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High Court considers additional amount where Claimant has beaten Part 36 offer

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The additional award under CPR 36.14 faced its first challenge in the High Court; in Feltham –v- Bouskell [2013] EWHC 3086 (Ch) the court found favour with the Defendant’s arguments that in view of the Claimant’s conduct it would be unjust to allow the additional amount, which in this case would have been £75,000.00.

To re-cap, following the implementation of The Jackson Reforms on 1 April 2013 a new Part 36 penalty was introduced.  CPR 36.14 states that if a Defendant does not accept a Claimant’s offer to settle and the Claimant goes on to obtain a judgment that is equal to or more advantageous than it’s offer, the court will order the Defendant to pay an additional amount as a percentage of the damages up to a maximum of £75,000.00, unless it is unjust to do so.

This was a professional negligence case which was listed for trial on 4 June 2013.  On 10 May 2013 the Claimant made a Part 36 offer in the sum of £700,000.00; the 21 day period for acceptance expired immediately before the commencement of the trial.  The Defendant did not accept the offer and the matter proceeded to trial and the Claimant beat its own offer and accordingly sought the court to award the additional amount of £75,000.00.  The Defendant objected to the award and requested the court to take into account all the circumstances of the case to consider if the allowing of an additional award would be unjust in the circumstances.  CPR 36.14 (4) states that the court will take into account all the circumstances of the case including::

  1. the terms of any Part 36 offer;

  2. the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;

  3. the information available to the parties at the time when the Part 36 offer was made; and

  4. the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated.

The Defendant argued that it was unjust to make such an order because the Part 36 offer had been made at the very last minute; the Claimant only just beat the offer; nursing notes sought by the Defendant in November 2012 were not disclosed until a day before the trial and that the Claimant had not pleaded a key allegation which arose in the opening at trial.  The judge agreed with the Defendant, save for the fact that the Claimant only just beat the offer was not a relevant consideration, and therefore decided that in accordance with CPR 36.14 (4) it would be unjust to award the additional amount.

The Defendant also sought for the Claimant to be deprived of some of its costs on the basis of not fully pleading the case until trial and failure to provide the nursing notes amongst other matters.  The judge stated that had he not decided it was unjust to make an order for the additional amount then he would have made a deduction from the Claimant's costs to take account of these matters as it would be unjust to penalise the Claimant twice.

The case is further evidence that the courts will be taking the parties’ conduct into serious consideration when making costs awards.

By Fiona Carroll