Late acceptance by defendant of Part 36 offer
This concerns the correct approach where a defendant accepts a claimant’s Part 36 offer after expiry of the 21 day period. Many claimants have argued that the claimant should be entitled to recover indemnity costs from the expiry of the relevant period, just as they would if the case had gone to trial and the same result had been achieved. This argument has been particularly attractive to claimants where fixed costs apply, as an order for indemnity costs will allow the claimant to recover more than fixed costs.
The Court of Appeal has now decided in that there is no presumption in favour of indemnity costs on late acceptance of a claimant’s Part 36 offer; and (b) that where this occurs in fixed costs cases the recoverable costs are those defined by section IIIA of Part 45, and the general jurisdiction as to costs in CPR36.13 has no role to play, meaning there is no place for assessed costs.
The only way out of the fixed costs regime in such a case is to argue under Part 45.29J that there are exceptional circumstances making it appropriate for the Claimant to recover more than fixed costs. The judge was, however clear that late acceptance of a Part 36 offer should not create a presumption that exceptional circumstances were present: A long delay with no explanation may well be sufficient to trigger r.45.29J; a short delay with a reasonable explanation will not.