Kerry Underwood

PART 36: CLAIMANT ORDERED TO PAY INDEMNITY COSTS ON LATE ACCEPTANCE

with 4 comments


This subject is dealt with in great detail in my book – Personal Injury Small Claims, Portals and Fixed Costs, running to three volumes and 1,300 pages and costing £80.00 and available from me here or Amazon here. 

In Jordan v MGN Ltd [2017] EWHC 1937 (Ch)

the Chancery Division of the High Court ordered a late accepting Claimant to pay costs on the indemnity basis for the period from expiry of time for accepting the Part 36 offer until acceptance, although due to an undertaking given by the defendant earlier, the actual period covered by indemnity costs was shorter.

Here the Claimant accepted a Part 36 offer of £15,000.00 that had been made three years earlier and the Defendant had made later, higher, offers including an offer at a settlement meeting of £100,000.00.

The Claimant accepted the old offer of £15,000.00 shortly before trial, having rejected a much higher non Part 36 offer, which he then sought to accept, unsuccessfully.

Here the court held that the Claimant’s conduct was such as to warrant an order of indemnity costs as the Claimant had failed to make any sensible offer until shortly before the trial, after considerable costs have been incurred.

The judge said:

“The bottom line is that Mr Jordan did not advance any explanation, let alone a good one, why, having run his case for 2½ years, having failed to respond properly to a number of offers, one of which was close to his own proposed financial settlement, having caused himself and the other side to run up significant amounts of costs, and having exposed the defendant to the prospect of having to pay the CFA uplift and ATE premiums (which I am satisfied is a powerful threat to a defendant), should at the last minute do the equivalent of walking away from the action. I consider that all those factors, and the other matters referred to in this section, are good reasons for ruling that the costs be paid on the indemnity basis, and I so order.”

The facts of the offers in this case are very complicated indeed and the decision should not be taken as establishing a principle that generally a Claimant is liable for indemnity costs on late acceptance of a Part 36 offer.

Nevertheless, it is a warning to Claimants that failure to engage in proper negotiations, and failure to make offers and respond to offers, does put them at risk of an Indemnity Costs Order on late acceptance of a Part 36 offer.

The judge appears to have been influenced by the fact that the Claimant had a Conditional Fee Agreement, and therefore was not running up further costs himself by letting the matter drag on.

“One would have thought that a client who was willing to consider settlement would have started to engage more at that point. I find it hard to believe that a normal paying client, who was not litigating under a CFA and with the protection of ATE insurance, would have adopted the tactic of not responding and not engaging further.” (Paragraph 64)

Comment

As the debate rages on as to whether a Claimant is entitled to indemnity costs on late acceptance by a Defendant, here is another case where a successful Claimant has been ordered to pay indemnity costs to a Defendant following late acceptance by the Claimant of the Defendant’s Part 36 offer.

This makes no sense at all. The penalty on a late accepting Claimant is that they are deprived of costs from the expiry of the date for accepting the Part 36 offer AND have to pay the losing Defendant’s costs from that date.

Thus it is a double penalty.

If a late accepting Defendant does not have to pay indemnity costs, then there is no penalty whatsoever upon that Defendant.

 

Also see:

PART 36: DOES A CLAIMANT GET INDEMNITY COSTS ON LATE ACCEPTANCE?

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Written by kerryunderwood

August 4, 2017 at 7:39 am

Posted in Uncategorized

4 Responses

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  1. You’d be interested in mckeown v venton. High court judge said D not liable for indemnity costs due to late acceptance

    David

    August 4, 2017 at 1:47 pm

    • David

      I have it. It is NOT a decision of a High Court Judge; it is a decision of a Circuit Judge sitting in Liverpool County Court and is of no greater, or lesser, authority than any other non-binding County Court decision.

      Kerry

      kerryunderwood

      August 4, 2017 at 1:53 pm

      • Why not mention it on your blog like other non binding decisions?

        David

        August 4, 2017 at 9:13 pm

  2. I will in due course, but it carries matters in further. There are a large number of such decisions. I have been concentrating on the proposed new Part 36.

    Kerry

    kerryunderwood

    August 5, 2017 at 9:33 am


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