Synopsis
Despite the claim having been settled through the acceptance of a Part 36 offer, the Court found that it retained jurisdiction to determine issues relating to costs, even after the automatic stay arising under CPR 36.14. As a result, an outstanding application was heard after the acceptance of the Part 36 offer, leading to the claim being reassigned from complexity band 2 to complexity band 1.
Background
This case concerned a personal injury claim. The Defendant argued that the matter could be dealt with at a hearing lasting less than one day, that liability was not in dispute, and that only quantum remained to be determined.
Although the judge considered that the claim would, on the facts, fall within complexity band 1, the matter was nevertheless allocated to the intermediate track and assigned to complexity band 2 on 28 October 2025.
On 31 October 2025, the Defendant issued an application challenging the assignment of the claim to complexity band 2 and seeking reassignment to complexity band 1. However, before the application was listed for hearing, the Defendant made a Part 36 offer which was accepted by the Claimant, thereby concluding the claim.
The acceptance of the offer resulted in an automatic stay pursuant to CPR 36.14, although the Defendant’s application for reassignment remained outstanding.
Points Raised
The Claimant resisted the application on the basis that the automatic stay under CPR 36.14 deprived the Court of jurisdiction to deal with the claim further.
The Claimant also argued that the Part 36 offer had been calculated on the basis of fixed costs applicable to complexity band 2. As the Defendant had not expressly stated that the offer was subject to the outstanding reassignment application, the Claimant contended that the Defendant should not be permitted to rely upon the application to reduce the level of fixed costs payable.
In response, the Defendant relied upon CPR 36.14(5), which provides that the stay of proceedings does not affect the Court’s power to determine issues relating to costs.
The Court’s Findings
In considering the parties’ submissions, the Court held that a stayed claim remains within the Court’s jurisdiction. Although proceedings are stayed, they continue to exist, and the Court retains jurisdiction over them. Accordingly, the Claimant’s first argument failed.
In relation to the second argument, the Court found that CPR 36.14(5)(b) expressly preserves the Court’s jurisdiction to deal with questions of costs arising from the proceedings. The Court therefore set aside the part of the earlier order assigning the matter to complexity band 2 and reassigned the claim to complexity band 1.
In doing so, the Court considered its discretion in relation to complexity band allocation. While there is discretion to assign a claim to a higher band where appropriate, the Court was satisfied that band 1 was the correct allocation on the facts of the case.
The Court also noted that the Defendant’s application had been made within seven days of the original order and was therefore properly before the Court.
As a consequence, the Defendant became liable only for the fixed costs applicable to complexity band 1, rather than those applicable to complexity band 2, thereby reducing the costs payable to the Claimant upon settlement.
Analysis
This decision demonstrates that live applications with costs consequences are not necessarily extinguished by the acceptance of a Part 36 offer. Outstanding applications may still be determined after settlement where they concern issues relating to costs, and the outcome of those applications may alter the costs ultimately payable.
Practitioners should therefore remain alert to any outstanding applications when considering the acceptance of a Part 36 offer, particularly where fixed recoverable costs may be affected by the determination of those applications.
That said, it is unlikely that an application issued only after the acceptance of a Part 36 offer would be treated in the same manner, even if made within the seven-day period ordinarily applicable to such applications. The Court is more likely to entertain applications that were already live at the time the offer was accepted. Any applications issued after acceptance should therefore be carefully scrutinised and, where appropriate, challenged.
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