Description
Judgment on substantial costs in which the claimant, accepted as the successfully party overall, was awarded over £6m damages and had beaten its two Part 36 offers of £5.5m and £4m respectively.
Held: It is in accordance with principle to deal with a disallowance of costs before turning to the effect of Part 36 offers, so that the consequences of the offers only affects the costs the claimant is entitled to. A deduction will be made for conduct if it is sufficiently bad to justify an expression of the court's disapproval. Defendants will not be distinguished in terms of the costs order when they have conducted themselves as joint defendants, despite incurring different liabilities. Any issue as to disproportionality in that regard operates between the defendants. Interest on costs is granted at the same rate applicable to damages, unless there is reason to take account of related-party lending. The court should not routinely exercise its jurisdiction to postpone the Judgments Act interest rate.
In the present case, the conceptually significant matters on which the claimant lost were costly enough and significantly severable to justify an issue-based deduction and therefore the making of a proportionate order. On a broad brush approach, the claimant was entitled to 60 per cent of its costs incurred both before and after the Part 36 offer. The imposition of Part 36 sanctions on the defendant whose liability exceeded the offer to settle was not unjust. There were sufficiently serious questions of proportionality and reasonableness to justify the postponement of the Judgement Acts rate on the costs, save for an interim payment of £1.5m, for four months. Permission to appeal allowed. Stay of enforcement pending appeal granted.
