Hammersmatch Properties (Welwyn) Ltd v Saint- Gobain Ceramics and Plastics Ltd & Anr

[2013] EWHC 1161 (TCC)

Here, Saint-Gobain made a Part 36 offer, which was very near to but still below the sum which the Judge awarded to Hammersmatch. There was no question that this was a case where there had been an unreasonable refusal to negotiate by Hammersmatch. There had been an unsuccessful mediation. Further, the Judge did not consider that he should enter into speculation as to what might, or should have happened as a result of negotiations. This remained a case where Saint-Gobain failed by a small margin to make a Part 36 offer which provided it with the costs protection it was seeking. The fact that it was only a small margin was irrelevant. What was relevant was that the Part 36 offer was too low.

That said, the Judge then went on to assess the costs by reference to the other factors set out in CPR 44.2(4)(a) and (b). He considered that significant costs were spent in relation to issues raised by Hammersmatch which failed. In addition there was a small element of costs which should properly be awarded in favour of Saint-Gobain in relation to its success on certain other issues. Therefore taking account of all the circumstances, the Judge considered that the appropriate order for costs was one which reduced, by a percentage, the order for costs in favour of Hammersmatch. The order should reflect a reduction to take account of the costs expended by Hammersmatch on the relevant matters as well as the impact of an order in favour of Saint- Gobain. Hence the Judge concluded that Saint-Gobain should pay Hammersmatch 80% of its costs to be assessed on a standard basis, if not agreed.