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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 >> Horne v Prescot (No.1) Ltd (Rev 1)  EWHC 1322 (QB) (24 May 2019)
Cite as:  1 WLR 4808,  EWHC 1322 (QB),  Costs LR 279,  WLR 4808,  WLR(D) 303
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL
B e f o r e :
| Evelyn Horne
(as Executrix of the estate of Edward Horne, deceased)
|- and -
|Prescot (No.1) Ltd
Benjamin Williams QC (instructed by Fieldfisher LLP) for the Respondent/Claimant
Hearing dates: 7th May 2019
Crown Copyright ©
Mr Justice Nicol :
The underlying claim
The material parts of the (current) Civil Procedure Rules
'The provisions of Part 36 apply to the costs of detailed assessment proceedings with the following modifications –
(a) "claimant" refers to "receiving party" and "defendant" refers to "paying party"
(b) "trial" refers to "detailed assessment hearing"
(c) a detailed assessment hearing is "in progress" from the time when it starts until the bill of costs has been assessed or agreed.
(d) for rule 36.14(7) substitute, "If such sum is not paid within 14 days of acceptance of the offer, or such other period as has been agreed, the receiving party may apply for a final costs certificate for the unpaid sum."
(e) a reference to "judgment being entered" is to the completion of the detailed assessment and references to a "judgment" being advantageous or otherwise are to the outcome of the detailed assessment.'
The parties are agreed that the modifications simply adapt the language of Part 36 to the language of detailed assessment proceedings.
(1) This Part contains a self-contained procedural code about offers to settle made pursuant to the procedure set out in this Part ("Part 36 offers")
Section I Part 36 offers to settle
(2) Nothing in this Section prevents a party making an offer to settle in whatever way that party chooses, but if the offer is not made in accordance with rule 36.5, it will not have the consequences specified in this Section.
(Rule 44.2 requires the court to consider an offer to settle that does not have the costs consequences set out in this Section in deciding what order to make about costs)
(3) A Part 36 offer may be made in respect of the whole, or part of, or any issue that arises in –
(a) a claim, counterclaim or other additional claim; or
(b) an appeal or cross appeal from a decision made at a trial.
(1) A Part 36 offer must-
(a) be in writing;
(b) make clear that it is made pursuant to Part 36;
(c) specify a period of not less than 21 days within which the defendant will be liable for the claimant's costs in accordance with rule 36.13 or 36.20 if the offer is accepted.
(d) state whether it relates to the whole of the claim or to part of it or to an issue that arises on it and if so to which part or issue; and
(e) state whether it takes into account any counterclaim
(2) Paragraph (1)(c) does not apply if the offer is made less than 21 days before the start of a trial.
(3) In appropriate cases, a Part 36 offer must contain such further information as is required by rule 36.18 (personal injury claims for future pecuniary loss), rule 36.19 (offer to settle a claim for provisional damages) and rule 36.22 (deduction of benefits).
(4) A Part 36 offer which offers to pay or offers to accept a sum of money will be treated as inclusive of all interest until –
(a) the date on which the period specified under rule 36.5(1)(c) expires; or
(b) if rule 36.5(2) applies, a date 21 days after the offer was made.
36.6 Part 36 offers - defendant's offer
(1) Subject to rules 36.18(3) and 36.19(1), a Part 36 offer by a defendant to pay a sum of money in settlement of a claim must be an offer to pay a single sum of money.
36.13 Costs consequences of acceptance of a Part 36 offer
(1) Subject to paragraphs (2) and (4) and to rule 36.20, where a part 36 offer is accepted within the relevant period the claimant will be entitled to the costs of the proceedings (including their recoverable pre-action costs) up to the date on which notice of acceptance was served on the offeror.
(2) Where –
(a) a defendant's Part 36 offer relates to part only of the claim; and
(b) at the time of serving notice of acceptance within the relevant period the claimant abandons the balance of the claim
The claimant will only be entitled to the costs of such part of the claim unless the court orders otherwise.
