O'Brien v Cowie (No 2)
[2021] SASC 52
•7 May 2021
Supreme Court of South Australia
(Civil: Application)
O’BRIEN v COWIE & ANOR (No 2)
[2021] SASC 52
Judgment of the Honourable Chief Justice Kourakis
7 May 2021
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENTS - OFFER OF COMPROMISE OR OFFER TO SETTLE OR CONSENT TO JUDGMENT PURSUANT TO RULES - GENERALLY
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - INDEMNITY COSTS - RELEVANT CONSIDERATIONS GENERALLY
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - PARTIES AND NON-PARTIES - PERSON UNDER DISABILITY
This is an application for costs to be awarded on an indemnity basis pursuant to r 188F of the Supreme Court Civil Rules 2006. The applicant by her next friend brought a claim for damages in 2017 for severe physical and intellectual injuries suffered during her birth. The respondents initially disclaimed liability for the applicant’s injuries, that remained the position until November 2017. Offers were made by the respondents on 21 August 2018 and by the applicant on 2 October 2018, but neither offer was accepted. By November 2018 the respondents admitted liability but the issue of causation and damages remained in dispute. By December 2019 the respondents admitted causation but the quantification of damages remained in dispute.
On 24 January 2020, the respondents filed a formal offer which was accepted by the applicant. A judge of this Court declined to approve the compromise after taking into account the advice of independent counsel engaged by the applicant. The matter was relisted for trial in March 2021 while further negotiations took place. A further formal offer was filed by the respondents on 5 February 2021 which was accepted by the applicant. On 19 February 2021, the Judge approved the settlement on the basis that the issue of cost be determined by this Court.
Held per Kourakis CJ:
1. The respondents have not met the practical onus of persuading the Court that the default rule set by r 188F should be displaced. Accordingly, the respondents are to pay the applicant’s costs on an indemnity basis from 17 October 2018.
2. The parties are to bear their own costs in relation to the challenge to the decision in Todorovic v Waller (1981) 150 CLR 402.
Supreme Court Civil Rules 2006 (SA) s 3, 187, s 188D, s 188F; Uniform Civil Rules 2020 (SA) r 132.10, referred to.
{Cases Cited}
O’BRIEN v COWIE & ANOR (No 2)
[2021] SASC 52
KOURAKIS CJ: This is a contested application for costs to be ordered on an indemnity basis consequent upon the approval of a compromise of a claim for catastrophic injury suffered by a child. On 26 March 2017 Georgia O’Brien (Georgia) by her litigation guardian, Lawrence O’Brien, brought an action claiming damages for severe physical and intellectual injuries suffered during her birth on 27 June 1999 at the Whyalla Hospital. The cause of the injuries was alleged to be hypoxia caused, or materially contributed to, by the negligence of Dr Cowie, an obstetrician who was responsible for her mother Alison Sturt’s care, and Dr Hammersley, a specialist medical practitioner in obstetrics and gynaecology who was on duty at the Whyalla Hospital when Alison was in labour. I will refer to them jointly as the respondents. The statement of claim summarised Georgia’s injuries as:
• Brain injury with severe intellectual impairment and cognitive disability affecting her communication, daily living, socialisation and motor skills;
• Microcephalia;
• Severe cortical visual impairment;
• Bilateral sensory neural hearing loss and cortical hearing impairment;
• Gross and finer motor skills deficits;
• Maladaptive behaviours; and
• Reduced life expectancy.
Claims were made under the following heads of damage:
• Loss of enjoyment of life;
• Dependency on others for daily living, transport, financial management;
• Loss of employment capacity;
• Medical and allied health treatment costs;
• Case management costs; and
• Funds management costs.
The trial of Georgia’s action was first listed early in 2020. Georgia, by her litigation guardian, accepted an offer filed by the respondent shortly before the trial. However, a Judge of this Court declined to approve the compromise. The trial listing was vacated and the trial was relisted for March 2021.
