Late acceptances of part 36 offers and fixed costs

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Late acceptances of part 36 offers and fixed costs

Published 15 febrero 2017

The question of when Claimants may recover costs in excess of fixed recoverable costs on claims which commenced within the Low Value Protocols has been the subject of further consideration following the Court of Appeal's judgment in Broadhurst & Taylor v Tan & Smith (click here to view insurance adviser alert March 2016).

Whilst the judgment in Broadhurst clarified the position where a Defendant fails to beat a Claimant's part 36 offer at trial, with the Claimant receiving fixed costs up to the stage in which his offer became effective and costs assessed on the indemnity basis from the date when his offer became effective, a question mark remained over whether the Claimant would be in a similar position where the Defendant chose to accept the Claimant's offer some time after the acceptance period expired.

District Judge Etherington, sitting in Stoke on Trent County Court, considered this question in Car Craft Test Centre & John Martin v Kirsty Trotman & Advantage Insurance Company, in which his judgment was handed down on 3 February 2017.

In that case, the Defendants accepted the Claimants' part 36 offer 10 months out of time, but before trial.  Given the application of the fixed recoverable costs regime of r.45.29, as the claim had commenced within the Low Value Protocol, if the Claimants' costs were assessed on the standard basis they would have been no more than they would have been if the offer had been accepted within 21 days. 

The District Judge considered rule 36.13 (costs consequences of acceptance of a part 36 offer) and rule 36.17 (costs consequences following judgment) and concluded that it was not unjust ito award the Claimants their costs from the expiry of the offer on the indemnity basis.

Whilst each case will need to be considered on its merits, this judgment should serve as a reminder of the risk to Defendants and their insurers if part 36 offers are accepted late and should reinforce the importance of agreeing the costs basis of settlement where an offer is accepted out of time.

Authors

David Williams

David Williams

Leeds

+44 (0)113 251 4844

Peter Allchorne

Peter Allchorne

Bristol

+44 (0) 117 918 2275

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