(3) Except where the recoverable costs are fixed by these Rules, costs under paragraphs (1) and (2) are to be assessed on the standard basis if the amount of costs is not agreed.
(4) Where –
(a) a Part 36 offer which was made less than 21 days before the start of a trial is accepted; or
(b) a Part 36 offer which relates to the whole of the claim is accepted after the expiry of the relevant period; or
(c) subject to paragraph (2), a Part 36 offer which does not relate to the whole of the claim is accepted at any time
the liability for costs will be determined by the court unless the parties have agreed the costs
36.14 Other effects of acceptance of a Part 36 offer
(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.
(3) If a Part 36 offer which relates to part only of the claim is accepted, the claim will be stayed as to that part 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
36.17 Cost consequences following judgment
(1) Subject to r.36.21, this rule applies where upon judgment being entered
(a) a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer; or
(b) a judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer
(2) For the purposes of paragraph (1), in relation to any money claim, or money element of a claim, "more advantageous" means better in money terms by any amount, however small, and "at least as advantageous" shall be construed accordingly.
(3) Subject to paragraphs (7) and (8) where paragraph (1)(a) applies, the court must, unless it considers it unjust to do so, order that the defendant is entitled to –
(a) costs (including any recoverable pre-action costs) from the date on which the relevant period expired, and
(b) interest on those costs.
(4) Subject to paragraph 7 where paragraph 1(b) applies, the court must, unless it considers it unjust to do so, order that the claimant is entitled to –
(a) interest on the whole or part of any sum of money (excluding interest) awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired.
(b) costs (including any recoverable pre-action costs on the indemnity basis from the date on which the relevant period expired.
(c) interest on those costs at a rate not exceeding 10% above base rate; and
(d) provided that the case has been decided and there has not been a previous order under this sub-paragraph, an additional amount...'
'Costs of detailed assessment proceedings – rule 47.20: offers to settle under Part 36 or otherwise Where an offer to settle is made under Part 36 or otherwise, it should specify whether or not it is intended to be inclusive of the cost of the preparation of the bill, interest and VAT. Unless the offer states otherwise it will be treated as inclusive of these.'
The terms of the Claimant's offer
'Without Prejudice save as to costs – Part 36 offer
The Claimant hereby makes an offer to settle in accordance with CPR Part 36. This offer is intended to have the consequences of Section 1 of Part 36.
If the Defendant accepts this offer within 21 days of the date it is received the Defendant will be liable for the Claimant's costs in accordance with Rule 36.13. After 21 days the Defendant may only accept this offer if we agree the liability as to costs. If this cannot be agreed the Court will make an Order.
This offer relates to the whole of the Claimant's claim for the costs of the action excluding interest and excluding the costs of assessment.
There is no counter claim to the Claimant's claim.
The offer is that the Claimant shall accept the sum of £82,000 in full and final settlement of her claim for costs exclusive of interest and exclusive of the costs of assessment.
This offer is acceptable only by your serving written notice of acceptance.'
The Master's decision
'That in part Miss Culley [the Defendant's representative], is your interpretation of rule 36.5(4). I do not agree with your interpretation. The practice direction assists me in interpreting how a rule was drafted. I do not think it right to conclude that an offer that is exclusive of interest is automatically non-compliant with Part 36. My reading of rule 36.5(4) effectively clarifies that what the practice direction is saying that if interest is not expressly excluded then it is deemed to be included. That gives clarity and is extremely important in Part 36 so that the parties know exactly the value of the offer they have received. I think Mr Benson [representative of the Claimant] is right to refer me to the practice direction for the purpose of the record [the Master then quoted CPR 47PD paragraph19 and continued] The offer states otherwise. That does not lock the receiving party, or the party that made that offer out of the Part 36 consequences and therefore the Part 36 consequences will apply. The test there, of course, is provided it is not unjust that they apply. You can of course make that argument Miss Culley, but on the face of it I do not see that there are any just reasons to lock the receiving party out of the Part 36 consequences. The whole point of Part 36 is to encourage settlement and incentivise the parties in that regard.'
