Smithstone v Tranmoor Primary School

Factual and Procedural Background

The Plaintiff, then aged 10 and a pupil at the Defendant school, sustained a minor injury when his fingers were trapped in a door on 25 September 2018. A claim alleging negligence and breach of the Occupiers Liability Act 1957 was issued in the county court. The claim entered the Low Value Fixed Costs regime following a Claims Notification Form submitted to the Protocol portal on 31 October 2018. On 13 December 2018 the Plaintiff made a Part 36 offer of a 90/10 liability split; the Defendant rejected it on 19 December 2018. Proceedings were issued, the Defendant denied liability and pleaded contributory negligence; the matter was allocated to the Fast Track and listed for trial. The Plaintiff made a without prejudice monetary offer of £3,500 on 18 March 2020 which was not accepted. At the Fast Track hearing on 26 November 2020 the Defendant's witness failed to attend and the parties agreed a global settlement for £2,650, which was approved by Deputy District Judge Khan under CPR r 21.10. DDJ Khan decided that fixed costs applied and ordered fixed costs summarily assessed at £7,114.50. The Plaintiff obtained permission to appeal the costs decision more than three years later; the appeal was heard by Judge Baddeley on 19 August 2024 and then proceeded further to the present court.

Legal Issues Presented

1. Whether the court's sealed Form N24 constituted a "judgment" for the purposes of CPR 36.17.
2. Whether a claimant's Part 36 offer proposing a liability split (90:10) without specifying a monetary sum can, in principle, engage CPR 36.17(4).
3. Whether, on the facts of this case, the outcome was "at least as advantageous to the Plaintiff as the proposals contained in the Plaintiff's Part 36 offer" such that CPR 36.17(4) applies.
4. If CPR 36.17(4) does not apply, whether it would be "unjust" under CPR 36.17(5) to confine the Plaintiff's solicitors to fixed costs.

Arguments of the Parties

Plaintiff's Submissions

• Attorney Latham and Attorney Barnstaple contended DDJ Khan erred in law by not awarding the consequences in CPR 36.17(4) where a judgment was at least as advantageous to the Plaintiff as the Plaintiff's Part 36 offer, and there was no finding that such consequences would be unjust.
• They argued Judge Baddeley wrongly felt bound by Mundy v TUI UK Ltd and that Mundy was decided per incuriam and should be overruled.
• They submitted the Defendant's conduct in running the case to trial without making any liability offer justified use of the CPR 36.17(5) escape clause to avoid confining recovery to fixed costs.

Defendant's Submissions

• Attorney Kay and Attorney Ralph submitted the global settlement before DDJ Khan was for approval under CPR r21.10 and did not constitute a "judgment" engaging CPR 36.17.
• Alternatively, if judgment had been entered, the Defendant argued the agreed monetary settlement was not "at least as advantageous" as the Plaintiff's Part 36 liability offer because CPR 36.17(2) requires monetary comparison, the 90:10 offer specified no money sum and invited a concession of liability which was never made or found, and the settlement sum was lower than 90% of the pleaded/claimed sum.
• The Defendant relied on AB v CD for the proposition that a Part 36 offer must contain a genuine element of concession to which significant value can be attached.
• The Defendant argued that permitting CPR 36.17(4) consequences would be unjust on the facts, particularly in a low value money claim where liability was not separately determined and the 90:10 offer was not a genuine attempt to settle.

Table of Precedents Cited

Court's Reasoning and Analysis

The court analysed four central questions.

1. Whether the sealed Form N24 was a "judgment". The court examined the wording of the N24 and authorities (notably Vanden Recycling). It concluded the document and its paragraphs operated both as an order and a final decision (a "judgment") for the purposes of CPR 36.17.

2. Whether a 90:10 liability-only Part 36 offer can, in principle, engage CPR 36.17(4). The court reviewed authorities, including Huck v Robson and Broadhurst v Tan, and concluded that liability-only offers can be genuine settlement attempts and, in principle, capable of engaging Part 36 consequences. The court disagreed with the reasoning in Mundy to the extent that it suggested liability-only offers are ineffective as a matter of principle.

3. Whether, on the facts, the outcome was "at least as advantageous" to the Plaintiff as his Part 36 offer. The court emphasised that liability was never determined: the Defendant did not admit liability and no finding of 100% liability was made. Because there was no determination of liability or comparable apportionment, it could not be said that the result was at least as advantageous to the Plaintiff as a 90:10 liability apportionment. Thus CPR 36.17(4) did not apply on these facts.

4. Whether it would be "unjust" to confine the Plaintiff's solicitors to fixed costs. The court rejected the Plaintiff's submission. It applied Webb and concluded that the Plaintiff had not overcome the substantial burden required to show it would be unjust to apply the fixed costs regime. The Defendant's conduct in running the case to court did not, by itself, justify departure from fixed costs.

Holding and Implications

DISMISSED

Holding: The appeal was dismissed. The court held that (a) the sealed Form N24 was a judgment for Part 36 purposes; (b) in principle a claimant's liability-only Part 36 offer (such as a 90:10 split) can engage CPR 36.17(4); but (c) on the facts of this case—where liability was neither admitted nor determined—the outcome was not "at least as advantageous" to the Plaintiff as his Part 36 offer, so CPR 36.17(4) did not apply and the Plaintiff's solicitors were properly confined to recovering fixed costs.

Implications: Direct consequence is that the Plaintiff remains limited to fixed costs as ordered below. The court recorded that Mundy v TUI UK Ltd should not be followed as establishing that 90:10 liability offers are ineffective in principle; nevertheless, factual absence of a determination of liability prevented Part 36(4) consequences in this case. The decision does not award additional sums under CPR 36.17(4) and affirms the difficulty of showing it would be "unjust" to apply the usual Part 36 cost consequences.