On 5 February 2021, the respondents filed and served a further formal offer to submit to judgment in the sum of $16,200,000, inclusive of interest and special damages, and in addition to earlier interim payments. On 16 February 2021, the applicant accepted the offer, on the basis that the cost liability of the respondents would be determined by the Court. The compromise reached by the parties was approved by a Judge of this Court on 19 February 2021.
The primary controversy between the parties on this application concerns whether the respondents should be ordered to pay Georgia’s costs on an indemnity basis from 17 October 2018, by reason of their failure to accept an offer to compromise the claim in the sum of $14,000,000 filed by Georgia’s litigation guardian on 2 October 2018 (the operative offer). The operative offer included payment of her costs on a party/party basis. The operative offer was open for 14 days, which period expired at 5:00 pm on 17 October 2018.
For the reasons which follow, I order that the respondents pay the applicant’s costs from 17 October 2018 on an indemnity basis, save with respect to the costs incurred in, and incidental to, the applicant’s contention that the discount rate of three per cent which was fixed by the High Court for personal injury claims about 40 years ago in Todorovic v Waller, be departed from. In respect of those costs, I order that each party bear their own costs.
The relevant rule
The respondents accept that the operative offer was a complying offer within the meaning of r 188F of the Supreme Court Civil Rules 2006 (the 2006 Rules), in that it complied with the formalities prescribed by r 187 of the 2006 Rules. However, r 188D then provided that, had the respondents accepted the offer, their acceptance would not be ‘binding until the Court has approved the compromise’.
Rule 188F relevantly provided:
188F—Costs where complying offer not accepted
…
(2) The provisions of this rule are subject to the overriding discretion of the Court.
(3) When a complying offer is made by a plaintiff and not accepted by a defendant and the plaintiff obtains judgment on the claim to which the offer relates no less favourable to the plaintiff than the terms of the offer—
(a) the costs incurred in respect of the claim up to 14 days after service of the formal offer are unaffected by the making of the formal offer;
(b) the plaintiff is entitled to an order against the defendant for the plaintiff's costs of action in respect of the claim to which the complying offer relates thereafter on an indemnity basis.
The objects of the 2006 Rules at all relevant times were:
(a) to establish orderly procedures for the just resolution of civil disputes; and
(b) to facilitate and encourage the resolution of civil disputes by agreement between the parties; and
(c) to avoid all unnecessary delay in the resolution of civil disputes; and
(d) to promote efficiency in dispute resolution so far as that object is consistent with the paramount claims of justice; and
(e) to minimise the cost of civil litigation to the litigants and to the State.
The litigation context
The operative offer had been preceded by an offer filed by the respondents on 21 August 2018, in which they offered to submit to judgment in the sum of $11,000,000, inclusive of interest and special damages, and in addition to costs on a party/party basis. The offer was expressed to be open for acceptance for 28 days expiring on 5:00 pm on 18 September 2018.
On 22 August 2018, the very next day after the offer was filed, Georgia’s solicitors requested from the respondent a breakdown of that offer. By letter dated 23 August 2018 Dr Cowie’s solicitor declined, relying on the absence of any requirement to do so in the 2006 Rules. Dr Cowie’s solicitor explained that ‘the offer reflects a global assessment of the claim without any discount for liability’. The letter also made the point that the parties had engaged in two separate mediations, and that the respondents had served detailed expert evidence on quantum, including as to life expectancy. The solicitor asserted that the reports provide a complete picture of Georgia’s care needs and the cost of care. The letter concluded, ‘You have all the information reasonably required to consider the formal offer’.
Georgia’s solicitor responded the following day, stating that because Georgia was a litigant under a disability it would be necessary for counsel to provide an opinion to the Court recommending the compromise, and for the Court to approve it. Georgia’s solicitor explained that the breakdown was requested for that purpose. The point being made was that counsel engaged by Georgia to provide an opinion on the compromise proposed by the respondents, and the Court, would not know how the final figure had been calculated.