Interest: on substantive claims and on awards of costs
'(1) Every judgment debt shall carry interest at the rate of 8% per annum.
(2) Rules of court may provide for the court to disallow all or part of any interest otherwise payable under subsection (1).'
'(1) Where interest is payable on a judgment pursuant to s.17 of the Judgments Act 1838 or s.74 of the County Courts Act 1984, the interest shall begin to run from the date that judgment is given unless-
(a) A rule in another Part or a practice direction makes different provision; or
(b) the court orders otherwise.
(2) The court may order that interest shall begin to run from a date before the date that judgment was given.'
'Unless the court otherwise orders, interests on the costs of detailed assessment proceedings will run from the date of default, interim or final costs certificate as the case may be.'
'The orders which the court may make under this rule include an order that a party must pay –
(g) interest on costs from or until a certain date including a date before judgment.'
'the court may disallow all or part of the interest otherwise payable to the receiving party under s.17 of the Judgments Act 1838 or s.74 of the County Courts Act 1984 but will not impose any other sanction except in accordance with r.44.11 (powers in relation to misconduct)' – r. 47.8(3).
'The date from which any entitlement to interest under this certificate is to run is-
1. As to the amount of the bill as assessed excluding the costs of assessment, the date of the order [i.e. the date of the order entitling the claimant to her costs which was the order sealed on 29th December 2017]
2. And as to £20,018.39 being the costs of assessment, the date of this certificate.'
The Appellant's submissions
i) As a general matter (setting aside whether there is any special regime for detailed assessment proceedings) Part 36 precludes the claimant making an offer which is exclusive of interest.
ii) It is no different in the particular circumstances of detailed assessment proceedings. In that context as well, an offer exclusive of interest cannot be a valid Part 36 offer.
iii) The argument in the Respondent's Notice that the offer made by Fieldfisher should be interpreted as inclusive of interest should be rejected.
iv) The further alternative in the Respondent's Notice that, in the Court's discretion, the Claimant should be awarded indemnity costs and enhanced interest should also be rejected. Mr Carpenter observes that the Respondent accepts that the court would have no jurisdiction to award the additional amount akin to rule 36.17(4)(d).
Can a valid Part 36 offer which excludes interest be made by a claimant in general litigation?
i) 1999-2007 Mr Carpenter argued that as originally adopted Part 36 had these notable features, referring to the 1999 version of the Rules:
a) The Court had a discretion to disregard non-compliance with the requirements of Part 36 – see then rule 36.1(2).
b) A defendant could only offer to settle a money claim by paying that sum of money into court – see then rule 36.3(1).
c) An offer could be made to settle part only of a claim or any issue that arose in the claim – see then rule 36.5(2) and (3).
d) By then r.36.22 a claimant's offer to accept a particular sum of money would be treated as inclusive of interest 'unless [the offer] indicates to the contrary'. If the contrary was expressed and so the offer was exclusive of interest, then r.36.22(2) required the offeror to say whether interest was offered, and, if so, the amount offered, the rate or rates offered and the period or periods for which it was offered – then r.36.22(2).
e) By then rule 36.5(6) a Part 36 offer had only to be available for a minimum of 21 days (by contrast Part 36 offers now are without limitation of time, though different consequences follow if the offeree wishes to accept the offer more than 21 days later).
Thus, because of then r.36.22, Mr Carpenter argued, the type of offer made in the present case would not have been a valid Part 36 offer under the 1999 rules because the Claimant had not said whether she would require interest on the amount of costs she offered to accept, nor, if she was expecting interest to be paid at what rate or for what period she was expecting it.
ii) 2007 version Mr Carpenter stressed that so far as this version of the rules was concerned:
a) They removed the discretion to treat a non-compliant offer as a valid Part 36 offer – see then r.36.1(2).
b) As before the offer had to give the offeree at least 21 days to accept it with the beneficial consequences – then r.36.2(2) (c) and (d), but, as long as the offer had not been withdrawn, it could be accepted at any time, subject to some qualifications.
