Calderbank Offers Not To Be Equated To Part 36 In Split Trial Cases

It is well-established that the existence of a Part 36 Offer in the case of a split hearing displaces the normal presumption that costs will be awarded at the end of the first stage. Instead, in such cases, the normal position is that, save in exceptional circumstances, costs would be reserved.

But what is the position where a Calderbank offer has been made, and the judge is told of its existence? Is the judge, in effect, bound to treat such an offer as equivalent to an offer under CPR 36 and defer a ruling on costs until the conclusion of all stages of the litigation?

boats colliding

Part 36 Consequences Superseded By Settlement Agreement

“I am satisfied that the Settlement Agreement was a binding contract that superseded the acceptance of the Offer. This was because on 26 May 2020 the parties chose to conclude a written settlement agreement with fresh wording and an entire agreement clause. Looking at the parties’ fuller wording in the Settlement Agreement, and taking into account that the had been accepted and incorporated by way of an annex, the parties’ objective intention was to provide a fuller settlement agreement, not merely an agreement memorialising the Offer

Genuine attempt to settle

CPR 36.17 | Part 36 Offer To Accept £1 Was A Genuine Attempt To Settle

The consequences of can be punishing, but it is a separate question whether they are unjust. The justice of Part 36 is that decisions about litigation should be economically utilitarian: it actively discourages litigation on ‘points of principle’ by making litigation not fought on a commercial basis a high stakes activity.

CPR 36.17(5)

CPR 36.17(5) | Costs Following Trial On Liability And The Effect Of An Extant Part 36 Offer

Does the existence of a genuine offer prevent the Court from dealing with the costs of a liability trial prior to quantum being determined even when the “losing” party’s conduct has been egregious?

44% Off

CPR 47.20(3)(b) | Can The Size Of Reduction Save A Bad Offer In Detailed Assessment Proceedings?

CPR 47.20 provides (so far as is relevant) that …

(1) The receiving party is entitled to the costs of the detailed assessment proceedings except where –

(b) the court makes some other order in relation to all or part of the costs of the detailed assessment proceedings.

(3) In deciding whether to make some other order, the court must have regard to all the circumstances, including –

(b) the amount, if any, by which the bill of costs has been reduced.

Unacceptable

CPR 21.10 | Can A Part 36 Offer Be Withdrawn After Acceptance But Before Court Approval?

This case addressed two novel questions:

i) Where a protected party accepts a offer is the other party subsequently able to withdraw that offer before approval of the settlement?

ii) When the court is asked to approve a settlement, on what grounds (if any) can a offer be withdrawn?

Genuine attempt to settle the proceedings

CPR 36.17(4) | Claimant’s Part 36 Offer Which Amounted To 99.7% Of The Claim Was A Genuine Attempt To Settle

In this case Mr Justice Zacaroli determined that the Claimant’s Offer to settle its claim in the sum of £48,290.00, which amounted to 99.7% of the amount claimed was a genuine offer to settle the proceedings

All inclusive

An Interest Exclusive Part 36 Offer Is Not A Part 36 Offer

Can a which excludes interest be validly made either generally or in the context of detailed assessment proceedings?

It is been an issue on which a number of judges have held diverging views.

In the present case, His Honour Judge Dight CBE, upholding Deputy Master Campbell’s first instance decision, had concluded that an offer exclusive of interest cannot be a valid offer.

In contrast, in a matter we reported in May, Horne v Prescot (No 1) Ltd [2019] EWHC 1322 (QB), Nicol J, dismissing an appeal from Master Nagalingam, held that, at least in the context of detailed assessment proceedings, an offer excluding interest can be an effective offer.

So, what is the answer?

The Just Rewards Of A Good Part 36 Offer

CPR 36.17 And The Just Rewards Of A Good Part 36 Offer

Mr Justice O’Farrell rounded up the authorities on CPR 36.17 and found that a Claimant who had beaten its own of £875,000 by less than £5,000 was nonetheless entitled to the benefits conferred by the rule, including enhanced interest on damages and costs, indemnity costs from 21 days after the date of the offer and an additional amount of £65,123.77.

MR v Commissioner of Police for the Metropolis [2019] EWHC 1970

High Court upholds a Claimant’s Part 36 Offer for nil damages in an action against the police

Allowing an appeal from a decision of HHJ Baucher in the Central London County Court Mrs Justice McGowan found than an offer to accept “nil pounds with an admission of liability plus reasonable costs, to be assessed if not agreed” made by a claimant in the course of an action against the police for false imprisonment and assault was a “significant concession” and therefore a genuine offer.