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England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Lokhova v Longmuir  EWHC 3152 (QB) (07 December 2017)
Cite as:  EWHC 3152 (QB)
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QUEEN'S BENCH DIVISION
MEDIA AND COMMUNICATION LIST
Strand, London, WC2A 2LL
B e f o r e :
| SVETLANA LOKHOVA
|- and -
Justin Rushbrooke QC (instructed by Osborne Clarke) for the Defendant
Hearing date: 1 December 2017
Crown Copyright ©
Mr Justice Warby :
(1) an order that the Defendant's Part 36 Costs be assessed on the indemnity basis, except for those that are already the subject of an order for standard basis costs;
(2) an order that the claimant pay on the indemnity basis the defendant's costs of an application he made, post-acceptance. for an order that the damages payable under the Part 36 offer should be set off against costs which the claimant is due to pay the defendant;
(3) an order that the claimant pay the balance of the defendant's post-acceptance costs, on the standard basis.
Events from 2008 to 23 November 2015
Events from 23 November 2015 to 10 October 2016
"If I am not allowed to amend my claim to add these new statements, I will be at risk for substantial costs because of offers that the Defendant has made previously. … It is therefore critical that these amendments are allowed, in order that the entirety of the Defendant's campaign (or as much of it as I have been able to obtain through the unsatisfactory disclosure so far) can be before the Court."
Events since the 2016 Judgment
"1. The application is made on short notice, and the evidence filed in support has some fairly obvious shortcomings; in particular, it contains no supporting detail about the Claimant's means, in circumstances where I know she was employed at a senior level and (partly for that reason) is the recipient of a very substantial award in the Employment Tribunal.
2. Nevertheless, the evidence is just sufficient in all the circumstances to justify a short extension of time over the holiday period. I bear in mind what is said about the difficulty of getting instructions from the claimant. A further application will have to be made if a further extension is required. That application will need to be supported by evidence.
3, If no better evidence is filed than has been filed in support of this application there is a real risk the extension will not be granted. On the face of it, the claimant should be able to authorise others to amass the evidence necessary to demonstrate rather than merely assert her financial position, and to provide some detail."
"Although I am confident that my claim is worth more than the offer, especially with malice and aggravated damages taken into account, I have to obey the orders of my medical advisors. I cannot continue this claim as a result of the damage caused to me by your clients David Longmuir and Sberbank."
She copied the court on this email, asking for the hearing fixed for 28 April 2017 to be vacated. That was opposed by the defendant, on the basis that although the Unless Order Application had been superseded by the acceptance of the Part 36 Offer the hearing might be required to deal with issues consequential on the acceptance.
"… It might assist you to understand the background. Our client instructed Taylor Wessing to pursue your client for libel … At the time that your client made a Part 36 Offer, Taylor Wessing and Counsel advised her that to beat the part 36 Offer she needed to amend. They did not give any thought to the interplay between recoverable costs and any possible increase in damages. If they had done so, the only advice that a client could have been given was that, the irrecoverable costs of such an amendment would render any increase in damages worthless ie the best position if Ms Lokhova won was financially worse, and if she lost even worse still. If ever there was a case that was pursued for the benefit of the lawyers then this was it …
We have notified Taylor Wessing of a negligence claim. It seems to us that such is the best prospect of your client getting paid.
The allegation of negligence has caused a hiatus in getting the file to work out the costs. It does seem to us that the differential between the costs and damages due to our client and the costs due to your client will be small and might favour our client. We suggest that a deal is agreed that either mediates those costs or resolve by negotiation."
Points of agreement
Defendant's Part 36 Costs: indemnity basis?
(1) On 5 April 2012, the defendant made an open offer of £10,000 in damages, costs, undertakings not to repeat, and apologies. The claimant's then solicitors, RJW, responded positively. After further negotiations, the claimant counter-offered in open correspondence, offering to accept damages of £20,000.
(2) On 10 July 2012 the claimant made further, alternative offers. One was to accept £36,000 as a global payment for damages and costs. The other was to accept £15,000 plus costs. On 19 July 2012, the defendant made an offer of £36,000 all-in, to cover damages and costs. On 27 July 2012 RJW agreed to this in principle, subject to settling claims against the Bank. On 1 August 2012 the claimant, through RJW, indicated that the £36,000 was acceptable, but sought amendments to other aspects of the settlement package offered.
(3) On 9 October 2012 Taylor Wessing took over the conduct of the claimant's claim. On 18 October 2012, she indicated through that firm that she would accept payment of £45,000 all-in. Significantly, the letter gave the firm's assessment of the true value of the claims. Taylor Wessing said "We believe that she would recover damages in the region of £20,000 should this matter proceed to trial." No doubt the claimant was aware of this assessment. On 1 November 2012, the defendant made a Part 36 offer of £25,000 in damages. At the same time, he made an open offer of £25,000 in damages and £25,000 in costs. The offer was therefore in excess of the sum indicated on 18 October.
(4) After a lengthy lull in activity resulting from a stay imposed by agreement, the defendant made two further offers and the Part 36 offer which the claimant has eventually accepted. On 26 October 2015, there was a Part 36 offer of £35,500 in damages. This offer included the proposed amendments that had been indicated in Taylor Wessing's letter of 30 September 2015. On 23 November, at the same time as the final Part 36 offer, there was an open offer of £25,000 in damages plus the claimant's costs on the indemnity basis. Again, the offer was expressed to cover the proposed amendments as well as the claims that were already pleaded.
The Set-Off Application
"(1) If a Part 36 offer is accepted, the claim will be stayed.
(2) In the case of acceptance of a Part 36 offer which relates to the whole claim, the stay will be upon the terms of the offer.
(5) Any stay arising under this rule will not affect the power of the court—
(a) to enforce the terms of a Part 36 offer; or
(b) to deal with any question of costs (including interest on costs) relating to the proceedings…."
The effect of r 36.14(5)(b) seems to be to ensure that the court has full power over the costs of the proceedings, save to the extent that costs orders are prescribed by r 36.13.
Other post-acceptance costs
Costs of this application