c) As previously, the offer could relate to part of the claim or an issue which arose in the claim – see then r.36.2(2)(d).
d) The 2007 Rules abolished the requirement that a defendant's offer in relation to a money claim had to be accompanied by a payment into court. Instead, subject to immaterial exceptions, 'a Part 36 offer by a defendant to pay a sum of money in settlement of a claim must be an offer to pay a single sum of money.' – see then r.36.4(1).
e) He submitted by reference to then r.36.11 that if the offer related to the whole of the claim and was accepted, there would be no power to deal with any question of interest because the action would be stayed and the qualifications to the stay did not include the determination of interest.
f) What is now r.36.5(4) appeared as then r.36.3(3) in identical language.
i) As with the 2007 version, the Court had no discretion to treat an offer, which did not comply with Part 36, as though it did.
ii) If the Part 36 offer relates to only part of the claim, the liability for costs must be determined by the Court unless the parties agree – see r.36.13(4)(c). There would, in other words, in those circumstances be no automatic entitlement to costs if such an offer was accepted.
iii) As noted, under the original rules, a Part 36 offer expressed to be exclusive of interest had nonetheless to spell out whether interest was offered and, if so, its rate and the period. Thus, an offer of the kind in the present case would not, under those rules, have been a valid Part 36 offer. No good reason as to why the current version of the Rules should lead to a different outcome has been advanced.
iv) The effect of the Master's decision is that r.36.5(4) is re-written as if it said 'Unless the offer indicates otherwise a Part 36 offer which offers to accept a sum of money will be treated as inclusive of all interest until...'. Yet words to the same effect had been included in the 1999 version of the rules and have now been deleted.
v) There is an obligation on a Defendant who wishes to make a Part 36 offer which includes payment of a sum of money to express the offer as a single sum. There is no good reason why the ability of a claimant to offer to accept a sum of money should not be similarly constrained. In both cases there is a value in requiring certainty and precision: the offeree would then know precisely what is on the table.
vi) Mr Carpenter recognised that r.36.5(4) was couched in different language to 36.5(1). It said that an offer to accept a sum of money 'will be treated as inclusive of all interest.' This was different from the way in which r.36.5(1) was expressed ('A Party 36 offer must'). However, he submitted, this was a distinction without a difference. Rule 36.2(2) says,
'Nothing in this Section prevents a party making an offer to settle in whatever way that party chooses, but if the offer is not made in accordance with rule 36.5, it will not have the consequences specified in this Section [emphasis added].'
Mr Carpenter argues that the offer must be 'in accordance with' all the subparagraphs of r.36.5, not just 36.5(1) and this offer was not in accordance with r.36.5(4).
vii) In any event, Mr Carpenter submitted, an offer will not be a valid Part 36 offer if its terms are inconsistent with the Part 36 scheme. In Mitchell v James  EWCA Civ 997,  1 WLR 158 CA the offer had proposed that each party bear its own costs. That was not compatible with the Part 36 scheme (as it then existed, or now) and the offer was not a valid Part 36 offer, even though it had not contravened any of the then mandatory requirements for a valid Part 36 offer, see too, James v James  EWHC 242 (Ch).
i) Part 36 was to be construed as a whole. If, on its true construction interest had to be included in a valid Part 36 offer, r.36.2(3) could not permit the claim to be divided up in this way.
ii) The historical development of Part 36 is against the idea that interest could be treated as a distinct part of the claim.
iii) If interest could be treated as a severable issue, there would be unexpected consequences if the offer was accepted. The offeree would not automatically be entitled to his or her costs – see r.36.14(4)(c).
iv) If the offer was intended to apply only to part of the claim, it did not comply with r.36.5(1)(d) which requires the offer to 'state whether it relates to the whole of the claim or part of it or to an issue which arises in it and, if so, to which part or issue.' This offer was expressed to relate to 'the whole of the Claimant's claim for the costs of the action excluding interest and excluding the costs of the assessment.' The phrase 'the whole of the claim for costs' was intended to echo the same phrase in r.36(1)(d). No part or issue as such was identified.