Dr Cowie’s solicitor’s reply of 24 August 2018 remained generally dismissive of the request for a breakdown, commenting ‘we anticipate that counsel for the plaintiff will provide his advice based on [the] evidence’. However, on 27 August 2018 the requested breakdown was provided, but the respondents’ offer was never accepted.
On 17 October 2018, the last day on which the operative offer could have been accepted, the respondents filed their formal response to it, contending that they could not reasonably be expected to respond to it in the absence of a breakdown of that offer, and requested that they be allowed a further 14 days from the provision of a breakdown. The curious change from the respondents’ solicitors’ earlier position as to their offer, remains unexplained, as does the decision to make the request on the last available day. I suppose that the respondents’ position was that because they had volunteered a breakdown Georgia’s litigation guardian should do the same.
The respondents request was repeated in a letter dated 25 October 2018, after the expiry of the operative offer. Dr Cowie’s solicitor complained that the respondents could not reasonably be expected to decide whether or not to accept the offer, because it was not possible to extrapolate from the breakdown previously provided by Georgia’s solicitor.
Georgia’s solicitor disputed Dr Cowie’s claim that he could not reasonably decide whether to accept the operative offer within 14 days. Georgia’s solicitor pointed out that:
• A formulated claim to age 20 was provided on 15 December 2014;
• A formulated claim for the whole of the plaintiff’s life was provided on 1 September 2016;
• The parties attended a mediation on 16 February 2017;
• On 10 August 2018, the plaintiff provided a further formulation for a second mediation with a detailed breakdown of her claim;
• The parties attended the second mediation on 13 August 2018;
• The defendants had filed an offer on 21 August 2018.
Georgia’s solicitor added that there was no obvious utility in providing a breakdown, because any assessment of damages is ultimately a matter of judgment. The decision in Todorovic v Waller was cited. Georgia’s solicitor also pointed out that counsel for Dr Cowie had accepted that the range of damages was between $10,000,000 and $15,000,000.
The exchanges between the solicitors as to their respective capacity to make decisions about the compromise of the action based on the exchange of evidentiary material and the, albeit privileged, disclosures made in the meditations, deny the validity of the respondents’ contention that there were gaps in the rules which made it difficult for them to evaluate the operative offer. As Dr Cowie’s solicitor asserted in dismissing the request for a breakdown of the respondents offer, the parties were in a position to assess their respective offers in the latter half of 2018.
On 5 November 2018, the solicitor for Dr Cowie replied that the purpose of the request was to ‘identify and narrow the differences if possible’. His solicitor invoked the object of the rules to facilitate and encourage the resolution of civil disputes as well as to promote efficiency. It concluded:
The plaintiffs’ current position in refusing to provide a breakdown is inconsistent and unnecessary. Consideration of the offer requires us to advise our client on the structure and calculation of the damages claim. We consider that it is in the interest of both parties to be informed of the issues over which the parties are in conflict. The refusal to disclose the plaintiffs’ claim in any reasonable detail only serves to increase the legal costs but not the interests of justice.
Georgia’s solicitor, by her reply, asserted that:
The approach of both defendants in relation to this long-running and protracted litigation has been to deny and delay.
She made the point that particulars of the damages had been provided through plaintiffs’ formulations over many years.
I acknowledge that there is on the face of it some inconsistency in the position taken by Georgia’s solicitor, but the respondents’ first request was not made until the last day on which the operative offer was open and, the second was made after the time for acceptance of the operative offer had passed. The requests bear the hallmarks of a tactical response. Moreover, it should be kept in mind that, for the purposes of preparing an opinion on the approval of the operative offer, counsel engaged by Georgia would have well known how Georgia’s offer had been formulated.
It is necessary to refer next to the defences of the respondents as they stood as at the time that the operative offer would, if it had been accepted, have come before a Judge for approval. That is because the respondents, relying on the decision of the Judge not to approve a compromise for a similar amount in February 2020, contend that it would not have been approved in November 2018. In response, Georgia’s counsel contends that it would have been approved, because there remained a significant dispute as to causation in 2018 which had been resolved by 2020.
