Summary of Recent Cases – Costs

Low value RTA claim settled under the terms of a Part 36 offer, the costs were to be assessed under CPR 45 Part II rather than on the standard basis
Sandra Solomon v Cromwell Group Plc: Donna Oliver v Sandra Doughty [2011] EWCA Civ 1584, 19/12/11

The appellants, who had been claimants in low-value road traffic accident claims, appealed against decisions to award costs in accordance with Part 45 Part II rather than on the standard basis. In both cases, the Claimants had accepted Part 36 offers of sums totalling less than £10,000 made by the Defendants before the claims had been issued. The Court held that it could not have been intended that a Claimant in a low-value road accident claim who accepted a Part 36 offer before proceedings had been commenced should be entitled to recover costs assessed on the standard basis, whereas a Claimant accepting an offer not made under Part 36 should be limited to the costs under Part 45 Part II. Furthermore it was not clear why a claimant proceeding under r.44.12A should be subject to a more restrictive costs regime than one who started Part 7 proceedings. If the Claimants’ argument were correct, the acceptance of a Part 36 offer would always result in an order for costs on the standard basis in low-value road traffic accident cases which would undermine the fixed costs regime and provide a powerful incentive for defendants not to make Part 36 offers in such cases. The appeals were therefore dismissed.

A judge’s award of costs based on a Claimant’s Part 36 offer was illegitimate as the offer had been withdrawn the Court could rely on the consequences of a previous unwithdrawn Part 36 offer
Epsom College v Pierse Contracting Southern Ltd (In Liquidation) (Formerly Biseley Construction Ltd) [2011] EWCA Civ 1449, 13/12/11
It was agreed between the parties that the judge’s award of costs based on the second Part 36 offer was technically illegitimate as that offer had been withdrawn. The question was whether the award could or properly should be translated into Part 36 costs consequences under the surviving first offer or under Part 44. It was held that the first Part 36 offer was valid and reliance on that offer could be substituted for the second offer. The essence of the judge’s disposal of the question of costs would be upheld. As the second Part 36 offer’s withdrawal meant that it could not be made the basis of Part 36 costs consequences, reliance on the first, unwithdrawn, Part 36 offer would be substituted.

January 27, 2012 · Editorial Team · Comments Closed
Posted in: Cases