The parties had disputed a building contract. A Part 36 offer had been made by the builder defendant, but the judgment was for rather less, and the judge awarded the claimant her costs.
Held: The court exercised its discretion to set aside the order and make no order for costs: ‘The Part 36 mechanism provides a formal, regulated, procedure for a party, including a claimant, to express a willingness to accept something less than total success in his open position in the litigation. If the offer is not accepted and the offeror does better in the final result than his offer, he is entitled, unless the court considers it would be unjust, to costs on an indemnity basis from the expiry of the ‘relevant period’ (ie a basic three weeks, unless the offer extends it) plus interest at an enhanced rate up to 10% above base rate. Therefore there are advantages to a party in pitching his offer realistically, and there are potential disadvantages to an offeree in declining the offer. However, there is nothing about the procedure which states that an offeror is to be prejudiced as to costs because he has expressed his willingness to accept less than his open position. That would make the procedure a most dangerous one to use. The judge’s ruling that the incidence of costs should change at the expiry of the relevant period of three weeks confirms the illogicality of his decision. The three weeks is given to protect the offeree, who has that period to make up his mind: the judge used it, however, (to its limited extent) to protect the offeror’
Rix, Elias, Tomlinson LJJ
[2011] EWCA Civ 78
Bailii
England and Wales
Citing:
Cited – Aspin v Metric Group Ltd CA 24-Jul-2007
. .
Cited – Dunnett v Railtrack plc CA 22-Feb-2002
The claimant had appealed a judgment against her. The court itself recommended that the parties use a method of alternate dispute resolution, to avoid the need for appeal. The defendant refused, not wishing to make any payment over and above the . .
Cited – Halsey v Milton Keynes General NHS Trust etc CA 11-May-2004
The court considered the effect on costs orders of a refusal to take part in alternate dispute resolution procedures. The defendant Trust had refused to take the dispute to a mediation. In neither case had the court ordered or recommended ADR.
Cited – Reed Executive Plc, Reed Solutions Plc v Reed Business Information Ltd, Reed Elsevier (Uk) Ltd, Totaljobs.Com Ltd CA 14-Jul-2004
Walker v Wilshire still Good Law
After successfully appealing, the defendant claimant argued for a substantial part of its costs, saying that the defendant had unreasonably refused ADR. To pursue this, it now sought disclosure of the details of the without prejudice negotiations . .
Cited – Burchell v Bullard and others CA 8-Apr-2005
Each side had succeeded in part on their claims and counterclaims, but the Respondent was andpound;5,000 out of pocket. Each party had been ordered to pay the costs of the other.
Held: The appeal succeeded. The judge had correctly recognised . .
Lists of cited by and citing cases may be incomplete.
Costs
Updated: 02 November 2021; Ref: scu.428864