Peter Savory reviews today’s costs decision in Attersley

Today, the Court of Appeal handed down its decision in Attersley v UK Insurance. In brief, the issue is how Part 36 interacts with allocation and the potential disapplication in whole or in part of fixed costs.

The Claimant commenced an RTA claim in the Protocol. It exited due to a liability dispute. A Part 7 claim was issued, at which point the Claimant had obtained medical evidence, and the claim was valued at up to £150,000. The Defendant filed a defence admitting liability and on the same day made a Part 36 offer of £45,000. That offer was not accepted within the relevant 21 day period.

Some 9 months later a CCMC allocated the claim to the multi-track, the parties having agreed on that allocation (and there being numerous experts and a five-day trial timetabled). A further 5 months later the Defendant made an application to amend its Defence to allege dishonesty in respect of quantum. Before that application was heard the Claimant accepted the offer of £45,000.

The parties could not agree on the cost consequences of acceptance; whether the Claimant was entitled to standard basis costs as she submitted, or limited to fixed costs as was the Defendant’s case.

At first instance before HHJ Duddridge, the answer was fixed costs. CPR 36.20, reflecting the costs consequences of Section IIIA of Part 45, applied. It was noted that it would be arbitrary for a claimant who had accepted an offer post 21 days to be entitled to a different amount of costs depending on when allocation happened, that being outside of the parties’ control. At first appeal Stacey J disagreed and, largely in reliance on Qadar v Esure Services, determined fixed costs ceased to apply to a  case allocated to the multi-track, CPR 36.13.

The Court of Appeal noted the principal issue was whether costs were determined by rule 36.13, or 36.20. In a detailed textual analysis of the rules and the interplay therein, the Court held that where on the date of the expiry of the offer the case fell within Section IIIA, costs remained to be governed by 36.20 “even in a case which is subsequently allocated to the multi-track”.

It went on to observe:

• This was a workable and straightforward interpretation of the text of rule 36.20;
• The words “and for so long as the claim is not allocated to the multi-track” in rule 45.29B, where a case comes to be allocated to the multi-track, do not suggest it needs to be treated as never having fallen within Section IIIA;
• Qadar did not establish, as submitted by the Claimant, that upon allocation to the multi-track Part 45 was disapplied with retrospective effect (not least because in Qadar that had been no discussion of Part 36);
• It was hard to see why a Claimant who accepted an offer outside of the 21days should be in a better position than one who accepts in time.

In summary, a Claimant in an ex-Protocol case who accepts a Part 36 offer where the relevant period expires before disapplication of Section IIIA, is only entitled to fixed costs.

The Court noted, but did not consider, other potential issues for consideration by the Rules Committee where the “existing rules do not yield entirely straightforward answers”, including where a Part 36 offer was made in an ex-Protocol case but after allocation to the multi-track, or where the offer was made before allocation but expired after allocation.

 

Review produced by Peter Savory, barrister at Farrar’s Building. For further information, please contact his Clerking Team.

 

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