Court of Appeal confirms fixed costs apply where Part 36 offer accepted out of time
The Court of Appeal has handed down judgment in the case of Hislop v Perde, which related to the Defendant's late acceptance of a Part 36 offer made by the Claimant.
The Claimant had made a Part 36 offer of £1500 which was rejected by the Defendant. However, 18 months later and only one week prior to trial, the Defendant decided to accept the offer.
The Claimant argued that the delay constituted "exceptional circumstances" and that the costs incurred after the expiry of the 21 day period should be awarded to the Claimant on the indemnity basis.
The Judgment of Lord Justice Coulson confirmed that the delay, even without any reasonable justification, could not be considered to be a trigger under the exceptional circumstances provision. The rules were the same for both the Claimant and the Defendant and there could be no presumption that accepting an offer out of time could be regarded as exceptional.
Comment: This decision was wholly expected. The rules are quite clear on this and work both ways for Claimants and Defendants. The outcome will not always seem to be fair on the reading of an individual case such as with this one, but all parties know where they stand.
It becomes important for all parties to be aware of the offers they have on the table. There is no suggestion here that the Claimant was no longer happy to accept the offer for damages, but if some considerable time has passed since a Part 36 offer was made then it is prudent to ensure that it still represents a reasonable or acceptable level of damages. The option is always open to withdraw historical offers.
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