Kerry Underwood


with 2 comments

The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

Here I look at some Part 36 issues insofar as they relate specifically to small claims, portals and fixed costs.

Small Claims

Part 36 has no application in small claims track matters.

CPR 27.2(1) (g) reads:-

“(1) The following Parts of these Rules do not apply to small claims –

(g) Part 36 (offers to settle);

Unreasonable behaviour in the Small Claims Track

CPR 27.14(2) (g) allows the court to order “such further costs as the court may assess by the summary procedure and ordered to be paid by a party who has behaved unreasonably”.

CPR 27.14(3) provides that a party’s rejection of an offer in settlement will not of itself constitute unreasonable behaviour under paragraph (2) (g) but the court may take it into consideration when it is applying the unreasonableness test.

Thus Part 36 has no direct application to small claims track cases (CPR 27.2(1) (g)), but nevertheless the court may take into consideration the rejection, and presumably the non-acceptance, of any offer made in accordance with the terms of Part 36, or otherwise.

Part 36 itself requires a court to take into consideration any offer made in any way although strictly that provision does not apply in the small claims track, as it is contained within Part 36 itself, which has no application in the track. Effectively it does apply.

This is a crucial rule and is likely to become a major battleground between claimant lawyers and insurance companies.

In any given case it may make the difference between fixed costs of under £100.00 and full standard costs which, ironically, could well exceed those costs set out in the Fixed Recoverable Costs regime.

Thus the scenario is that the personal injury small claims limit is put up to £5,000.00 and the matter proceeds through the small claims track and the claimant is awarded, say £3,000.00 by the judge and the claimant successfully submits that the defendant has behaved unreasonably, maybe by not accepting an offer, or delay or whatever.

The court is then free to carry out a summary assessment of the claimant’s costs and award whatever it thinks fit.

Given that by definition there would have been unreasonable behaviour those costs are almost certain to be on the indemnity basis.

I stated above that the costs could be higher than under the Fixed Recoverable Costs Scheme and that is true.

However if the unreasonable behaviour is a failure to accept an offer then the effect is likely to be the same as now, that is an award of indemnity costs, which a claimant now gets in the Fixed Costs Scheme if it matches or beats its own Part 36 offer, if judgment is obtained, but not on late acceptance.

The key issue will be how the court exercises its discretion to take an offer into consideration when it is applying the unreasonableness test.


Section II of Part 36 deals with matters in the portals and the relevant rules are CPR 36.24 to CPR 36.30 and CPR 36.24(1) dis-applies section I of Part 36 in relation to the portals.

CPR 36.24(2) provides that this section only applies once the stage 3 procedure has been engaged and Part 8 proceedings issued.

Until stage 3 is engaged, section I of Part 36 applies as section I is only excluded by CPR 36.24(2) once stage 3 has been reached.

An offer is compulsory in stage 3 proceedings.

CPR 36 is a freestanding provision and a Part 36 offer can be made at any time in any case. CPR 36.7(1) reads:-

“(1) A Part 36 offer may be made at any time, including before the commencement of proceedings.”

I deal below with the concept of always making a Part 36 liability offer on day one.

Although a Part 36 offer can be made at any time in any non-small claims track matter it has no consequences if a matter is resolved by the end of stage 2 of the portal process.

Stage 3

Part 36 envisages three scenarios in relation to costs consequences following a stage 3 hearing:-

  • where the claimant fails to beat the defendant’s portal offer then the claimant must pay the defendant’s stage 3 costs as well as not recovering its own stage 3 costs; thus the claimant’s costs are Stage 1 and 2 minus Stage 3.
  • where the claimant beats the defendant’s offer but does not match its own offer then the defendant pays damages and stage 3 costs in the usual way;
  • where the claimant beats the defendant’s offer and matches or beats its own offer then the defendant pays:
  • the claimant’s stage 3 costs;
  • interest on those stage 3 costs at a rate not exceeding 10% above base rate;
  • 10% additional damages;
  • interest on all damages at a rate not exceeding 10% above base rate running from the first business day after the court proceedings pack (Part A and Part B) was sent to the defendant.