Dr Hammersley’s second defence filed on 16 November 2017, admitted that he was the on duty obstetrician at the Whyalla Hospital at the time of Georgia’s birth. It also admitted that he breached his duty of care by failing to ascertain the progress of Georgia’s mother, Alison’s, prolonged labour and by failing to advise Dr Cowie to proceed to deliver the baby, either vaginally or by caesarean section. However, he pleaded that the admitted breach did not cause or materially contribute to any injury, loss or damage suffered by Georgia, in that the conduct of Dr Cowie and the hospital’s midwives constituted a novus actus interveniens.
I pause to observe here that Dr Hammersley’s plea of a novus actus interveniens was plainly an ambitious one. The very risk brought about by his admitted failure to make enquiries was that Dr Cowie and the midwives might not convey relevant information to him and, in the absence of his advice, might not bring the prolonged labour to an end by delivering Georgia vaginally or by caesarean section.
By his third defence filed on 27 November 2018, Dr Hammersley maintained the plea of novus actus interveniens. However, he amended his defence to admit that his breach caused some, but not all, of the injury, loss and damage alleged. There is plainly some tension between that admission and the maintenance of the unqualified plea of novus actus interveniens.
Dr Cowie’s second defence filed on 15 November 2017, admitted that he was filling in for Alison’s general practitioner when Alison was admitted to the Whyalla Hospital as a private patient on 27 June 1999. He also admitted that he provided care to Alison and ultimately delivered Georgia by vaginal instrument delivery and an episiotomy. He admitted negligence by allowing Alison’s labour to continue some hours longer than he should have. The defence was not explicit as to Dr Cowie’s position on whether the negligence he admitted had caused or contributed to the pleaded injuries.
By his third defence filed on 27 November 2018, Dr Cowie admitted the negligence pleaded against him, and that it ‘caused some injury to the applicant’, but denied that it caused all of the injury, loss and damage as alleged.
The third defences of both Dr Hammersley and Dr Cowie were inherently ambiguous as to whether they were admitting that their negligence had cause some material injury such as to entitle the applicant to judgment for damages to be assessed, or whether their defences were that the injury to which they admitted was nothing more than de minimis.
By his fourth defence filed on 19 December 2018, Dr Hammersley admitted that his breach of duty materially contributed to the plaintiff’s injuries, loss and damage. That admission was a reference to the injury, loss and damage pleaded in Georgia’s statement of claim. Moreover, Dr Hammersley expressly pleaded that that admission entitled the plaintiff to enter judgment against him for damages to be assessed. Dr Cowie, in his fourth defence filed on the same day, admitted the injuries pleaded in paragraphs 33, 34 and 35 of the statement of claim and admitted that his breach of duty materially contributed to those injuries. He expressly pleaded that his breach of duty materially contributed to the plaintiff’s injuries, loss and damage. He expressly accepted that judgment could be entered against him for damages to be assessed.
It is next necessary to set out some steps taken by the respondents to narrow the issues arising in the quantification of Georgia’s damages, because they contend that Georgia’s solicitor’s failure to engage in those steps is good reason to exercise the Court’s overriding discretion not to order indemnity costs.
On 14 December 2018, the respondents filed an interlocutory application, seeking orders that Georgia’s solicitors, on instructions from her next friend, engage in a procedure designed to produce a Scott schedule setting out the respective positions of the parties on the heads of damages to be assessed. The first draft of the schedule prepared by the respondents’ solicitors contained sections relating to general damages, employment capacity, past voluntary care, future care, future medicals, future equipment, special damages and fund management. The respondents entered their estimates for each section, which in total amounted to $9,021,130. The orders they sought were that Georgia’s solicitors complete the schedule with their claims or estimates and that the parties then confer on the schedule. Georgia’s solicitors opposed that proposal. The matter was listed for argument. The respondents filed outlines on 7 March 2019. Georgia’s solicitors filed an outline on 13 March 2019. The application was adjourned from time‑to‑time whilst the parties pursued a third mediation.
