Whether court can make an issues-based costs order where claimant beat its Part 36 offer


The claimant made a Part 36 offer covering her entire claim. It was rejected but she went on to beat it at trial. However, she lost on one issue. The defendant therefore argued that it was entitled to an issues-based (or proportionate) costs order. The claimant countered that it is not possible to make an issues-based costs order where a Part 36 offer has been bettered because Part 36 is a self-contained regime and costs have to be considered in the context of that regime and not the regime created by Part 44.

Saffman HHJ held that, leaving aside the Part 36 offer, an issues-based costs order would have been appropriate in this case (the issue on which the claimant had failed having been a separate, self-contained and discrete claim). The judge went on to consider the effect of the Part 36 offer on that position. He held that the fact that there has been a successful Part 36 offer does not mean that the court is unable to make an issues-based order: "I accept that Part 36 is a self-contained regime and that the Rule itself makes no reference to such orders - in distinction to Part 44.2. Nevertheless, in so far as such an order is necessary to avoid injustice it is in my view permissible for the court to make it".  Accordingly, the claimant would be entitled to only a percentage of her costs under Part 36.