Court allows escape from fixed costs after offer accepted late

Stoke County Court has awarded indemnity costs against a defendant who had been late in accepting a claimant’s Part 36 offer in a claim brought under the road traffic accident protocol. 

The ruling has been held up as significant for claimants in light of the expected extension of fixed recoverable costs. 

In Car Craft Test Centre and Martin v Trotman & Advantage Insurance Company on 3 February, District Judge Etherington awarded indemnity costs against a defendant that had accepted the claimant’s offer 10 months out of time, but before trial.

Adopting the same approach as DJ Besford in Kingston upon Hull in Sutherland v Khan last April, DJ Etherington awarded indemnity costs from the date that the Part 36 offer had expired.

Etherington rejected the defendant’s arguments that such a ruling would open the floodgates to applications for indemnity costs.

The claimant had made its Part 36 offer after disclosure of medical evidence, before proceedings were commenced.

Etherington considered that it would not be ‘unjust’ to make an award of indemnity costs, having considered the factors listed under CPR 36.17 (5).

Joe Rose, a costs lawyer at PIC, which acted for the claimant, said: ‘This is an extremely important case in light of the potential extension of fixed costs as it is further confirmation, following Sutherland v Khan, that Part 36 has sufficient bite to encourage parties to settle early and to avoid wasting valuable court resources.

‘It is also an important evolution in the interpretation of Part 36 and the making of indemnity costs awards, with the judgment being extremely detailed and mindful of all of the conflicting parts of the CPR as well as previous case law.

‘However, [those making offers] should be mindful that this does not give an automatic entitlement for them to seek indemnity costs in all cases, and they will have to consider the facts of the individual case carefully, applying CPR 36.17(5), before considering making such an application.’

Usha Nayee, senior solicitor at the claimant’s solicitors, Alps Legal Practice, added: ‘This was a commonsense decision. If this case was decided against the offeror, then that would have effectively meant that Part 36 means very little and there is no incentive for parties to settle cases swiftly.

‘An offeree could have effectively accepted an offer just one day before a trial without any costs consequences.’

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Court allows escape from fixed costs after offer accepted late