On 14 October 2019, Georgia’s solicitors served notices to admit facts relevant to the quantification of her damages on both respondents. On 28 October 2019 both respondents applied to strike out those notices.
The notice to admit covered the degree of past and future care of the applicant. There were some drafting difficulties with the notice, which led the Judge to conclude that there would be no substantial savings in terms of time and cost, and for that reason the Judge set the notice aside.
The applicant appealed to the Full Court. The appeal came on for hearing in December 2020. The Full Court suggested that a narrowing of the issues might best be achieved by arranging a joint conference of the occupational therapists engaged by the parties. The appeal was adjourned. The meeting of occupational therapists took place and resolved many of the issues which were in dispute. When the appeal was called back on in February 2021 it was dismissed and the Full Court ordered that costs of the application to strike out the notice to admit before the Judge be the applicant’s costs in the cause. The costs of the appeal to the Full Court were ordered to be costs in the cause.
A third mediation was held on 18 December 2019. It was unsuccessful. On 24 January 2020, the respondents filed a formal offer to submit to judgment in the sum of $13,850,000 inclusive of interest, special damages and fund management fees, in addition to the sum of $105,361.03 already paid (the January 2020 compromise). In effect, the offer was about $45,000 less than the operative offer which was not accepted by the respondents. Georgia, by her next friend, accepted the respondents’ offer on 14 February 2020. However, on 20 May 2020, a judge of this Court declined to approve the compromise after taking into account the opinion of independent counsel engaged by Georgia, who was not trial counsel.
The respondents withdrew their application for the production of a Scott schedule and consented to the associated interlocutory application being dismissed. On 17 June 2020, a judge of this Court dismissed the application.
Between June and September 2020, counsel for the parties held without prejudice meetings on about six occasions, on topics including the breaking down of the components of their respective estimates of damage. The respondents provided a detailed without prejudice written breakdown of their position on each head of damage. In the course of those meetings, counsel exchanged positions on possible compromises, but no formal offer capable of acceptance was made by either side.
The parties’ submissions
The respondents submitted that an order should be made in exercise of the overriding discretion of the Court to depart from the default position set by r 188F that costs be paid on an indemnity basis. The grounds on which the respondents relied were:
(1) It would be unfair to apply the cost consequences to them because the operative offer would not have been approved in November 2020, having regard to the rejection of the January 2020 compromise;
(2) The case was of such complexity in fact and law that responding to the offer was difficult;
(3) There was a gap in the rules which made it difficult for the respondents to obtain the information they required from Georgia, through her litigation guardian, in order to properly consider the offer;
(4) Georgia’s solicitors had frustrated the settlement of the proceeding by:
• declining to give a breakdown of how the offer was formulated; and
• in failing to participate in the Scott schedule process;
(5) After accepting the January 2020 offer Georgia, by her litigation guardian, changed position, in that the opinion provided by independent counsel on the approval application did not recommend approval.
Georgia, by her litigation guardian, contends that the grounds on which the respondents rely, whether considered individually or in combination, are not sufficient to displace the general rule prescribed by r 188F.
I deal first with the respondents’ primary contention that the operative offer, even if accepted, would not have been approved. The contention relies on a historical counterfactual. It requires no small degree of speculation as to what the independent recommendation of counsel might have been if the respondents had accepted the offer, and speculation on how a Judge of this Court might have exercised his or her discretion in chambers. If I were to engage in that exercise I would doubt that the respondents’ curious series of pleadings as to causation would have much affected counsel’s independent advice or the approval of the compromise. I would also doubt that, on an evidence based appraisal, counsel or the Judge would have materially discounted damages for any risk on causation. Indeed, the respondents had indicated in their correspondence that they had not factored a discount into their offer.
