Whalley v Advantage Insurance [2017]: Costs consequences following the late acceptance of Part 36 offers in fixed costs cases

elliot_kay_pi

By Elliot Kay

 

The Claimant brought a claim for personal injury arising out a road traffic accident which took place on 11th July 2014. The Claimant went on to make a Part 36 offer to accept an 85/15 split on liability dated 7th December 2015. The Defendant’s time for accepting the offer expired on 30th December 2015. The Defendant did not in fact accept the Claimant’s Part 36 offer until 29th January 2016. The delay in accepting the offer was therefore just under one month post expiry. Quantum was agreed in the sum of £10,000 which was paid. The issue was whether the Claimant’s costs were limited to fixed costs for the entire action or whether the Claimant was entitled to either assessed costs or indemnity costs for the period 30th December 2015 to 29th January 2016.

In essence, the case addresses the tension between two self contained codes, namely, Part 36 and Part 45, in circumstances where there is no express rule addressing the consequences of the late acceptance of a Part 36 offer.

DJ Besford engaged in a detailed analysis of the conflicting authorities relevant to this point, namely:

Solomon v Cromwell [2012] 1 WLR 1048

Ontulmus v Collett [2014] EWHC 4117

Broadhurst v Tan [2016] EWCA Civ 94

Sutherland v Khan (2016) Hull County Court

Ali v Sabre Insurance Company Ltd (2016) Birmingham County Court

Anderson v Ladler (2017) Newcastle County Court

Richardson v Wakefield Council (2017) Leeds County Court

McKeown v Venton (2017) Liverpool County Court

Hislop v Perde (2017) Central London

It is beyond the scope of this article to engage in such an analysis save as to confirm that there is no High Court or Court of Appeal authority which conclusively determines the issue. Further, there are a number of conflicting County Court decisions (see above) which have resulted in matters being far from clear and are frequently relied by both Claimants and Defendants when this issue comes before the Court.

District Judge Besford had previously heard the case of Sutherland v Khan in which he determined that a Claimant was entitled to fixed costs up to the date of expiry of the Part 36 offer. Thereafter, DJ Besford had held that a Claimant was entitled to costs on the indemnity basis from the expiry of the offer until the date of acceptance.

With the benefit of a number of County Court decisions having been handed down between Sutherland v Khan and the instant case, DJ Besford held that a Claimant should be restricted to the Part 45 fixed costs unless there were “exceptional circumstances” to enable the Claimant to invoke CPR 45.29J. The learned judge accepted that his previous decision was “not supported from a detailed analysis of the rules and case law”.

Whilst this case appears to favour Defendants and is arguably the most thorough decision on this point to date, it is unlikely to be the last we hear on this issue. Whether the clarification will come from the higher courts or the rules committee remains to be seen.

 

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