Whether claimant entitled to additional percentage on damages under Part 36 on a detailed assessment of costs

http://www.bailii.org/ew/cases/EWHC/QB/2015/1312.html

For Part 36 offers made on or after 1 April 2013, CPR r36.14(3)(d) introduced an additional 10% uplift on all damages where a defendant rejects a claimant's offer and then fails to equal or beat it (subject to a cap of £75,000).

In this case, the claimant had made a Part 36 offer as to costs after the case settled, which had been rejected and he had gone on to beat the offer. A costs master refused to order the additional amount on a detailed assessment of costs, holding that costs have to be treated slightly differently from the damages when considering CPR r36.14(3)(d).

The appeal from that finding has now been allowed. It was held that the starting point should be that a claimant is entitled to the extra amount under CPR r36.14(3)(d) unless that would be unjust. In this case the Master had said it would be unjust to order that extra amount because there had been a significant reduction to the Claimant's bill of costs. That approach was said to penalise the claimant for making what turned out to be a reasonable Part 36 offer: "It is the terms of the Part 36 offer not the level of the sums claimed in the bill of costs which are to be considered under CPR r36.14(4). Whilst all the relevant circumstances are to be considered in deciding whether it would be unjust to make an award under any of the paragraphs of CPR 36.14(3), it was not suggested that there was any particular feature or consequence of the bill of costs other than its size which would render the making of an order under CPR r36.14(3)(d) unjust".

The judge also cautioned against the "temptation" to refuse the extra amount under CPRr36.14(3)(d) "not because he considered the making of such an award unjust but because he thought it unjust to make an award of the required amount, 10% of the assessed costs".

COMMENT: After an apparent initial reluctance to order the 10% uplift, the courts now seem increasingly prepared to do so. This case is noteworthy in that it makes clear that the court must consider any additional amount under CPR r36.14(3)(d) unjust in order to refuse the uplift - it will not be sufficient to consider the percentage alone unjust.