CPR 36.17 | Claimant Beats Own Part 36 Offer Against “Intransigent” Police

In the High Court of Justice, King’s Bench Division, Mrs. Justice Hill DBE delivered a consequential judgment related to legal costs in the case of Bell v Commissioner of Police of the Metropolis (No. 2), with the judgment handed down remotely on 21 March 2024.

The claimant, Christopher Bell, brought legal action against the defendant, the Commissioner of Police of the Metropolis, alleging breaches under the Human Rights Act 1998 (specifically s.6 for a breach of his right to respect for family life under Article 8 of the European Convention on Human Rights) and in negligence. This action stemmed from the abduction of Mr Bell’s 3-year-old son by his former partner, who then took the child to Brazil, leading to an irreparable damage to the father-son relationship. Mr Bell argued that the police’s failure to act, and in fact their assistance to the abductor, constituted this breach.

In a previous judgment, Bell (No. 1), dated 21 February 2024, Justice Hill upheld Mr Bell’s claims, ordering the defendant to pay £137,999.49 in damages, covering non-pecuniary loss, past pecuniary loss, and further past and future pecuniary loss.

Settlement Efforts

• Prior to trial, Mr Bell made two Part 36 offers (August 2019 for £95,000 and June 2020 for £50,000), which were not accepted.
• His solicitors invited the Defendant to consider sensible settlement of the claim on several occasions, but that the defendant failed to engage in settlement in any meaningful way; and made no offers of his own.
• Mr Bell became eligible for civil legal aid during the course of the proceedings. Accordingly both parties were publicly funded. The defendant’s budgeted costs were £129,129.80; and the Claimant’s were £262,167.80, although, it was said “both parties are likely to have exceeded these budgeted sums“.

Enhanced Interest on Damages (CPR 36.17(4)(a))

Claimant’s Arguments:

• The claimant, represented by Mr. Simblet KC, argued for the application of the maximum enhanced interest rate due to the defendant’s conduct throughout the litigation. He highlighted the lengthy period between the deadline for accepting the first Part 36 offer and judgment, the defendant’s defence of the claim without proper regard to risks, including the destruction of documents and lack of witness evidence. Furthermore, the claimant’s distress was compounded by the defendant’s litigation conduct, emphasising the need for a fair result, which included a non-compensatory element to the interest awarded.

Defendant’s Arguments:

• The defendant conceded to the application of the maximum enhanced interest rate of 10% for most damages but argued for a 5% rate on the £28,000 non-pecuniary loss award. This argument was based on the nature of non-pecuniary damages being different from pecuniary damages, where a claimant has been deprived of money’s use. This suggested a differentiated approach to interest on different types of damages.

Mrs Justice Hill sided with the claimant.

“…it was plain to me that the Claimant has suffered profound and enduring distress due to the Defendant’s officers’ failings. The Defendant’s intransigent conduct of these proceedings, contrary to the obligation on all parties to engage meaningfully with settlement possibilities, has compounded the failures that underpinned the Claimant’s claims. I have no difficulty in accepting that the Defendant’s conduct of the litigation has prolonged and exacerbated the Claimant’s distress. That is a relevant factor when the court is considering the use of compensatory powers in relation to interest.

“Mr Simblet also relied on the “level of disruption” caused to the wider public by the Defendant’s conduct of the litigation. He argued that the lengthy internal police complaints procedure (which identified several key failings by the Defendant’s officers), the extensive involvement of the Defendant’s lawyers and the significant court time required to determine the claims meant that the expenditure of public resources on this litigation, was “truly eye-watering”. It is hard to argue with that assessment.

“He relied on the principle that there is no special rule for public authorities when conducting civil litigation: see, by analogy, R (on the application of Hysaj) v. Secretary of State for the Home Department[2014] EWCA Civ 1633at [42].

“Overall, Mr Simblet contended that each of these matters taken on their own would justify the selection of a rate of interest close to the maximum, but that considered cumulatively, the case for such a rate was even greater.

“In my judgment these submissions are entirely sound. Having read them, I was minded to accept them in full. In fact, in responsive submissions, the Defendant conceded that the maximum enhanced interest rate of 10% should apply to all the Claimant’s damages, save for the award of “general” (non-pecuniary) damages. Accordingly, it appears that the Defendant accepts the force of the criticisms made of his conduct of the litigation, albeit providing no context or, as far as I am aware, apology to the Claimant, or indeed the court.”

….

“…the introductory words to CPR 36.17(4) make clear that the court must order the enhanced interest rate on the Claimant’s damages under subsection (a) unless it considers it “unjust” to do so. Mr Clemens did not suggest in terms that payment of a rate of 10% enhanced interest on the non-pecuniary award would be “unjust” to the Defendant. Nor did the submissions he made address any of the discrete factors set out in CPR 36.17(5) which the court must take into account.

“In fairness to the Defendant I have assumed that Mr Clemens’ submission was intended to suggest that payment of the 10% interest rate would be unjust. I have also assumed that the point set out at [28] above is relevant to the overall “circumstances of the case” which must also be taken into account under CPR 36.17(5) (albeit that it could credibly be said that this is an argument of general application, and not in fact specific to the circumstances of this case).

