Mathieu v Hinds and Anor [23.06.22] – costs considerations

Mathieu v Hinds and Anor [23.06.22]

The claimant’s claim was pleaded at £33,617,057. At trial (which commenced on 5 February 2022) the claimant was awarded damages of £3,178,741.64. The claim for provisional damages was successful in relation to epilepsy, but failed in relation to dementia.

The offers

On 10 December 2021, the claimant made Calderbank offers of a) £10,950,000 with provisional damages in relation to epilepsy and dementia to be determined as a standalone issue, and b) £17,050,000 in full and final settlement. Neither offer was accepted by the defendants, and both were withdrawn on 20 December 2021.

On 11 January 2022, the defendants made a Part 36 offer of £3,125,000 and a Calderbank offer of £3,550,000, both in full and final settlement of the claim. The Calderbank offer was not accepted and was automatically withdrawn under its terms on 18 January 2022.

On 13 and 19 January 2022, the claimant made further Calderbank offers of £8,050,000 and £7,250,000 in full and final settlement. Neither offer was accepted, and both were subsequently withdrawn.

On 5 February 2022, the defendants made a further Calderbank offer of £4,000,000.

Costs submissions

The claimant’s assertion was that he was clearly the successful party and that there was no good reason to depart from the general rule, that he should be entitled to his costs in full.

The defendants’ contention was that the claimant should only be entitled to 50% of his costs up to 31 January 2022, on the basis of his conduct, and that the claimant should pay the defendants’ costs from 1 February 2022, on the basis that the claimant had failed to beat their Calderbank offer.

The court’s determination

The claimant’s argument that the defendants had not beaten their Calderbank offer of £3,550,000 was rejected, it being held that the additional £371,258.36 in the offer accommodated the provisional damages claim in relation to epilepsy. The claimant had accordingly beaten the defendants’ Part 36 offer, but had failed to beat two non-Part 36 offers.

CPR 44.2(4)(c) provides that when deciding what order to make in relation to costs, the court will have regard to all of the circumstances, including any admissible offer to settle made by either party, which is not an offer which costs consequences under Part 36 apply.

The defendants argued that as a matter of principle the effect of an admissible Calderbank offer should be considered by analogy with CPR 36.17(2), and further that the defendants, as the successful party for the period following the Calderbank offer, should recover their costs.

In exercising its discretion as to the appropriate order for the post Calderbank offer period, the court considered the judgment of LJ Richards in Coward v Phaestos Ltd [2014], reminding itself that CPR 44.2 provides for a discretion in “almost the widest possible terms and contains no rules as to the way in which the court is have to regard to admissible offers”. Reference was also made to the Court of Appeal’s judgment in Capita (Banstead 2011) Ltd & Anopr v RFIB Group Ltd [2017], where it was explained that whether a Calderbank should be treated as providing the same costs protection effect as a Part 36 offer ‘is quintessentially a matter for the discretion of the trial judge’.

Whilst recognising that the issue was finely balanced, the court rejected the defendants’ arguments that it was the successful party and declined to make the order they sought. The general rule at CPR 44.2(2)(a) that the claimant as successful party should recover its costs applied, subject to an overall assessment of whether to depart from the general rule under the second limb of CPR 44.2(2)(b). Returning to consider the appropriate exercise of discretion under CPR 44.2(4)(c), the court noted that all of the defendants’ offers “were much closer to the final figure awarded by the court than any of the claimant’s” and that overall, there ought to be adverse costs consequences for the claimant.

Taking a ‘broad-brush’ approach, the judge reduced the claimant’s costs by 15% for the period up to 31 January 2022 and by 60% for the period from 1 February 2022.

Comment

This is a useful reminder of the approach the court will take when considering costs where a claimant beats a defendant’s Part 36 offer but fails to beat a valid Calderbank offer:

  • The judgment clearly supports the proposition that an award for provisional damages alone when only “full and final” offers have been made is not enough to avoid costs consequences.
  • A Calderbank offer does not provide the clear and unambiguous protection afforded by Part 36 which leaves matters in the hands of a judge when exercising their discretion. This is wide ranging discretion where all factors will be taken into consideration. The outcome is therefore uncertain and may not be satisfactory.

Related item: Dementia risk and provisional damages