Can an offer to settle detailed assessment proceedings be valid if it is exclusive of interest?
' In my view, this question only has to be posed for the answer to become immediately apparent. In civil proceedings, claims/parts/issues can only properly be defined by reference to the pleadings. Indeed that is the principal purpose of pleadings. It would introduce unnecessary and unwelcome uncertainty if claims/parts/issues were given a wide definition that did not seek to anchor them to the pleadings which the parties have exchanged.
 To take an extreme example, Mr Smith [counsel for the claimant/appellants] suggested in his oral submission that, if the claimant's solicitor introduced a possible new claim in a letter to his opponent, then that would be caught by the words of the rule, even if it had not been the subject of any formal amendment, and even if it had not been the subject of a response by the defendant. I consider that such an interpretation would lead to uncertainty and confusion; it may even encourage the abuse of the Part 36 regime.
 Accordingly, like Morgan J. [the first instance judge], I would construe the words "claim", " part of a claim" and "issue" as referring to pleaded claims, parts of claims or issues, and not other claims or issues which may have been intimated in some way but never pleaded. Once proceedings have started, the certainty required for Part 36 to operate properly can only be achieved by this interpretation. A new claim which has been intimated, but which is not part of the pleadings, is not therefore caught by r.36.2(2)(d) (current rule 36.5(1)(d).'
'The appeal concerns the requirements of a Part 36 offer. In particular, it is concerned with whether an offer is valid if it is made by a defendant in respect of both a claim and a proposed counterclaim which has yet to be pleaded , and it contains provision for interest to accrue at a particular rate after the expiry of the "Relevant period."'
'It seems to me that Hertel was primarily concerned with the effects of [then] CPR rule 36.10(2), a provision which is no longer within the CPR and, in fact, has been reversed. Furthermore, it was concerned with a defendant's offer in relation to part of a claim intended to be contained in a proposed amendment to the claim in proceedings which had already been commenced. It was in that context that Coulson LJ decided that "claim" or "part of a claim" and "issue" in what is now Rule 36.5(1)(d) meant pleaded claims. See , ,  and . No consideration was given to the effect of CPRr.36.7 in relation to a counterclaim which is to be treated as a separate claim by virtue of rrs. 20.3 and 20.3 and has yet to be commenced. In fact, r.36.7 was only addressed in the context of a submission that "claim", "part of a claim" or "issue " should not be defined too narrowly because a Part 36 offer can be made at any time, including before commencement of proceedings and, accordingly, should not be construed by reference to pleadings after commencement either. See . Not surprisingly, perhaps, that submission was rejected. As Coulson LJ stated at  "the position pre-commencement is inevitably different to that which exists after commencement of proceedings"'.
If an offer to settle which is expressed to be 'exclusive of interest' is incompatible with a Part 36 offer, is such an offer nonetheless to be treated as being inclusive of interest?
If the Appellant otherwise succeeds should the Court exercise its discretion to award the Claimant indemnity costs and/or enhanced interest?
'Once that position is appreciated [he was referring to the inapplicability of the costs regime in Part 36 and the court being asked to exercise its general discretion as to costs], however, I have the greatest difficulty in seeing how the costs regime of Part 36, whether indirectly or by analogy, can properly be invoked. [then] Rule 36.14 [now r.36.17] represents a departure from otherwise established costs practice. It imposes a deliberately swingeing costs sanction by [then] rule 36.14(3) [now 36.17(3)] on a claimant who fails to beat a defendant's Part 36 offer. That is for policy reasons, designed to encourage a sensible approach of claimants to offers and to promote settlement (that defendants do not get corresponding benefits under Part 36 may be for reasons in part explained by Simon Brown LJ in paragraph 6 of his judgment in Kiam v MGN Ltd (No.2)  1 WLR 2810). But there is no reason or justification in my view, for indirectly extending Part 36 beyond its expressed ambit. Indeed, to do so would tend to undermine the requirements of Part 36 and the repeated insistence of the courts that intended Part 36 offers should be carefully drafted so as to comply with the requirements of Part 36. As Mr Browne [counsel for the claimant/appellant] observed, Part 36 is highly prescriptive with regard to both its procedures and sanctions.'
