Part 36 offers: whether genuine attempt to settle
MVN (R on the application of) v London Borough of Greenwich
High Court (Admin)
10 July 2015
When Part 36 was reformed in April, one of the amendments was aimed at addressing “cynical Part 36 offers”. The court always had to consider a number of factors when deciding whether it is unjust to award the additional benefits under Part 36 but a new factor was introduced in CPR 36.17(5)(e): whether the offer was a genuine attempt to settle the claim. Although this issue has arisen in some pre-April decisions, we now have what we believe to be the first the High Court decision to consider the new provision. Andrew Cousins reviews MVN v London Borough of Greenwich.
The substantive issue in this case had been a dispute over the claimant’s age and whether or not the claimant was a child. After exchanging witness statements, the claimant made an offer which purported to be a Part 36 offer on terms that the defendant would accept the claimant’s case about his age and agree to pay costs.
At trial Picken J accepted the claimant’s evidence concerning his age. Following the judgment there was no issue that the defendant must pay the claimant’s costs. However, there was an issue as to whether the claimant should recover indemnity costs and interest on costs as set out in CPR 36.17(4).
The claimant argued that he had obtained a judgment at least as advantageous to him as the terms of the Part 36 offer. The defendant argued that the offer was not a genuine offer and that it would be unjust to order the recovery of enhanced costs and interest.
Picken J, dismissing the claimant’s arguments, held:
There was no “give and take” in the claimant’s Part 36 offer and acceptance of it would have constituted complete capitulation by the defendant. The claimant was offering to settle for nothing short of what was being claimed in the proceedings. The offer was merely a “tactical ploy” and was not a genuine offer of settlement.
It would be unjust to give the claimant enhanced costs as sought as the offer was all take and no give. When considering the factors listed in CPR 36.17(5), and whether it is unjust to make an enhanced costs order, the court has to look at the position not only of the claimant but the more general position of the case and the offer as a whole and what the claimant was actually offering to the defendant.
Whilst the genuineness of the offer is only one consideration set out in the list of factors for the court to consider, it is incorrect to take the approach that the only question the court should ask is whether the judgment is “at least as advantageous” as the Part 36 offer. The court has to examine the terms of the offer and as the claimant was not offering to “give” anything to the defendant and was solely looking to “take” from the defendant, it would be unjust to award the claimant enhanced interest and costs.
The claimant relying upon the case of East West Corporation v DKBS (2002) also sought to argue that, if accepted, the offer would have entailed a saving of costs on both sides so that the claimant should be regarded as offering to save costs for the defendant such that this represented the necessary ‘give’.
The judge rejected this point was rejected stating that Part 36 is in itself concerned with costs implications and that costs should not be taken into account when determining whether the offer was genuine or not.
For further information please contact Andrew Cousins, Senior Solicitor Advocate, Insurance on 0161 603 5093
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