In each case the claimant’s damages are the damages awarded net of deductible state benefits.

Although Broadhurst v Tan & Taylor v Smith [2016] EWCA Civ 94 established that a claimant matching or beating its own Part 36 offer in a fixed costs case is entitled to indemnity costs, there is no such provision in relation to stage 3 of the portal.

Thus if a matter is concluded within stage 2 of the portal process there are no Part 36 consequences and if the matter is concluded within stage 3 of the portal process then there are limited Part 36 consequences as set out above.

Fixed Recoverable Costs and Part 36

Section 1 of Part 36 remains in force for non-portal cases and also applies to cases which exit either of the portals.

CPR 36.10A provides that where a claimant accepts a Part 36 offer within the relevant period the defendant will pay the claimant’s costs up to the stage reached when the offer is accepted.

This is clearly open to abuse.   A defendant makes an offer which the claimant intends to accept but during the 21 day acceptance period another stage is due to be passed.  The claimant delays acceptance thus triggering an additional fee as the next stage is passed.

Where a defendant’s Part 36 offer is accepted after the relevant period the claimant gets the appropriate fixed costs applicable at the date of expiry of the relevant period, and the claimant pays the defendant’s costs from expiry to acceptance.

Where a claimant accepts the defendant’s protocol offer after the claim has exited the portal the claimant gets Stage 1 and 2 costs but pays the defendant’s costs from expiry to acceptance.

The defendant’s fixed recoverable costs are dealt with by CPR 45.29F which states that if a Part 36 offer is accepted out of time then costs are determined under CPR 36.10A.

CPR 45.29F(2) states:-

If, in any case to which this Section applies, the court makes an order for costs in favour of the defendant—

  • the court will have regard to; and
  • the amount of costs order to be paid shall not exceed,

the amount which would have been payable by the defendant if an order for costs had been made in favour of the claimant at the same stage of the proceedings.

In addition CPR 36.10A (10)(b) states that where a court orders costs to be paid to the defendant those costs must not exceed the level of the relevant fixed recoverable costs.

Thus the defendant’s costs are capped, not fixed, at the level of fixed costs.

Exemptions to the new rule capping defendants’ costs

Where the new Qualified One Way Costs Shifting rule applies, but is then disapplied, for example where a claim is found to have been fundamentally dishonest, then the defendants’ costs are not capped.

CPR 45.29F(10) states that “where, in a case to which this Section applies, any of the exceptions to qualified one way costs shifting in rules 44.15 and 44.16 is established, the court will assess the defendant’s costs without reference to this rule”.

If Qualified One Way Costs Shifting never applied, eg because of the existence of a pre-1 April 2013 recoverable additional liability, then the rule capping costs still applies.

The other exceptions, and the interplay between CPR 36 and new CPR 45.29, are of extreme complexity and are among the worst drafted provisions that I have ever seen – and I have seen a few.

CPR 45.29F (9) reads:-

“Where, in a case to which this Section applies, upon judgment being entered, the claimant fails to obtain a judgment more advantageous than the claimant’s Part 36 offer, rule 36.21 will apply instead of this rule.”

CPR 45.29F (9) reads:-

“Where, in a case to which this Section applies, upon judgment being entered, the claimant fails to obtain a judgment more advantageous than the defendant’s Part 36 offer, rule 36.21 will apply instead of this rule.”

CPR 36.21 (3) reads:

  • Where the claimant fails to obtain a judgment more advantageous than the defendant’s Protocol offer—
  • the claimant will be entitled to the applicable Stage 1 and Stage 2 fixed costs in Table 6 or Table 6A in Section III of Part 45; and
  • the claimant will be liable for the defendant’s costs from the date on which the Protocol offer is deemed to be made to the date of judgment; and
  • in this rule, the amount of the judgment is less than the Protocol offer where the judgment is less than the offer once deductible amounts identified in the judgment are deducted.

