Judge refuses uplift after successful part 36 offer on hourly rates

Friston: Additional award would be unjust

A judge has refused to award claimants an uplift on their costs after beating a part 36 offer restricted just to the hourly rates in dispute.

Deputy Master Friston – author of the renowned Friston on Costs textbook – said the defendant had “easily shifted the ‘formidable obstacle’” of proving that it would be unjust to make such an award.

White & Anor v Wincott Galliford Ltd [2019] EWHC B6 (Costs) concerned a provisional assessment over a successful mesothelioma claim. The claimants’ solicitors were Irwin Mitchell.

Costs for provisional assessments are capped at £1,500, plus VAT and court fees, and after the judge set the hourly rates at the level in the part 36 offer, the claimants sought the 10% ‘additional amount’ that is one of the consequences of beating an offer.

The judge found it was a valid part 36 offer in respect of an ‘issue that arises’ (within the meaning of rule 36.5(1)(d)), as opposed to an offer to settle the whole case.

While acknowledging that part 36 was intended to be used tactically, “the court must guard against it being used for the purposes of mere gamesmanship”, Deputy Master Friston said.

“An offer in respect of ‘an issue that arises’ may well allow an offeror to obtain certain benefits (such as an award of costs in respect on that issue on the indemnity basis), but those benefits could not, in my view, be allowed to propagate so as to extend well beyond the issue that is the subject of the offer.

“The suggestion that a paying party ought to pay an ‘additional amount’ on the whole of a receiving party’s profit costs merely because he or she did not accept an offer in respect of only one component of those costs (namely, the hourly rates) is, in my view, unreal. It would be unjust to do what the claimants ask.”

Deputy Master Friston continued that offers of this type would not genuinely encourage settlements.

“It is far more likely that they would lead to unprepossessing and time-consuming disputes about what effect they ought to have.

“Detailed assessments (and provisional assessments in particular) would become unwieldy if the court were routinely to allow parties to rely on offers such as the offer.”

His final reason was that, had the offer been accepted, it would have had “almost no bearing” on the way in which the parties dealt with the matter.

“Given the fact that the offer was made after points of dispute and replies had been drafted, the only effect that acceptance would have had would have been to cause the court to record the agreed hourly rates rather than to adjudicate upon them.

“In the context of a provisional assessment, this would have saved almost no court time at all, nor would it have prevented the parties from incurring costs of any significant amount.”

He had earlier found that the rules enabled him to allow an ‘additional amount’ that was only part of the full award – saying it was a “difficult issue” – but declined to do this either.

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