“If a claimant wishes to benefit from the provisions of paragraph 7.13 to 7.22 (and by doing so be paid an interim payment), he or she must obtain a stay under paragraph 7.12. This, to my mind, is the natural reading of the Protocol. It is also entirely understandable why the drafters of the Protocol would wish to restrict a claimant’s ability to seek interim payments under paragraphs 7.13 and 7.18 to certain defined circumstances (namely, those that are set out in paragraph 7.12)…. it must follow that the Claimant wrongly exited the Portal.”
The consequences of Part 36 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 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.
In the course of this personal injury claim the Claimant had made two Part 36 Offers, to essentially the same effect, namely that he would accept 90% of his claim for damages and interest to be assessed, on the basis that liability was admitted. The Claimant had alleged that he had sustained two distinct injuries as a result of the Defendant’s negligence in the form of whiplash and injury to his lower back. He had claimed damages of approximately £10,000.
CPR 36.17(4) applies where a Claimant beats its own Part 36 Offer in substantive proceedings bringing with it various rewards including a 10% uplift, enhanced interest and indemnity costs. The question to be addressed in this case was whether it applies equally to the costs of detailed assessment i.e. can you make a valid Part 36 Offer in respect of the costs of the detailed assessment proceedings and reap those same rewards if it is beaten? In other words, do the the costs of the detailed assessment proceedings, for the purposes of CPR 36.17(4), fall within “any issue that arises in the claim”?
This Court of Appeal decision concerned the circumstances in which the award to a Claimant who beats its own Part 36 Offer of some or all of the specified relief under CPR 36.17 may be considered to be unjust.
In this case Mr Justice Zacaroli determined that the Claimant’s Part 36 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
Having beaten his own offer at trial the Claimant was awarded indemnity costs under CPR 36.17(4)(b) from 21 days after the date on which it was made.
The Claimant also claimed indemnity costs on a broader basis and for a longer period by reason of the Defendant’s failure to engage in settlement discussions. or contemplate any form of ADR.
Can a Part 36 Offer 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 Part 36 offer.
In contrast, in a matter we reported in May, Horne v Prescot (No 1) Ltd  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 Part 36 offer.
So, what is the answer?
In November last year we reported on the case of Finnegan v Frank Spiers  EWHC 3064 (Ch) in which Mr Justice Birss held that there is no jurisdiction to award a payment on account under CPR 44.2(8) in circumstances where a claim is settled by way of acceptance of a Part 36 Offer.