A recent case has highlighted the risks a claimant faces if they don’t accept a part 36 offer, even if they Don’t have all the information they need at the time. If that is the situation, they should apply for a stay, if they can, to stop costs continuing to rise.
The judgment in Campbell -v- Ministry of Defence  EWHC 2121 (QB) highlights the difficulties for a claimant who accepts a Part 36 offer late. The claimant had to bear the usual costs consequences and pay the defendant’s costs for a 13 month period.
“… in personal injury claims as in other litigation, offers to settle are often made at an early stage when the evidence is incomplete (either on liability or quantum or both). In these circumstances, it is the job of the claimant’s advisors to weigh up the merits of the Part 36 offer and give the claimant appropriate advice”
The claimant brought an action for damages for personal injury. Liability was admitted. In January 2018 the defendant made a Part 36 offer of £100,000. That offer was accepted by the claimant on the 22nd March 2019, 13 months after the time limit for acceptance had expired.
The claimant applied for an order that he be awarded his costs up to the 19th February 2018, with no order for costs thereafter, on the basis that the application of the usual rule would be unjust.
The judge reviewed the rules and the relevant principles. The review of the case law is a reminder of the difficulties involved for a claimant seeking to obtain a “different” order.
4 The legal framework is not controversial. The starting point is CPR 36.13 (4) which at (b) provides that where, as in this case, a Part 36 offer which relates to the whole of the claim is accepted after expiry of the relevant period, the liability for costs must be determined by the court unless the parties have agreed costs. CPR 36.13(5) provides that, in the event the parties are unable to agree the costs liability then the court must, unless it considers it unjust to do so, order that the offeree (in this case, the Claimant) be awarded the costs up until the date on which the relevant period expired but that thereafter the offeree should bear the offeror’s costs from the date of expiry of the relevant period to the date of acceptance.
5 In considering whether the normal rule would produce an unjust outcome, the court is required to take into account all of the circumstances of the case (CPR 36.13(6)) including the matters identified in CPR 36. 17(5). Those are:
(a) the terms of the Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including, in particular, how long before trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made;
(d) the conduct of the parties in the provision of information for the purposes of enabling the offer to be made or evaluated; and
(e) whether the offer was a genuine attempt to settle the proceedings.
6 The court must therefore approach the question of the appropriate costs order by considering (by reference to the factors above) whether it would be unjust to apply the presumption in 36.13(5) and, only if the court does so conclude, then go on to determine the appropriate alternative order by reference to CPR 44.3. The court must guard against making an exception from the norm on the grounds that the regime itself is harsh or unjust but must find something about the particular circumstances of the case which takes it out of the norm(see Downing v Peterborough & Stamford Hospitals NHS Foundation Trust  EWHC 4216 at ) and keep in mind the salutary purpose of the Part 36 regime which is to promote compromise and avoid unnecessary expenditure of costs and court time (see Smith v Trafford Housing Trust  EWHC 3320 (Ch) at ). Finally, the burden is on the offeree to show injustice: uncertainties in the litigation and the usual contingencies of litigation do not render it unjust for the normal costs order to operate (see Briggs v CEF Holdings Ltd  Costs 123). Subject to this guidance, the court exercises a broad discretion as to the appropriate costs order.
The claimant argued that the normal principles as to costs were displaced because of the particular facts of the case.