the home to be purchased by and adapted by the Claimant's natural father.  Those two grounds challenged not only that award of damages in principle, but also the quantification of that head of damages.  
10.	The fourth ground of appeal advanced was that the judge erred in ordering costs to be assessed on the indemnity basis from 11 June 2015.  
11.	When I considered this case on the papers, I came to the conclusion that the Defendant had a sufficiently high prospect of success on grounds two and three to warrant the grant of permission to appeal.  I reached the opposite conclusion in respect of grounds one and four.  I therefore made an order on the papers granting permission to appeal on grounds two and three only.  
12.	The Defendant health authority accepts the decision of this court in relation to ground one.  On the other hand, the Defendant renews its application for permission to appeal on ground four.  Mr Robert Seabrook QC has argued that proposed ground of appeal briefly before me today.  
13.	Mr Seabrook submits that the offer made by the Claimant came very shortly before trial.  It was at a time when the Defendant had been inundated by a large amount of fresh disclosure.  There had been changes in the nature of the Claimant's case at a late stage.  There had been proper attempts to negotiate a settlement which had come to nothing during May 2015.  In the circumstances, no criticism can be levelled at the Defendant for failing to accept the offer made on the Claimant's behalf on 8 and 10 June 2015.  
14.	Turning to the issue of conduct, Mr Seabrook has taken me through the points made by the judge concerning conduct of the defence.  Mr Seabrook has also taken me through the relevant evidence and the findings of the judge on those matters.  
15.	Since I am minded to grant permission to appeal on ground four, it would not be helpful or appropriate for me to go into those issues at any length, suffice it to say that I see the force of the arguments which Mr Seabrook has deployed this morning.  My initial view was that the judge's decision on costs was a proper exercise of her discretion with which the Court of Appeal would not interfere.  Mr Seabrook has persuaded me by his oral submissions this morning that there are serious grounds for arguing that the judge erred in principle in awarding indemnity costs as opposed to standard basis costs in the circumstances of this case.  
16.	I also bear in mind that the question whether costs should be assessed on the standard basis or the indemnity basis is a question of growing importance in view of other recent decisions of the Court of Appeal and the interaction between the rules governing the basis on which costs are assessed and other recent developments in civil procedure.  
17.	For all of those reasons, and contrary to my decision on the papers, I accede to this application and give permission to appeal on ground four.