Nonetheless, I could not be confident that, on the state of the evidentiary material, the expert reports and the way in which Georgia, by her litigation guardian, was formulating her claim in 2018, that the compromise would not have been approved. The level of care which Georgia’s litigation guardian contended was appropriate and reasonable may have changed over the years. The level of care may have been upgraded because of a better understanding of Georgia’s behaviours and functioning as a young adult.
The reports available before the operative offer was made, and obtained after it was made but before the January 2020 offer, are:
Plaintiffs’ reports Date of report
Dr Timothy Connell (Psychologist) 20.8.17; 23.08.18
Ms Megan Leaney (formerly Barratt) 17.8.12; 01.09.17;
(Occupational Therapist) 20.05.19; 22.08.19
Dr Michael Harbord (Paediatric Neurologist) 22.06.05; 31.10.17;
09.01.18
Defendants’ reports Date of report
Professor Vicki Anderson (Neuropsychologist) 07.02.11; October 2015
Associate Professor Adam Scheinberg 04.03.11; 27.10.15
(Paediatric Rehabilitation Specialist) 04.02.16
Ms Monica Brown (Occupational Therapist) 29.02.16; 08.08.17
Ms Angela McNamee (Occupational Therapist) 14.06.17; 12.01.18;
29.01.18
Mr John Hart (Care Provider) 20.12.17; 25.01.18;
28.02.19
Mr Ian Pearce (Psychologist) 27.03.18
Ms Briony Lock (Occupational Psychologist) 08.05.18
Dr Peter Flett 11.09.18
(Physician in Rehabilitation Medicine)
The January 2020 offer may have been found wanting when measured against the reports of the occupational therapist Ms Leaney and the cost estimates of Mr Hart obtained in 2019 whereas, in their absence, the operative offer may have been approved in late 2018. Moreover, the loss of the difference between party/party costs and indemnity costs in the period of just over a year might also have played a part.
The respondents bear the practical onus of persuading the Court to exercise the overriding discretion in their favour. They therefore must persuade the Court that the offer would not have been accepted. The single circumstance, that the compromise reached in February 2020 was rejected, cannot prove that much.
In any event, as a general rule, it is undesirable that the overriding discretion be exercised on the basis of speculation as to whether or not a compromise would have been approved. The process of approving a compromise is largely inscrutable, based as it is on the privileged opinion of counsel and the evaluation of a judge in chambers.
The approach contended for by the respondents would undermine the purpose of filed offers in their application to litigation in which a party is under a disability. The object of the formal offer rules and r 188F in particular is to encourage the earliest possible resolution of litigation. It should be observed that an offer might be made at any stage of the proceedings. The state of knowledge of a party as to its own case, and the case put against it, will change as litigation progresses. However, r 188F proceeds on the premise that at every stage of the litigation the parties are equally well equipped to make and evaluate offers. Rule 188F also operates on the premise that each party will gain an understanding of the other’s case, sufficient to make or evaluate an offer, through the operation of the rules providing for pre-action and pre‑trial discovery. It should also be observed that r 188A expects that in the ordinary course the offeree should be in a position to respond to a formal offer within 14 days of receiving it, and if the offeree contends that it cannot reasonably decide whether to accept the offer in that time, must identify how long is needed and explain why the ‘additional’ time is required. In the ordinary course, therefore, it will not be a sufficient reason that the offeree would prefer to consider the offer at a much later state of the proceedings, when more is known of the respective cases of the parties. The overall effect of the rules as to formal offers is therefore to encourage the parties to make their best assessment on what is known of the case at any point in the litigation when making or considering whether to accept an offer. In that way, the rules encourage the early settlement of litigation.
It is as important, and perhaps more important, that those objects are achieved in claims brought, or defences made, by persons with disabilities, as in any other case. The object of the rule being to encourage the parties to agree, it is largely beside the point that a compromise may not be approved. It is necessary for them to first agree before the compromise can be submitted for judicial approval. If an offer is accepted but the compromise is not approved, the parties are likely to recalibrate their positions in the negotiations which follow, in order to reach a compromise which is more likely to be approved. In that way, the purpose of the formal offer rules is advanced.