(‘Deductible amount’ is defined in rule 36.22(1)(d).)


CPR 36.21 deals with the position on judgment, rather than acceptance of an offer, but the principles are exactly the same, save that the claimant who matches his or her own offer at trial gets indemnity costs, not fixed recoverable costs, from the date of expiry of the period for accepting the offer.

Defendants’ costs are capped, not fixed, by reference to the level of the claimants’ fixed recoverable costs.

Does A Claimant Get Indemnity Costs on Late Acceptance?


In Hislop v Perde [2018] EWCA Civ 1726

the Court of Appeal held that in fixed costs cases a late accepting defendant has to pay only fixed costs, unless there are exceptional circumstances, and that of itself late acceptance is not an exceptional circumstance within CPR 45.29J.

A long delay without explanation may be a special circumstance, but a short delay with a reasonable explanation will not.

A claimant at trial, or on judgment being entered, who matches or beats her or his own Part 36 offer, still receives indemnity costs in accordance with the decision in

Broadhurst v Tan [2016] EWCA Civ 94

specifically endorsed here by the Court of Appeal, although unfortunately the Court of Appeal refers on several occasions to a claimant having to beat its offer at trial.

This is wrong on two points; firstly the claimant only has to match, not beat, its own offer, and secondly it is any judgment, and not just judgment after trial, which triggers the entitlement to indemnity costs.

Given that virtually all fixed costs cases settle before trial, this very limited exception is for all intents and purposes meaningless.

The Court of Appeal accepted that there was no authority as to when CPR 45.29J exceptional circumstances come into play, and here it chose to give no guidance, except the very limited, non-specific guidance set out above.

The issue of what happens on late acceptance of a Part 36 offer in non-fixed costs cases was not addressed.


A poor and chaotic decision which shows that this division of the Court of Appeal simply does not understand the funding mechanisms of civil litigation and fixed costs.

Paragraph 53 says it all:

“53. This is important. These rules demonstrate that, in the mirror image of the situation in which these claimants find themselves (namely, where a claimant has accepted a defendant’s offer late) there is no question of either indemnity or standard basis costs being awarded to the defendant. The defendant’s recovery for the period of delay is limited to fixed costs only. There could be no reason to treat the claimant in a radically different way and to go outside the fixed costs regime, and order standard or even indemnity costs, in circumstances where a defendant in a similar position to these claimants is not permitted to recover costs on that basis. In this way, my interpretation of the rules applies the same fixed costs regime to any party whose offer has not been accepted when it should have been.” 

This shows a complete failure to understand Part 36 consequences. In no way is this a mirror image; a claimant who fails to beat a defendant’s Part 36 offer, or accepts late, pays the defendant’s costs and is deprived of its own costs, even though it has won.

Thus that is a double penalty. In contrast a defendant now suffers no penalty whatsoever on late acceptance.

The decision makes no sense at all. If the policy issue set out by the Court of Appeal are correct – and they are not – then why does a claimant at trial or on judgment get indemnity costs if it matches or beats its own Part 36 offer?

How can the happenstance of judgment or trial reverse entirely the policy objectives of certainty etc. trotted out by the Court of Appeal?

The Court of Appeal also falls into the trap of equating indemnity Part 36 costs with indemnity costs caused by misconduct or bad behaviour and here at paragraphs 35 and 36 the Court of Appeal recites the bad behaviour indemnity costs cases, which of course have nothing whatsoever to do with Part 36.

This totally misses the point. Why should a Part 36 penalty on a defendant require bad behaviour?

If so, then why, in the absence of bad behaviour, does a Part 36 late-accepting claimant have to pay the defendant’s costs and be deprived of its own costs, even though it has won the case?

