Late acceptance of a Claimant Part 36 offer


This is a case where the Claimant had made a Part 36 offer and that was accepted late in the day (shortly before the scheduled trial) by the Defendant. Costs were fixed up to 21 days post-dating the Claimant’s offer but the Claimant wanted indemnity basis costs for the costs incurred thereafter.

The costs entitlement post-dating 21 days after the Part 36 offer were not agreed and therefore had to be considered by the Court.

At first instance the District Judge limited the Claimants costs to FRC. This was appealed and on appeal the Judge found that the Claimant was allowed FRC up to 21 days after the Claimant’s Part 36 plus variable costs thereafter up to the date of late acceptance.

The case was primarily concerned with whether the non-FRC element of the costs should be assessed on the standard or indemnity basis. Of course the Claimant argued for the latter.

Ultimately the Judge on appeal concluded that whilst the first instance decision regarding indemnity basis costs was potentially vulnerable, the upshot was that the District Judge at first instance had correctly ruled out any entitlement to indemnity basis costs.

Therefore the first instance decision was overturned and the Claimant was awarded FRC plus standard basis costs for the subsequent period.

This case does a couple of things :

1. It confirms that late acceptance by a Defendant of Claimant’s Part 36 offer in a FRC case will result in an allowance of FRC plus variable costs (for the period post-dating 21 days after the Part 36 offer up to the date of acceptance); and

  1. It confirms that late acceptance of a Claimant Part 36 offer is not itself reason to justify an award of indemnity basis costs. A Court has to consider the circumstances of the case if such costs are sought and the Court has to be satisfied that there is good reason (not merely the belated nature of the acceptance) to effectively penalise the Defendant. There could be many reasons but in order to secure an indemnity costs order, the Claimant will have to be able to highlight good reasons before a Court will depart from the usual standard basis award.



Guy Platt-Higgins, 4th September 2017