In the case of Broadhurst & Anor v Tan & Anor [2016] EWCA Civ 94 the Court has held that “If a defendant refuses a claimant’s offer to settle and the court subsequently awards the claimant damages which are greater than or equal to the sum they were prepared to accept in the settlement, the claimant will not be limited to receiving his fixed costs, but will be entitled to costs assessed on the indemnity basis in accordance with rule 36.14.”
It was held that “Where a claimant makes a successful part 36 offer in a section IIIA case, he will be awarded fixed costs to the last staging point provided by rule 45.29C and Table 6B. He will then be awarded costs to be assessed on the indemnity basis in addition from the date that the offer became effective. This does not require any apportionment.”
The decision was based upon the principle that costs assessed on the indemnity basis and fixed costs were ‘conceptually different’ and that parliament had not intended to create a scheme to penalise claimants when it had established a fixed costs regime.
This means that the Court can override the fixed costs regime in personal injury cases to award more costs where a part 36 offer has been made. Interesting in the context of the Courts considering fixed costs in all cases up to £250,000. The courts are actively encouraging early settlement whether by making offers or through mediation and it is always sensible to make early and well-judged Part 36 offers to obtain costs protection.