Another case dealing with the thorny issue of withdrawn Part 36 offers is Britned
Development Limited v ABB AB & Anor. Here, the Defendant withdrew a Part 36 offer after trial but before judgment. The Claimant was awarded damages in a lower sum and the parties were in a dispute as to the costs consequences.
The starting point is that withdrawn Part 36 offers do not enjoy the usual Part 36 costs consequences following judgment however they are one of the matters which are relevant to the proper exercise of the costs discretion pursuant to Part 44. As Mr Justice Marcus Smith set out at paragraph 8 of the judgment:
In these circumstances, given that the Part 36 offer was withdrawn by ABB, the existence of the offer is no more than a factor that must be taken into account in my assessment of costs. It cannot, because it was withdrawn, automatically have the consequences laid down in CPR 36. There is no automatic read-across into non-CPR 36 cases of the consequences of CPR 36 in relation to a CPR 36 compliant offer. It is simply that offers made, including withdrawn Part 36 offers, become a relevant factor in the assessment of costs under CPR 44. Of course, the fact that such an offer was made may be very significant; or it may not be. That depends on the individual case.
It was noted that the matter had been difficult to quantify. The material dispute related to a claim for damages arising out of a restriction of competition contrary to the Treaty on the Functioning of the European Union. The Claimant, whilst ultimately the successful party, recovered damages of less than 10% of those sought and less than the Defendant’s Part 36 offer.
The court considered, but ultimately rejected, an issues based costs order. The final decision was that there would be no order as to costs.
This is one of a number of cases dealing with the effect of withdrawn offers. There is a common misconception that a withdrawn Part 36 offer can be safely ignored. This is not the case. Ultimately the effect of a withdrawn Part 36 offer will depend upon all the circumstances of the case however parties should remember that they can be taken into account by the court when assessing costs.