This action was brought by Martyn Jones MP against the Mail on Sunday, part of the Associated Newspapers Group, for alleging that on 10 May 2006 he had sworn at a security guard who asked for his Parliamentary pass.
At trial, the jury awarded Mr Jones £5,000 in damages, however, 11 months previously Mr Jones's solicitors had approached the newspaper with an offer to settlement if it paid £4,999 in damages and published an apology. The offer was made under Part 36 CPR, which is designed to encourage parties to accept offers of settlement with costs consequences for failing to accept such offers.
Normally if a claimant wins, he would expect to have his assessed costs paid by the defendant. On the standard basis only about 60% of true legal costs would be awarded as the assessment only looks at costs proportionate to the matters in issue. The new CPR 36.14 allows for an award of costs on the indemnity basis, this assessment typically gives higher percentage awards. The rule applies where a claimant obtains an award at trial more or at least as advantageous as the offer to settle made to, but rejected by, the defendant.
Following his victory Mr Jones asked the Court for his costs award to be on an indemnity basis on the grounds that he had obtained an award £1 more than the Part 36 offer previously made to the newspaper.
The Court refused to make the order allowing his claim for costs on the standard basis. It considered that it had to make a decision based on what was just on the particular facts before it: what was the value of the offer made as compared with the award that the jury actually made 11 months later?
wo principle factors emerged:
- the jury would have made its award taking into account the Mr Jones stress leading up to the trial. This stress was not present at the time the offer was made. In that light the financial worth of the award was less the jury when accounting for this additional stress had only made an award of £1 more than the offer he had made.
- additionally, many other aspects of this case had been brought to light during the 11 months over and above those matters for which an apology had been requested, putting Mr Jones in further bad light. His early demand for an apology had not therefore extended to these other issues.
The concern raised by this ruling is that despite Part 36 being designed to encourage parties to make tactical offers with a view to settlement, any subsequent success in courts will be measured against a level of stress and suffering that can only be factored in after the Part 36 offer is made as the case progresses. This may influence the levels at which Part 36 offers are made and of course will be a critical factor in accepting or declining the same.