Jordan v MGN Ltd concerned the question of whether the court should deviate from the normal costs rule with regards to the late acceptance of a part 36 offer. The normal rule requires the offeree to pay the offeror's costs from the expiry of the relevant period (i.e. since the last date on which they could have accepted the offer (CPR 39.10(5)(b)))

Late acceptance

This was a phone hacking case, involving Mr Jordan of Formula 1 fame (the claimant) who sued MGN (the defendant). Mr Jordan sought £150,000 damages. Over a period of two and a half years a number of settlement offers were made which were either refused or ignored by the claimant. In the final months before trial the parties discussed an offer of £90,000 however, no offer was accepted. Following a last minute application by the claimant it was agreed that the defendant's first offer of £15,000, made on 24 September 2014, should be accepted, two and a half years late.

Claimant's request

The claimant asked that the court depart from the normal costs rule and grant them their costs since the expiry of the relevant period. This was on the basis that he claimed that the parties had reached an agreement regarding damages of £90,000 and so any trial would have been an abuse of process given that the dispute only involved costs. The court rejected this argument noting that no agreement as to damages had actually been reached.

Decision

Instead, the Court refused to deviate from the ordinary costs rule and ordered that the claimant pay the defendant's costs, on an indemnity basis, for the period after expiry of the relevant period. The court said that the claimant was to blame for both parties incurring further costs after the defendant made the offer of £15,000 in September 2014. He had responded poorly to settlement negotiations throughout 2016 where proper engagement would likely have resulted in a more successful outcome for the claimant. He had the benefit of a conditional fee agreement with his lawyers, and after the event insurance. The judge believed that this had contributed to his lack of interest during negotiations, a stance of which it disapproved, saying that a claimant without insurance and who bore a personal risk in relation to lawyers' fees would not have acted in the same way.

Exceptional grounds are required to persuade the Court to make an alternative costs order in the event of late acceptance of a Part 36 offer. Claimants should ensure they participate as fully as possible in settlement negotiations, even where conditional fee agreements and after the event insurance reduce their personal costs risk.