Master of the Rolls delivers landmark judgment
The Court of Appeal’s landmark ruling that a Part 36 offer prevails over fixed costs will enable claimants to “escape the straitjacket of fixed costs”, a leading litigation expert has said.
Lord Dyson’s ruling last week, in Broadhurst & Anor v Tan & Anor [2016] EWCA Civ 94, [2016] All ER (D) 219 (Feb), means that a claimant making a good offer which the defendant fails to accept will be entitled to her costs assessed on an indemnity basis.
Professor Dominic Regan of City University, an NLJ columnist who advised Lord Justice Jackson on his civil litigation costs review, says the case is “profoundly important” for claimants.
“An astute claimant should always make a viable Part 36 offer anyway,” he says. “Defendants will be terrified.”
The two joined-up cases in Broadhurst concerned low-level road traffic accident claims, which were subject to fixed costs. Under Part 36, a claimant can recover assessed costs where she obtains a judgment against the defendant, which is at least as advantageous to her as the proposals contained in her Part 36 offer. In both cases, the claimant’s Part 36 offer was rejected by the defendant and the claimant went on to obtain judgment which was more advantageous than the offer she had made.
Delivering his judgment, Lord Dyson, Master of the Rolls, said Parliament could not have intended to penalise claimants who beat their Part 36 offers. Therefore, the claimants were entitled to assessed costs rather than fixed costs.
Regan adds that District Judge Stephen Gold predicted this outcome in his column for NLJ back in August 2013 (see “Civil way” 163 NLJ 7573, p 11).
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