'nor can there be any quarrel with the judge having regard to the without prejudice save as to costs offers as part of the relevant material in deciding overall whether to order indemnity costs. But, in my respectful view, it goes altogether too far to take into account as a factor that, had those offers been made under Part 36, then indemnity costs would have been payable as a matter of course. That is a course neither mandated nor permitted either under Part 36 or under rule 44.3... Perhaps there can be de minimis errors or obvious slips which mislead no one: but the general rule, in my opinion, is that for an offer to be a Part 36 offer it must strictly comply with the requirements.'
'Where an offer to settle is made, whether under Part 36 or otherwise, it should specify whether or not it is intended to be inclusive of the cost of preparation of the bill, interest and VAT. Unless the offer states otherwise it will be treated as inclusive of these.'
'PD47.para 19 implies that is it [sic, presumably 'it is'] permissible to make an offer that is stated to be exclusive of interest. When Part 47 offers were the predominant type of offer [presumably referring to the rules prior to 2013], this caused no difficulties. Indeed, such offers were the norm, because offers that were exclusive of interest were far more convenient, both for practitioners and for judges (especially in cases in which payments on account had been made). Now that Part 36 offers have taken their place, however, the situation is not so clear. [he then quotes r.36.5(4) and continues] Thus on the face of it, a Part 36 offer will be regarded as being inclusive of interest calculated to the last day of the "relevant period", that period usually being 21 days after it was made. [my emphasis]'
'In the editor's opinion – which could well be wrong – the first interpretation [viz that the offer relates only to that part of the claim which did not comprise interest] is to be preferred. This is because interest on costs is different from interest on damages in that interest on costs does not form part of the claim itself: interest on damages is pleaded as an integral part of the claim and will merge with the judgment, whereas interest on costs is judgment debt interest payable on the claim and will not merge with any judgment. Moreover PD47 paragraph 19 states that Part 36 offers regarding costs can be net of interest, which was not only the norm prior to 1st April 2013, but also by far the most sensible and least confusing way of making offers in detailed assessment proceedings. This being so, it would be surprising if CPR r.36.5(4) were to take precedence over CPR r.36.5(1)(d), in such a way as to prevent a party from making an effective Part 36 offer that is exclusive of interest. That said, it should not be forgotten that whilst it is permissible to use practice directions as an aid to interpretation of the CPR, they are, at best, only a weak aid.' [my emphasis]
i) The bill of costs would not have included interest. The bill of costs and the notice to commence the Detailed Assessment proceedings had been served well within time. No application had been, or could reasonably have been, made under r.47.8 to disallow part of the period on which Judgment Act interest would run. Interest was simply no part of what the Master would have to decide. Interest did not feature in the claim which was the detailed assessment proceedings.
ii) Accordingly, the offer of 5th March 2018 was rightly described as relating to the 'whole of the claim', that is the whole of the claim in the detailed assessment proceedings. There was no severable part of that claim which concerned interest.
iii) Interest would be payable on the costs and the costs of the detailed assessment proceedings, but that would be added automatically by virtue of the Judgments Act: it did not need to be claimed.
iv) Because of 47PD.19 it was prudent for the solicitors to specify that the offer was exclusive of interest, otherwise the effect of the Practice Direction would be that the offer would be treated as being inclusive of interest (at least until the conclusion of the relevant period).
v) But this qualification did not alter the fact that interest was no part of the claim and so the offer to settle was of the whole of the 'claim'.
vi) The qualification that the offer also excluded the costs of the detailed assessment was pure surplusage. It did not affect the validity of the offer as a Part 36 offer. If the offer was accepted, those costs would be payable by the Defendant by virtue of r.36.13(3).
