Terence Joseph Arch v Payne Dean (SCCO)

The claimant accepted the defendant’s insurers’ Part 36 settlement offer, and sought costs on the standard basis.

We argued that according to the wording of the settlement offer, costs were agreed to be under section 2 of Part 45 CPR (fixed recoverable costs). 

Costs Officer Martin said that as far as he was concerned this was a straightforward case of offer and acceptance, and on that basis, he found that costs were limited to the fixed recoverable costs.

It is important to note that this case pre-dates the Court of Appeal decision of Solomon v Cromwell which reinforces the position.

This case arose from a road traffic accident claim.  Liability had been admitted but the claim went on for quite some time because the claimant’s symptoms were slow to settle.  When the medical evidence was complete, the claimant’s solicitors sent a letter demanding an offer within 21 days.

They chased after 14 days and sent the proceedings to court for issue on the 21st day.  The day after, they received an offer from the defendant’s insurers and subsequently took their client’s instructions on it and accepted it.

At detailed assessment, our costs advocate raised two preliminary points: the first was that proceedings had been prematurely issued, and the second was that there was a contract between the parties to accept predictable costs.  He referred to the defendant’s Part 36 offer letter and pointed out the important sentence which was:-

“If this offer is accepted within 21 days of receipt of this communication I will also pay your costs in accordance with section 2 of Part 45 CPR 1998 (fixed recoverable costs in road traffic cases).” Accordingly, there was an agreement between the parties and the claimant could not now recover more than the fixed recoverable costs amount.

In response, the claimant’s representative emphasised that the claim was not issued until 16 months after the accident.  In respect of the argument that there was a concluded agreement, he said that there was an offer and acceptance of a Part 36 offer which gave rise to an order for costs on the standard basis. He said the parties were not of one mind about the application of predictive costs and there was no specific agreement about which costs regime to apply.

We submitted that although the letter was headed Part 36 offer it was not in fact a Part 36 offer for the purpose of the rules, because it contained a different prevision as to costs, despite the fact that it might have been intended to be a Part 36 offer.

Costs Officer Martin said that as far as he was concerned this was a straightforward case of offer and acceptance. The offer was clear, the claimant’s solicitors had accepted it, and now they were burdened with it.  He said that the claimant’s solicitors ought to have known what it was that they were accepting and as to the argument that the Part 36 over ruled the usual position, he said that there must be doubt as to whether it was a proper Part 36 offer. He said it was still a matter of offer and acceptance.

He did not accept our argument on premature proceedings however, on the basis of the contractual point, he found that costs were limited to the fixed recoverable costs amount.

It is important to note that this case pre-dates the Court of Appeal decision of Solomon v Cromwell which reinforces the position.

In the circumstances, the bill was assessed at £3733.75.  In terms of the costs of the assessment, we were awarded the costs from the point of service of our supplemental Points of Dispute, assessed in the sum of £1250.00.