This is all the more the case – a fortiori -in words the Court of Appeal might understand – as in personal injury cases, Qualified One-Way Costs Shifting applies, so failure to beat Part 36 imposes a costs penalty on a claimant, whereas normally a personal injury claimant is now not liable for costs, even in the event of complete defeat.

In the past that costs liability would have been covered by an After-the-Event insurance policy, with a premium recoverable from the defendant in the event of success.

The quid pro quo of the Jackson Reforms was QOCS protection in return for the abolition of recoverability of After-the-Event insurance premiums.

As I have pointed out previously the Part 36 regime drives a coach and horses through QOCS.

This decision reinforces that point, and more so.

There is now no point in a claimant in a fixed costs case making a Part 36 offer on quantum.

On liability – yes – as if that issue is got out of the way, then there is less work to do and fixed costs are the same whether or not liability is in dispute.

A claimant in a fixed costs case is now best advised to just proceed as far as possible, so as to get through to the latest fixed costs stage possible.

For all intents and purposes, in fixed costs cases, Part 36 is now an issue for defendants, and because of the costs consequences on a claimant who fails to beat a defendant’s Part 36 offer, it is at that stage that a claimant must engage with Part 36.

Having said that, there is now little incentive on a defendant to admit liability; they can, at no penalty, force the fixed costs claimant to do extra work, for no extra costs, which of course leads to pressure to under settle.

This is an insurance company decision.

As far as the Court of Appeal is concerned, some litigants are more equal than others.

Part 36 Liability Offers on Day One

Part 36 is a freestanding provision and a Part 36 offer can be made at any time in any case, provided that it is not a small claim, as Part 36 has no application in the small claims track – see CPR 27.2(1) (g).

Section II of Part 36 specifically deals with matters in the portals and the relevant rules are CPR 36.24 to CPR 36.30.

However CPR 36.24(2) provides that that section only applies once the stage 3 procedure in the portal has been engaged and Part 8 proceedings issued. That Section makes a Part 36 offer compulsory in stage 3.

Until stage 3 is engaged section I of Part 36 applies as section I is only excluded by section II once stage 3 is reached.

Clearly if liability is in issue then stage 3 will not be reached as the matter drops out of the portal.

Consequently a Part 36 offer on liability can be made in every case at the outset and there is no need to wait until the matter reaches stage 3, when a Part 36 offer on quantum is compulsory and nor is there any need to wait until the matter drops out of the portal.

CPR 36.7:-

“(1) A Part 36 offer may be made at any time, including before the commencement of proceedings.”

The court must apply the costs consequences of Part 36 unless it would be unjust to do so and, in considering whether it would be unjust, the court must take into account all of the circumstances of the case, including whether the offer was a genuine attempt to settle the proceedings (CPR 36.17(5) (e)).

That is the reason why I suggest making a 95%/5% offer on liability as some courts have held that by making a 100%/0% offer there is no genuine attempt to settle the proceedings as no concession is being offered.

Obviously the client’s permission to make such an offer must be obtained as if it is accepted then damages will be 5% less than the full value of the claim. However in a personal injury matter, or indeed in any type of claim where there are general damages, these are not capable of precise quantification in any event and few lawyers would advise a client in any circumstances to reject a defendant’s offer that amounted to 95% of the full value of the claim.

If a claimant making such an offer matches or beats that offer then the client gets a 10% uplift on damages and thus those damages rise to 110%.

In a personal injury matter involving insurance it is important to check that there will be no effect on the client’s no claims bonus by the 5% concession.

Such an agreement does not cause the matter to drop out of the portal. That only occurs when the defendant alleges contributory negligence. An agreement to accept 95% of what damages are awarded is not a concession of contributory negligence; it is a sensible commercial arrangement and the whole purpose of the portal process, and Part 36, is to limit the matters that remain in issue.

A claimant successful at trial on a 100% basis clearly beats the Part 36 offer and gets indemnity costs and a 10% uplift on all damages and the position is the same if judgment is entered.

