Partially allowing an appeal of a costs order following a trial, McGowan J confirmed that a Part 36 offer to settle for nil damages may be viewed as a genuine Part 36 offer.
The case involved proceedings against the police for false imprisonment and assault. The defendant had made a Part 36 offer to settle the proceedings for £4,000 which was rejected by the claimant. The defendant offered a letter of apology but no admission of liability. Subsequently, the claimant made a Part 36 offer that the matter be settled for nil pounds with an admission of liability plus reasonable costs to be assessed, if not agreed. The defendant never responded to that offer. At trial, the claimant was awarded damages of £2,750 and the trial judge made no order as to costs.
McGowan J did not disturb the order for no costs up to the relevant date in relation to the claimant’s Part 36 offer. She noted the judge’s discretion and considered that she was entitled to find that an order for no costs did justice to the parties. The judge had found that, to “clear his name”, the claimant had to pursue the litigation to trial. He was never going to obtain the admission he wanted from the defendant by pre-trial negotiation and settlement. At trial, his arrest was found unlawful, albeit on limited grounds, he was vindicated and so the judge described him as the “successful party”. He won financial compensation, though it was less than the offer that had been made by the defendant. It would be unjust for the defendant to recover costs on the basis of their Part 36 offer, and just because the claimant was entitled to proceed to court, it did not mean that he was “entitled” per se to his costs.
However, McGowan J considered that the Part 36 consequences should apply to the claimant’s offer. She said that giving up any and all claim to a financial remedy is a significant concession and therefore a genuine Part 36 offer. The claimant’s offer engaged CPR 36.17 and so he was entitled to his costs from the expiry of the relevant period and other consequences. It was not unjust to apply CPR 36.17 in that way and it would be unjust not to do so.
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