I turn to the respondents remaining grounds. The complexity in fact and law of a claim cannot, in itself, exclude or modify the operation of the formal offer rules. The early resolution of complex claims is as desirable as the resolution of small claims. They are likely to consume substantial public and private resources. Moreover, the dollar amount of a claim is not necessarily an indication of its complexity. This case was not of such complexity, in fact or law, so as to cause the respondents any significant difficulty in deciding whether or not to accept the offer.
A claim that there is a gap in the rules, in the sense that one or both parties would prefer to have greater disclosure and more information, will seldom be a reason, in itself, for excusing a party from the cost consequences of not accepting an offer. As I earlier observed, the formal offer rules are premised on the operation of the rules governing the conduct of litigation and, in particular, those rules providing for discovery and the exchange of evidential material before trial.
The refusal of Georgia’s litigation guardian, to engage in the proposed Scott schedule, does not provide a good reason to exercise the overriding discretion against her. In effect, the respondents’ contention in this respect is an elaboration of their claim that there was a gap in the rules. In addition to the general difficulty in supporting an exercise of the discretion on that ground, the respondents face the obstacle that they ultimately abandoned the proposal and their interlocutory application for an order to that effect was dismissed. Finally, the Scott schedule was advanced after the time to accept the operative offer had passed.
The Scott schedule proposal was in some respect an extension of the attempt to obtain a breakdown of the operative offer. The rules do not impose an obligation on a party to break down an offer. It will often be helpful to do so in the context of negotiations, and a mediation in particular, and, perhaps, to encourage an opposing party to accept a formal offer. However, the provision of a breakdown of an offer is secondary or derivative information. It is not the discovery of primary evidential material on which a party can make its own assessment of a likely award. It is significant that the respondents’ solicitors did not request any information peculiarly within the knowledge of Georgia’s carers, or her litigation guardian so that they could better calculate her damages. The formal offer rules require the parties to focus on the evidentiary material known to them at the time, and the making of an objective assessment as to the quantum of their respective claims or liability.
A breakdown may alert the offeree to what is possibly an evaluative error made by the offeror, or of one under which the offeree was labouring. However, it is not an obligation imposed by the rules, including the overarching obligations, that one party alerts the other to its mistaken estimate of a particular issue, or sub-issue, or to expose its own mistakes in that respect. The parties may, of course, choose to do so, but the purpose of the pre-action and pre-trial discovery is to give the parties an understanding of the case against them and to disclose the evidentiary material relevant to that case. The formal offer rules provide a mechanism by which the parties are encouraged to put and consider potential compromises continuously throughout the litigation on the material available to them through those processes.
The complaint that there was a change of position can be put aside altogether. Counsel who provided the opinion to the Judge on the application to approve the January 2020 offer was not Georgia’s trial counsel. Counsel providing an opinion on the question of the approval of a compromise, whether counsel with the carriage of the litigation or independent counsel, is engaged by the party under disability but is not bound by the instructions given by that party or his or her next friend. Counsel provides the opinion on a proposed compromise independently, and makes a recommendation in the exercise of his or her own judgment. It is a misconception to suggest that the failure of counsel to recommend an approval of the compromise is a change in the position of the applicant, who had accepted the offer.
I am not persuaded that, considered individually or in combination, the respondents have advanced any proper grounds for me to exercise the overriding discretion to displace the default rule set by r 188F of the 2006 Rules, except in respect of the proposed challenge to the discount rate. Georgia’s litigation guardian, no doubt acting on legal advice, acted properly in preparing for such a challenge in the High Court. However, the settlement means that that challenge will not proceed. The costs expended on preparing for and meeting that challenge must be determined on the existing state of the law. It follows that the challenge would necessarily have failed. For that reason, I order that each party bear their own costs on that issue, but that on all other issues the respondents pay Georgia’s costs on an indemnity basis.
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