Description
The issue of costs was to be resolved by the court following settlement of commercial litigation where the defendant had made a Part 36 offer of £1.
Held: Part 36(14)(2) requires the Court to take into account the justness of applying the normal costs consequences of a claimant failing to obtain a judgment more advantageous than a defendant's Part 36 offer, having regard to the non-exhaustive list of relevant factors in Part 36.14(4). What is just or unjust depends on the particular case, its facts, its history and the negotiations and offers discloseable to the court. As such, the court is entitled to draw inferences from the background facts which are unobjectionable and from the settlement actually achieved. Summaries of applicable principles in
Smith v Trafford Housing Trust [2012] EWHC 3320,
Multiplex Constructions UK Ltd v Cleveland Bridge UK Ltd & Anor [2008] EWHC 2280 (TCC) and
Brit Inns Ltd& Ors v BDW Trading Ltd [2012] EWHC 2489 (TCC) quoted with approval.
In the present case, although the Part 36 offer was valid, a just approach required the parties to pay each others costs on the standard basis for relevant periods up to the time when the litigation became pointless, thereafter each paying their own costs. A proportionate recovery of 50 per cent of the claimants' costs was justified in all the circumstances.
The court suggested that the Rules Committee consider whether express provision should be made in the CPR for reference by a party to the court to permit it to accept a Part 36 offer during the relevant period but with the Ccurt being left to resolve issues of costs.