What has not yet been determined is whether a claimant in such a position gets indemnity costs on late acceptance by a defendant of a claimant’s Part 36 offer.

It is clear the courts have a discretion to order indemnity costs and indeed has that general discretion whether or not a Part 36 offer has been made.

Underwoods Method – The Retainer

At paragraph 32 of the judgment in Broadhurst the Master of the Rolls recognises, with neither approval nor criticism, the existence of the Underwoods Method, that is of a solicitor and own client hourly rate with the overall charge to the client capped at a percentage of damages. This is a crucial section and is a wholesale rejection of the obiter comments made by District Judge Lumb in A & M (by their litigation friend) v Royal Mail Group (2) [2015] MISC B30 (CC).

The relevant part of the Court of Appeal Judgment appears at paragraph 32 and reads:-

“He says that the way in which lawyers are typically engaged in this part of the market is heavily reliant on CFAs and legal expenses insurance. Both forms of funding typically provide for lawyers to charge on a conventional hourly basis, but may cap their right to enforce payment with reference to the amount recovered. He adds that it is still very common for costs beyond fixed costs to be deducted from claimants’ damages. There is no evidence before us to support this statement either, although I have no reason to doubt it.”

Clearly lawyers who stand to get costs on the indemnity basis will wish to have an appropriate hourly rate in the client care retainer, but equally clearly the client will want to be assured that they will not lose all or most of their damages by way of the unrecovered solicitor and own client costs, given the relatively low level of fixed costs.

The comments of the Master of the Rolls are eminently sensible and helpful and should go a long way to removing the fears of civil litigators concerning fixed costs.

This decision of the Court of Appeal is of great importance and will become much more significant now that it is proposed to introduce fixed costs in all civil work of all kinds where the damages are valued at £100,000.00 or less.

Indemnity costs are not subject to proportionality.

However they are subject to the indemnity rule and thus careful drafting of the retainer is necessary.

A retainer that provides for the solicitor to charge the client fixed costs as per the matrix will result in the solicitor getting no extra costs at all as the costs on the indemnity basis, that is the basis of the solicitor and client retainer, will be identical in amount to fixed costs as that is the wording of the retainer.

Part 36: Case Update

In Bentley Design Consultants Ltd v Sansom [2018] EWHC 2238 (TCC) (29 August 2018)

the Technology and Construction Court, part of the Queen’s Bench Division of the High Court, held that a Part 36 offer made by a claimant could not be held to cover matters that the claimant added to the action after the Part 36 offer was made.

This was a professional negligence action in relation to a survey carried out on two properties, but when proceedings were issued they only related to one plot.

On 23 April 2015 the claimant made what was accepted to be a valid Part 36 offer in relation to that claim and it referred to the claim number, and it was common ground that at that stage it was an offer to settle the claim in respect of the first plot only as the only claim that had been made was in relation to that plot.

The offer was not accepted and later the Particulars of Claim were amended to plead a case in relation to Plot 2, which then formed part of the same claim, with the same claim number.

In November 2016 the defendant then purported to accept the Part 36 offer that had been made in April 2015 and the dispute was whether that acceptance covered both plots, or only the first plot, which was the only dispute in existence when the Part 36 offer was made.

The Circuit Judge held that the acceptance only covered the first plot, and here, on appeal, the High Court upheld that decision.


This decision is wrong. If a Part 36 offer is made in relation to the whole of a claim, and is not withdrawn, and is then accepted, the whole of the claim at that stage must be compromised.

Otherwise, for example, where a defendant decided to accept the offer because it looked as though the claimant’s damages might be higher – perhaps because of a longer than expected period of recovery in the personal injury case – then this logic would mean that the acceptance only covered the claim as formulated at the time of the offer.

Here, the claimant’s remedy was simple – it could have withdrawn the Part 36 offer once it added another claim by amending the Particulars of Claim.

On the logic of this decision, any amendment to any pleading at any stage means that any pre-amendment Part 36 offer can only be for part of the case.

