TRUSTEES OF STOKE PENSION FUND -v- WESTERN POWER DISTRIBUTION

This Court of Appeal case concentrated on Part 36 offers, and the effect and costs implications of written offers to settle claims made pursuant to that part. The Defendant had made an offer to settle the claim, which was stated as being open for 21 days. Upon expiry of that timeframe, the offer was withdrawn. At trial, the Claimant failed to beat the offer, although the written offer was not deemed to give the Defendant any protection as it had not been supported by a payment on account. On appeal, this was overturned, and it was held that a written offer which is clear and which satisfies the guidelines laid out in Part 36 should carry the same weight as a payment into Court, and should offer the same protection to a paying party. The offer must be clear if the paying party is to seek any protection from it, however, and it must satisfy CPR Part 36.5. The withdrawal of the offer in this particular case was not found to have any effect on the terms and implications of the offer in light of the Claimant’s conduct, as they had acted unreasonably in failing to accept a clear and genuine offer.

AMBER -v- STACEY

This was an appeal by the Claimant against a costs order made, whereby it was ordered that the claimant pay the entire costs of the action notwithstanding that he had succeeded in obtaining a monetary judgment against the defendant. In August 1997 the claimant carried out building works for the defendant for which no price had been agreed. In early September 1997 the claimant submitted an invoice in the sum of £7,579.86. The claimant commenced proceedings for the recovery of that sum on 24 September 1997. On 1 October 1997 the defendant's solicitors made a written offer to settle the claim for £4,000 plus VAT together with the court fee and solicitor's costs on the summons. That offer was refused. By 20 January 1999 the defendant had paid £3,000 into court pursuant to CPR Part 36. At trial in April 1999 the claimant succeeded only to the extent of obtaining judgment for £2,321.16 inclusive of interest. The Recorder ordered that the claimant pay the defendant's costs from the date of payment into court and further, from the date of the written offer. The Recorder had erred in regarding the written offer of settlement as the equivalent of a Part 36 payment. There were compelling reasons of principle and policy why those prepared to make genuine offers of monetary settlement should do so by way of Part 36 payments rather than written offers. Part 36 payments offered greater clarity and certainty about: the genuineness, the ability to pay, whether the offer was open or without prejudice, and the terms on which the dispute could be settled. It followed that the Recorder had erred in principle in ordering the claimant to pay the whole of the defendant's costs from the date of the written offer to the date of payment into court. However, the fact of the written offer was a relevant factor in respect of the Recorder's wide general discretion as to costs under CPR 44.3. Given the Recorder's conclusions as to the unreasonableness of the claimant's conduct in relation to the proceedings, an order that the claimant pay half the defendant's costs from the date of the written offer to the date of payment into court was appropriate.