Costs consequences of late acceptance of a Part 36 offer in EL/PL and RTA claims
These two appeals concerned the fixed costs regime which applies to low value road traffic accident claims and employers' liability/public liability claims. In both cases, the defendant accepted the claimant's Part 36 offer, but outside of the 21 day period for acceptance.
Where a Part 36 offer is accepted within the 21 day period, costs are governed by the fixed costs regime. Conversely, where the claimant beats its own Part 36 offer at trial, he/she is entitled to indemnity costs from the date that the offer became effective.
The Court of Appeal has now held that in cases "in the middle", ie where the claimant's Part 36 offer is accepted, but accepted late, the case remains within the fixed costs regime and the claimant cannot recover standard or indemnity costs instead.
One further point raised by one of the appeals was the construction of a letter sent by the claimant accepting the defendant's Part 36 offer. The claimant had later sought to argue that that had been a counter-offer rather than an acceptance, because of a reference to indemnity costs, when the defendant had not referred to the basis on which costs were to be assessed in its offer.
The Court of Appeal confirmed that it would be "wrong in principle to construe a letter which confirms "that my client has agreed to accept your Part 36 offer" as anything other than an unqualified acceptance. It would also be wrong, in claims of this sort, to complicate the process of offer and acceptance under Part 36, and to subject that process to convoluted legal arguments as to contract formation and the like".