vii) I note that the Practice Direction also says that (unless the contrary is indicated) the offer will be taken to include the cost of preparing the bill. That may strike those unfamiliar with the minutiae of detailed assessment proceedings as curious: it may rather be thought that the cost of preparing the bill was but one aspect of the costs of the detailed assessment proceedings themselves. However, it seems that the bill will also include the costs of preparing (and checking) the bill itself - see 47PD paragraph 5.19 which says,
'the bill of costs must not contain any claims in respect of costs or court fees which relate solely the detailed assessment proceedings other than costs claimed for preparing and checking the bill' [my emphasis]
viii) The Appellant does not suggest that the offer otherwise failed to satisfy the requirements of Part 36.
ix) The validity of the offer as a Part 36 offer was not affected by the inclusion of the words 'exclusive of interest'.
i) The language of r.36.5(1) is in marked contrast to that of r.36.5(4). Rule 36.5(1) is mandatory: in order to be a Part 36 offer it 'must' contain the four listed requirements. Rule 36.5(4) by contrast is framed as 'A Part 36 offer which offers to pay or offers to accept a sum of money will be treated as inclusive of interest'
ii) That contrast is mirrored elsewhere in Part 36. Thus r.36.5(3) says,
'In appropriate cases a Part 36 offer must contain such further information as is required by r.36.18 (personal injury claims for future pecuniary loss), rule 36.19 (offer to settle a claim for provisional damages) and rule 36.22 (deduction of benefits.' [my emphasis]
Each of those rules makes clear which of their requirements are mandatory by also using the term 'must'.
iii) I did not find persuasive Mr Carpenter's argument that an offer which excluded interest could not be a valid Part 36 offer because it would not then be made 'in accordance with rule 36.5' as r.36.2(2) requires. I read that as simply a drafting device for cross-referring to rule 36.5. It leaves to rule 36.5 to determine which requirement is mandatory.
iv) I did not find the historical development of Part 36 to be particularly helpful in interpreting the current version. There clearly have been some very significant changes, but their substantial nature only serves to emphasise the importance of focussing on their present form. I, of course, recognise that there has not, since 2007, been a dispensing power to treat a non-compatible offer as a Part 36 offer. The requirements are strict, but that proposition does not help much in deciding whether an offer may be made in relation to a principal sum (exclusive of interest).
v) A defendant's Part 36 offer must be expressed as a single sum, but there are other differences in Part 36 between offers by defendants and offers by claimants. Besides, the offer by Fieldfisher was expressed as a single sum. If, as I am currently considering, that was a sum for only part of the claim, it did express what sum the claimant would accept for that part.
vi) I see nothing in the claimant's offer which was incompatible with the scheme of Part 36, as had been the case with some of the authorities cited by Mr Carpenter.
vii) If this offer was to be treated as relating to part of the claim, I recognise that, on acceptance, the claimant would not have automatically been entitled to her costs, but would have to either obtain the defendant's agreement to this or seek an order from the court. But that is sensible, if (as I am currently assuming) interest is a severable part of the claim.
viii) On this same assumption, I do not accept that the court would lack jurisdiction to determine interest. Where an offer in relation to part of the claim is accepted, the claim is stayed as to that part. The claim is not stayed as to the part of the claim to which the offer did not relate.
ix) Rule 36.5(1)(d) says that the offer must state whether it relates to the whole or to part of the claim. As I have explained, my view is that it did relate to the whole of the claim. Nonetheless, I am examining here the position if the true interpretation of the offer was that it did relate to only part of the claim. Ex hypothesi r.36.5(1)(d) is satisfied. Put another way, if it did not relate to the whole of the claim, that was only because it was qualified so as to exclude interest.
Note 1 As I explain below, the costs of preparing and checking the bill of costs itself are treated as part of the costs of the action, rather than as part of the costs of the detailed assessment. [Back]
Note 1 As I explain below, the costs of preparing and checking the bill of costs itself are treated as part of the costs of the action, rather than as part of the costs of the detailed assessment. [Back]