Notice of funding arrangements

The court gave the claimants relief from sanction where they were several months late serving notice of a CFA and ATE policy in breach of CPR 44.15(2). Although the breach was serious, it had not prejudiced the defendants nor other litigants. The judge refused to give any weight to the possibility that pre-2013 funding arrangements are not legitimate, an issue presently before the Supreme Court in Coventry v Lawrence No 2 (Caliendo v Mishcon De Reya (A Firm)). 

Claimants’ Part 36 offers

Where the claim includes a money claim and the claimant beats its Part 36 offer at trial, the additional amount under CPR 36.14(3)(d)(i) should be calculated as a percentage of the basic monetary award, and should not be applied to any award of interest (Watchorn v Jupiter Industries Ltd). 

Without prejudice rule

Communications made when there was no dispute between the parties cannot be made without prejudice. The fact that an experienced litigation lawyer marks correspondence “without prejudice” in those circumstances is not conclusive and the court will conclude that the lawyer was mistaken if it is satisfied that there was no dispute at the time (Avonwick Holdings Ltd v Webinvest Ltd – see briefing here [add hyperlink]). 

Refusal to mediate

Even though the defendant reasonably believed its case to be strong and the dispute concerned the meaning of a contractual term, its refusal to mediate was still unreasonable. There were reasonable prospects that mediation could have resolved the dispute and the costs of mediating would not have been disproportionately high. However, since the claimant should have accepted the defendant’s Calderbank offer, it was not appropriate to penalise the defendant in costs for its failure to mediate (Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C41l) Ltd (No 2)).

Proportionality and indemnity costs

When assessing costs on the indemnity basis, it is not appropriate to take the receiving party’s costs budget, approved by a costs management order, as the starting point despite comments to this effect in Elvanite Full Circle Ltd v AMEC Earth & Environment (UK) Ltd. Proportionality has no role in the assessment of indemnity costs whereas costs management orders are designed to set out the probable limits of the costs that will be proportionately incurred (Kellie v Wheatley & Lloyd Architects Ltd).