Part 36 – Finally a result for the Claimant!

Part 36 – Finally a result for the Claimant!

Litigation Futures reported this week that Senior Costs Judge Master Gordon-Saker had been overruled by the High Court after denying a Claimant in Detailed Assessment proceedings who had made a successful Part 36 offer the additional 10% uplift he was entitled to as set out in CPR 36.14 (3)(d).

The background of the case was that the Claimant had claimed costs of £262,000 in a medical negligence claim for which had been awarded £90,000 in damages.Following this he had made a Part 36 offer in the sum of £152,000 which had duly not been accepted by the Defendant. A Detailed Assessment ensued wherein Master Gordon-Saker had awarded the Claimant £173,000 together with the required interest. He had however not allowed for the appropriate 10% uplift (which calculated at approximately £17,000) stating that costs should “be treated slightly differently” to ordinary Judgments. Moreover he did not think that the Defendant should pay the additional amount given “the significant reduction” to the Claimant’s bill of costs. He added that his preference would have been to apply the uplift only to the difference between the Part 36 offer and the costs allowed.

Subsequently on 11th May 2015, at the High Court before The Honourable Mrs Justice Slade sitting with Assessor Master Campbell the Appeal was successful – please see full Judgment as set out below.

Mrs Justice Slade stated that the decision of Master Gordon-Saker had penalised the Claimant for making a reasonable Part 36 offer and added that it was the terms of the Part 36 offer, not the amount claimed within the bill of costs which should have been considered.

She concluded that “in this case it is the Claimant who has been penalised for making a reasonable Part 36 offer rather than the Defendant for not accepting it. In my judgment that approach is contrary to the intent and effect of CPR 36 (3) (d)”. She went on to say “as he stated Master Gordon-Saker was dealing with fairly new provisions in CPR 36. His Judgment was given ex tempore. However, whilst recognising his expertise in matters of costs, I have concluded that he erred and the Appeal is allowed”.

This proves more than ever the necessity to make reasonable Part 36 offers that have a more than realistic chance of being successful. An expertly produced offer should be seen as a potential investment with a 10% (or greater) return.
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The full Judgement