This case was a personal injury case in which F sought to appeal an order that it should pay a substantial amount towards TMF’s costs. Parties agreed on liability but not on quantum. TMF claimed damages in the sum of £280,000. F made a settlement offer to TMF in the sum of £23,550.79, this was rejected. Thereafter F made another offer of £31,702.53 which was accepted. The issue of costs went before the court. The judge found that TMF was the “successful” party in the period after accepting the offer (October 2008) and accordingly passed an order that F is to pay TMF’s costs for that period. The issue before the Court of Appeal was whether TMF’s conduct was enough to depart from the general rule on costs.
F accepted that TMF was the successful party, therefore the court said that the starting point was that F should pay TMF’s cost. Therefore, was it “appropriate to depart from the starting point and to award less than full costs” to the TMF?
Can F’s Part 36 be taken into account?
The court said that it could be taken into account. “A Part 36 offer which is subsequently withdrawn ceases to attract the consequences set out in rule 36.14. Such an offer then constitutes an “admissible offer to settle” within rule 44.3 (4) (c).”
The court found that there is nothing remarkable in TMF’s conduct of the action, which justifies a departure from the normal order that the claimant should recover the costs of the action.
“In my view, there is no justification for departing from the usual starting point as set out in rule 44.3 (2) (a), namely that the unsuccessful party should pay the successful party’s costs. The judge exercised his discretion on the wrong basis, namely the assumption that the defendant was the successful party. It therefore falls to this court to re-exercise that discretion.”
The judge closed with the following:
“There has been a growing and unwelcome tendency by first instance courts and, dare I say it, this court as well to depart from the starting point set out in rule 44.3 (2) (a) too far and too often. Such an approach may strive for perfect justice in the individual case, but at huge additional cost to the parties and at huge costs to other litigants because of the uncertainty which such an approach generates. This unwelcome trend now manifests itself in a (a) numerous first instance hearings in which the only issue is costs and (b) a swarm of appeals to the Court of Appeal about costs, of which this case is an example.”
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