In Sir Cliff Richard v BBC and Chief Constable of South Yorkshire Police [2018] EWHC 2504 (Ch) (March 2018)

the Chancery Division of the High Court held that a Part 36 offer can be communicated to the trial judge where the Part 36 offer has been accepted, even if the case has not concluded.

CPR 36.16 provides that the existence and terms of a Part 36 offer must not be communicated to the trial judge until the case has been decided.

In a claim brought by Sir Cliff Richard against the BBC and the South Yorkshire Police, the two defendants had served contribution notices on each other under the Civil Liability (Contribution) Act 1978.

South Yorkshire Police subsequently made a Part 36 offer and settled with Sir Cliff.

The terms of that settlement were disclosed to the BBC.

At the pre-trial review, the BBC maintained that the terms of the settlement, particularly the settlement sum, would be material at trial.

South Yorkshire Police gave several reasons why the information should be withheld from the judge at trial, including the restrictions in CPR 36.16.

Noting that CPR 36.16 exists so that parties can make offers to each other without the risk that those offers will be held against them in the proceedings, the court found that, once there is a binding settlement agreement, those considerations fall away.

There is no longer a Part 36 offer but a binding agreement, and CPR 36.16 does not apply to that situation.

Although South Yorkshire Police was still a party to the contribution proceedings, the Part 36 offer had not been made in those proceedings but rather to settle Sir Cliff’s claim against South Yorkshire Police.

The court therefore rejected the argument that CPR 36.16 provided a basis for not referring to the settlement terms at trial.

The court nevertheless had a discretion to refuse disclosure, depending on the relevance of the information and the prejudice caused by its disclosure.

In that regard the prejudice would have to be very heavy to outweigh a case of relevance, especially a strong one.

Ultimately these matters would have to be dealt with at trial, once South Yorkshire Police had clarified in an amended contribution notice, how it could pursue its contribution claim against the BBC without reference to the settlement sum.

In Devoy-Williams v Hugh Cartwright and Amin [2018] EWHC 2815 (Ch) 5 October 2018

the Chancery Division of the High Court held that once a claim had been struck out the claimant could not accept a Part 36 offer made by the defendant.

The High Court also said that the existence and potential acceptance of a Part 36 offer should not be a factor influencing the decision as to whether the court should grant relief from sanctions:

“I agree with the judge that the Part 36 offer could not be some form of a trump card. As the judge said at paragraph [74], the claim was struck out and it was not for the judge to grant relief so that the Part 36 offer could be accepted, thereby thwarting the purpose and effect of an Unless Order that had been breached.”

This was a professional negligence action against solicitors and an Unless Order was made against the claimants requiring disclosure by 21 October 2016 and in default of that disclosure the claim would be struck out.

The defendant made a Part 36 offer on 10 October 2016 and the claimants sought to accept it on 1 November 2016, that is 11 days after the deadline for failure to comply with the Unless Order.

The court held that the action was no longer extant and therefore it was not possible for the Part 36 offer to be accepted.

This follows the decision in

 Joyce v West Bus Coach Services Limited [2012] EWHC 404

No Power to Order Payment on Account After Part 36 Offer has been accepted

In Finnegan v Frank Spiers (t/a Frank Spiers Licensed Conveyancers) [2018] EWHC 3064 (Ch) (27 June 2018)

the Chancery Division of the High Court held that the court has no power to order a payment on account of costs where a party has accepted a Part 36 offer.

The claimant accepted the defendant’s Part 36 offer and issued an application for an interim payment on account of costs.

The District Judge held that there was no power to make such an order and the Chancery Division upheld that decision.

By CPR 44.9(1) acceptance of a Part 36 offer deems that a standard basis costs order has been made.

CPR 44.2(8) provides that where the court has ordered a party to pay costs, it may order an amount to be paid on account before the costs are assessed.

