Udogaranya v Nwagw [2010] EWHC 90816 (Costs)

The Defendant had made a pre-action Part 36 offer, which was accepted by the Claimant. This offer made no express reference to pre-action costs. As a result of the Claimant’s acceptance, no proceedings were commenced.

The effects and costs consequences of the acceptance of a Part 36 offer are set out in CPR 36.10 and 36.11. These are based on the assumption that proceedings had already been commenced when the offer was made. In the past, therefore, it has been uncertain whether the costs consequences of accepting a Part 36 offer will follow where a pre-action offer is accepted.

In this case it was held that if, following the acceptance of a Part 36 offer, liability for preaction costs are to be determined under Part 36, then the offer must specifically refer to liability for these costs.