PI Brief Update

Both parts of a combined Part 36 offer have to be beaten for Part 36 cost consequences to follow (and leapfrog permission given on child 'lost years' claim): CCC (by LF MMM) v Sheffield Teaching Hospitals [2023] EWHC 1905 (KB) - Nancy Kelehar, Temple Gard

23/08/23. Mr Justice Richie addressed two matters of importance. First, how the court should assess whether a combined Part 36 offer has been beaten. Second, whether an appeal point in relation to a child’s claim for lost years should be certified for a leapfrog appeal to the Supreme Court.

The underlying claim related to an 8-year-old girl suffering from cerebral palsy and a reduced life expectancy caused by the Defendant’s failure to prevent severe chronic partial hypoxic ischaemia before and during her birth.

Part 36 Issue

At trial, the Claimant beat her own Periodical Payment Order (PPO) offer by a substantial amount but failed to beat her lump sum offer.

At the consequentials hearing, the court had to address the question of whether this amounted to a judgment “more advantageous to the Claimant”, i.e. better in money terms, than her offer. The Claimant argued that they had beaten their Part 36 offer if the PPO is capitalised into a lump sum by using the agreed lifetime multiplier. On this basis, the capital value of the awarded amount plus the lump sum would be more than the offered amounts calculated in the same way.

However, it was held that to reintroduce the multiplier to determine the value of the PPO would be contrary to principle where the purpose of the PPO is to avoid using a multiplier as life expectation is so uncertain [16]. Richie J placed emphasis on the fact that under Part 36 both single offers and combined offers are permitted, that a combined offer is not the same as two individual offers, and that the Claimant could have made individual offers but chose not to do so [17].

There is no prior authority on what “better in money terms” means regarding a combined offer which includes a lump sum and PPO. Richie J recognised that the inducements under Part 36.17 are to encourage good practice and create an incentive to settle claims by using sanctions and rewards. In line with those objectives, the system should be kept simple: a combined offer has two parts and no capitalisation of the PPO part is relevant. Therefore, “for an offeror to beat her Part 36 combined offer, she has to beat both parts. If she wishes protection for each part then individual offers can be made”. [18]

Leapfrog Appeal

Richie J recognised that a claim for ‘lost years’ (awarded to injured, live Claimants who die earlier than they would have) is historically contentious. The court identified an apparent inconsistency between the leading authority for child ‘lost years’ claims (Croke v Wiseman [1982] 1 WLR 71) when compared with the leading authorities for adults (Pickett v British Rail [1980] AC 136) and teenagers (Gammell v Wilson [1982] 2 AC 27).

The court summarised the ratio of Croke as follows: “that in the case of a severely disabled child, who could not and never would acquire financial dependants the claim for lost years damages was not permissible” [36]. However, Pickett did not involve determination of whether or not the claimant will acquire dependants. This inconsistency of reasoning was identified by the Court of Appeal in 2007, but it felt bound to follow Croke [37].

Richie J considered this to be a point of general public importance, that the issue had been fully argued and considered in the Court of Appeal and the concern had been made plain [44]. Accordingly, the question of whether the Claimant (aged 8) is entitled to claim for damages for the lost savings she would have accrued during her lost years was certified for a leapfrog appeal.

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