Here the court held “that the place to find the court’s ability to make a payment on account order after acceptance of a Part 36 offer is in Part 36 itself. It is absent from there. There is no reason in my judgment, to read rule 44.2(8) to make a payment on account applicable when a Part 36 offer is accepted”. (Paragraph 30)

The court distinguished the case of

Barnsley v Noble [2012] EWHC 3822

where the court held that it had power to order a payment on account following discontinuance.

This was because the rule on discontinuance preserved the court’s discretion as CPR 38.6 provides that a claimant who discontinues is liable for costs “unless the court orders otherwise”.

There is no such discretion in Part 36.

CPR 44.9(1) reads:

“(1) Subject to paragraph (2), where a right to costs arises under –

(a) rule 3.7 or 3.7A1 (defendant’s right to costs where claim is struck out for non-payment of fees);

(a1) rule 3.7B (sanctions for dishonouring cheque);

(b) rule 36.13(1) or (2) (claimant’s entitlement to costs where a Part 36 offer is accepted); or

(c) rule 38.6 (defendant’s right to costs where claimant discontinues),

a costs order will be deemed to have been made on the standard basis.”

Withdrawn Part 36 Offer Leads to No Order for Costs

In Britned Development Ltd v ABB AB & Anor [2018] EWHC 3142 (Ch) (14 November 2018)

the Chancery Division of the High Court made no order for costs in a matter where the claimant had been awarded damages but was unsuccessful in much of its claim, which would of itself have led to a 40% reduction in costs.

However, the defendant had made a Part 36 offer which the claimant failed to beat, but the offer had been withdrawn prior to judgment and so the usual automatic Part 36 consequences did not apply, that is the defendant did not get its costs from the date of expiry of the offer.

However, such an offer is a factor to be taken into account in the assessment of costs under CPR 44.

In no circumstances the court found that it would be unjust for the defendant to pay any of the claimant’s costs and so it made no order for costs.

Written by kerryunderwood

January 9, 2019 at 10:10 am

Posted in Uncategorized

2 Responses

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  1. So basically Part 36 is now defunct, Defendant’s will now get away with not accepting offers in time because there is no indemnity costs consequences. I deal with costs and since the turn around of Broadhurst v Tan, the Courts have refused to even grant indemnity costs or even the cap of £1500.00 for beating your own offer. A case I had recently, despite beating my own Part 36 offer by some distance, we were only awarded £300.00 for assessment costs. Then despite making a challenge to that award confirming we had beaten our own offer and that the same was made pre-service of the N252, the Court still waved our our appeal for an award more than £300.00. They did not even bear in mind that we had prepared P8, POR, filed an N258 application and dealt with correspondence in between. This was seriously unjust but the Court ignored our plea.

    Now with the latest judgement of McCloud v Warrington & Halton Hospitals, you can bet your bottom dollar on every Defendant leaping on the bandwagon and stating that we also cannot recover a 10% uplift, despite this piece of case law being case specific.

    Seen the same nonsense with Default Costs Certificates and there is literally no point in A) Making a Part 36 offer because you will not get the benefit of indemnity costs or a 10% uplift & B) There is little point in obtaining a DCC because Defendants can freely not deal with your case and have the same set aside quite easily.

    Two rules that should provide Claimant’s with incentives that are never upheld when challenged by Defendant’s. I am of course speaking from a costs perspective rather than a substantive perspective, but the principles are relatively the same.

    Richard Ferguson

    January 9, 2019 at 12:06 pm

    • Richard

      I largely agree with all of this.

      Please see my blog Part 36 and Fixed Costs: Claimants’ Offers Pointless Rules Court of Appeal –

      where I make much the same points.

      I also agree with your comment about the case of

      JLE v Warrington and Halton Hospitals NHS Foundation Trust [2018] EWHC B18 (Cost)

      which, in my view, is plain wrong, and which I am currently writing up.

      Unfortunately, many judges just don’t get Part 36 at all.



      January 9, 2019 at 2:03 pm

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