The High Court has awarded a claimant indemnity costs where the defendant conceded liability shortly before a split trial, having previously refused the claimant’s Part 36 offer to accept liability for 95% of damages to be assessed: Jockey Club Racecourse Limited v Willmott Dixon Construction Limited [2016] EWHC 167 (TCC).
When the new version of CPR Part 36 was introduced from April 2015 one of the changes made was to address a perceived difficulty with the previous rules, in that a claimant could obtain the benefits of Part 36 by making an offer which involved only a small discount on the full claim.
The new rules addressed this issue by adding a further factor the court must take into account in deciding whether it would be unjust to order the Part 36 costs consequences, namely “whether the offer was a genuine attempt to settle the proceedings”. The idea was that a very high claimant offer was unlikely to be a genuine attempt to settle the claim, and so the new factor should mean the court would decline to give effect to a claimant’s offer which contained little in the way of concession.
This new decision suggests, however, that even with this new factor the courts may be prepared to give effect to claimant offers to accept a very large proportion of the claim value, though of course each case will turn on its facts. In the present case, the judge commented that although the discount was “very modest”, it could not be described as “derisory”.
The lesson to take from this is that just by offering to accept 95% of your claim in a part 36 offer, you can put the defendant at risk of having to pay indemnity costs.