“Having done so, I reject the argument. In my judgment all the considerations set out at [15]-[26] above, which relate the various factors discussed in OMV to the circumstances of this case, apply with equal force to the non-pecuniary damages award. I also agree with Mr Simblet that it is inaccurate for the Defendant to characterise the very significant anguish and distress the Claimant has suffered for over 10 years, from the date of ROC’s abduction in 2013 to the judgment in this matter, as “akin to future loss”.

“For these reasons I conclude that enhanced interest at the maximum rate of 10% should apply to the entire award, save for the £33,600 element of it which Mr Simblet was content to exclude from this calculation (as much of that figure relates to estimated future losses). That gives a damages figure of £104,399.48.

Additional Sum Under CPR 36.17(4)(d)

The claimant sought an additional sum of 10% on damages, excluding the £33,600 element representing further past and future pecuniary loss.

The defendant did not put up any resistance and accordingly, the Judge awarded the amount sought, int the sum of ££10,439.95.

“As noted above, CPR 36.17(4)(d) requires the payment of an additional sum, not exceeding £75,000, calculated by applying a prescribed percentage to the total sum awarded to the Claimant by the court. As the total sum awarded here was below £500,000, the appropriate percentage is 10%.

“The Defendant could not realistically resist the Claimant’s application for this sum and did not seek to do so.

“The Claimant was again content for the £33,600 element of the award to be excluded from this calculation. Accordingly the parties agreed the figure for this sum at £10,439.95, as 10% of £104,399.48, that being the amount awarded for general damages and past losses.”

Costs on the Indemnity Basis and Enhanced Interest on Those Costs (CPR 36.17(4)(b) and (c))

Claimant’s Arguments:

• The claimant argued for costs on an indemnity basis and enhanced interest on those costs from the date the relevant Part 36 offer period expired. This was based on the same factors that supported the claim for enhanced interest on damages, including the defendant’s litigation conduct and the claimant’s attempt to settle.

Defendant’s Arguments:

• The defendant accepted the principle of indemnity costs and enhanced interest but contested that the claimant was entitled to these in relation to the £33,600 element of the award. The argument centered on the assertion that claimant’s solicitor had allegedly “sat on” information about the £33,600 claim and failed to explain the position to the court, such that the defendant had incurred additional costs in responding to that element of the claim.

The judge found the defendant’s argument about the claimant’s solicitor’s conduct argument unsustainable, highlighting that the defendant had prior notice of the claimant’s potential pecuniary losses.

“The information in question had not been “sat on” for any length of time: the letter which set out the details of the claim was received on 17 November 2023, the Friday before trial, and was provided to the Defendant as soon as realistically possible after taking instructions on it, a matter of days later. The trial was not unduly disrupted by it.

“It was agreed at trial that the timing of the letter was “unfortunate”. I have already found that the 17 November 2023 letter was “consistent with, and the final iteration of, the practice which the parties had hitherto adopted” for updating the Defendant as to increases in the Claimant’s pecuniary losses. The Defendant was afforded time to deal with it and so suffered no unfairness in respect of this claim: Bell (No. 1) at [277].

“Moreover, I have now seen without prejudice correspondence making clear that when the Part 36 offer was made on 30 August 2019, the Claimant’s solicitor advised the Defendant’s solicitor that the Claimant had incurred, or was in the process of incurring £87,000 in costs in the Brazilian proceedings. Further, the Claimant’s solicitor made plain that “if [the Claimant’s] current appeal fails (and we are advised that there is an 80% chance that it will) then further expenses of £105,000 are likely to be incurred”.

“This shows that back in August 2019, before the claim was issued, the Defendant was on notice of an overall claim relating to the Claimant’s pecuniary losses of £192,000 (that being the total of the figures of £87,000 and £105,000 quoted in the Claimant’s solicitor’s correspondence). In fact, the final claim advanced at trial was substantially lower, namely £109,999.49 (that being the total of the £76,399.49 claimed for past pecuniary losses and the £33,600 figure). In those circumstances the submission that the Defendant was somehow ambushed or surprised by the later claim is unsustainable.

“In those circumstances I accept Mr Simblet’s submission that the £33,600 sum claimed was just one of the “vicissitudes of litigation”, the possibility of which the Defendant could have avoided by accepting one of the Claimant’s Part 36 offers. As he pointed out, it was “bad luck” for the Defendant that this occurred, just as it would have been “good luck” for the Defendant if the Claimant had succeeded in the Brazilian proceedings, such that he had had not incurred costs as high as he did.

“For these reasons I do not consider that there is anything unjust in requiring the Defendant to pay indemnity costs in relation to this element of the Claimant’s costs.”

A payment on account of 90% of the Claimant’s budgeted costs

“The Defendant agreed that a payment on account of 90% of the Claimant’s budgeted costs of £262,167.80 was appropriate. This was a sensible concession. It is common to order payments of account of 90% of budgeted costs in cases subject to costs and case management: see, for example, the authorities cited in Puharic v Silverbond Enterprises Ltd [2021] EWHC 389 (QB) at [11].

“However, there is an even greater justification for such an order in this case given that the Claimant is entitled to his costs on an indemnity basis. This effectively means that his legal team may recover costs above and beyond those approved in the costs budget, as the limitations of CPR 3.18 no longer apply. It is likely that the Claimant’s actual costs are higher than those budgeted, not least because of the volume of post-trial submissions that have been required in this case.

“For the reasons the Defendant is ordered to pay £235,951.02 plus VAT on account of costs to the Claimant’s solicitors.”