The Issues:

Astute conveyancers may recall the name of this case in relation to conveyancing fraud, but this case also concerned Part 36 offers.

On 20th May 2015, the Claimant made a Part 36 offer of £516,000. At trial he recovered £518,983.01 (including interest). Judgment was handed down on 14th April 2016. Had the Claimant actually bettered its Part 36 offer?

The Claimant argued that he was entitled to enhanced costs from the end of the 21-day period (10th June 2015). The Defendant argued that it was not correct to compare the offer sum and the sum awarded at trial as the court should take into account the fact that 309 days had elapsed between the end of the 21-day period for acceptance of the Part 36 offer and the date of judgment.

On the facts of the case, the claimant had only beaten the offer if interest was added to the offer from the expiry of the date for its acceptance up until the date of judgment.

Held:

HHJ Pelling, sitting as a High Court judge, said that a Part 36 offer was deemed to include only the interest to the date when the relevant period for accepting the offer expired.

The Claimant who only beat his part 36 offer at trial because of the contractual interest on the damages awarded through to Judgment was not therefore entitled to enhanced costs under the rule.

Comment:

The status quo therefore remains unchanged, as this decision has reached the same conclusion as the Court of Appeal in Stephen Blackman v Entrepose (2004), a decision which came prior to the Part 36 rule changes in 2007 and 2015.

As a Claimant lawyer, you would no doubt want to protect your client in such a case where a well-pitched Part 36 offer is made. We can confirm that the Box Legal “ClaimSafe” After the Event Insurance policy provides cover in the above situation.

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