Part 36 Acceptance And Conventional (Assessed) vs Fixed Recoverable Costs

Fixed recoverable costs

Overturning a first appeal decision of His Honour Judge Wulwik in the High Court, Lord Justice Newey determined that in cases which start under the RTA Protocol acceptance of a Part 36 Offer which referred to CPR 36.13 and offered to pay “costs to be subject to if not agreed” did not amount to contracting out of fixed costs, which continued to apply.

“…while the 19 April letter’s reference to “detailed assessment” was far from ideal if the appellant intended the fixed costs regime to apply, it was not wholly inapposite. “Assessed costs” in the sense of costs assessed item by item by reference to work actually done are, as Lord Dyson MR said in Broadhurst v Tan, conceptually different from fixed costs, and such “assessment” as the fixed costs regime may call for is not to be equated with an assessment on the standard basis… As, however, Moore-Bick LJ also noted, the fixed costs regime “does involve an assessment of some kind (particularly in relation to disbursements and cases where the court is satisfied that exceptional circumstances exist)“. I do not think, therefore, that reference to “detailed assessment” should be taken to imply an intention to displace the fixed costs regime where there are other indications that that was not intended.”

However, he cautioned:

“For the future, a defendant wishing to make a Part 36 offer on the basis that the fixed costs regime will apply would, of course, be well-advised to refer in the offer to CPR 36.20, and not CPR 36.13, and to omit any reference to the costs being “assessed””

HO v ADELUKUN [2019] EWCA Civ 1988