Winning Isn’t Always Enough: Why Mediation and Part 36 Offers Matter More Than You Think
In the recent case of H&P Advisory Ltd v Barrick Gold (Holdings) Ltd (Re Consequential Matters) [2025] EWHC 1330 (Ch), the Commercial Court delivered a sharp reminder: sometimes winning a case is only half the battle — the real sting comes in the costs.
This case beautifully highlights why smart litigants should consider not only litigation strategy but also the careful use of mediation and well-judged Part 36 offers. Let’s break it down.
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The Case in Brief
H&P Advisory brought a claim on a quantum meruit basis, seeking compensation for advisory services provided. They were awarded $2 million plus expenses — significantly less than they had claimed.
But here’s where it got interesting: the defendant, Barrick, had made a Part 36 offer early on — offering $2 million plus estimated interest.
At trial, after interest calculations, it turned out H&P did not beat the Part 36 offer — by a whisker. Despite their victory on paper, they faced the heavy cost consequences of CPR 36.17 because they failed to do better than the offer on the table.
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Why Part 36 Is a Power Tool
The judgment made it clear:
- A tiny shortfall, even a penny, matters.
- The court is bound to apply the normal Part 36 cost consequences unless it finds it would be unjust to do so — and the hurdle for proving injustice is high.
As the judge put it:
“Even if it could be shown that my findings on the issues concerning interest calculations were challengeable, I would not regard my recognition of the Part 36 offer as being unjust.”
The claimant, a sophisticated commercial entity, could not claim they were unfairly blindsided — they were expected to assess the risks and value of their claim, even without knowing the internal workings of Barrick’s assessments.
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Practice Points: Why This Matters for Litigants
✅ Make smart, well-pitched Part 36 offers.
A carefully crafted offer can shift the entire balance of costs, even if you end up paying some damages. Here, Barrick’s offer ultimately protected them on costs, saving potentially hundreds of thousands.
✅ Factor in interest when making and evaluating offers.
The claim value isn’t just principal; interest counts. Under Part 36, the offer must be better in money terms by any amount, however small. A narrow miss on interest calculations can swing the costs outcome dramatically.
✅ Don’t rely on “unjust” arguments.
The courts consistently set a high bar for disapplying Part 36 consequences. As the judgment reaffirmed, Part 36’s “salutary purpose” is to encourage sensible settlement — and undermine it only in exceptional circumstances.
✅ Mediation can break deadlocks.
The court noted that H&P could have explored alternative routes, such as mediation, to resolve issues without running to judgment. Mediation allows parties to test the water, explore options, and often resolve disputes on commercial — rather than strictly legal — terms.
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The Bigger Picture: Mediate Early, Offer Smart
This case is a textbook reminder:
✅ Litigation is not just about winning at trial; it’s about managing risk, cost, and outcomes.
✅ Mediation can create off-ramps before costs spiral.
✅ Strategic use of Part 36 offers can make the difference between a win that costs and a win that pays.
In commercial disputes, professional parties are expected to act commercially — meaning they should be alert to settlement opportunities and cost risks. Mediation and well-timed Part 36 offers are critical tools in that arsenal.