Legal Cost Specialists

Carver v BAA – Winning at any cost?

A recent comment on a LinkedIn discussion forum raised the issue of whether the proposed changes to the Part 36 rules and the formal reversal of Carver v BAA were sensible.

The proposed changes will make clear that where a money offer is beaten at trial, by however small a margin, the costs sanctions applicable under CPR 36 will apply.

It will be remembered that this was one of Lord Justice Jackson’s main proposals.

But wait a moment. LJ Jackson also believes that recoverable costs should be limited to what is proportionate to the amounts at stake. Surely this should apply equally when there is an offer on the table. In the case of Carver, even if we accept that a claimant who beats a defendant’s offer by £51 has achieved a more advantageous outcome, surely the question should still be asked as to whether the further costs incurred to recover the extra £51 are proportionate.

What additional costs would be proportionate to throw at a case to get an extra £51?

4 thoughts on “Carver v BAA – Winning at any cost?”

  1. It appears to me that what Jackson and these changes to P36 are saying is that it IS reasonable to throw thousands of pounds at a claim just to recover the £51.00 or in some cases what might be as little as £0.01 and still get your costs.

    Surely this is a step in the wrong direction.

  2. (C) Robert Pettitt

    I can see where this is going.

    The courts want to tighten up compliance with the pre-action protocol, induce early settlement and encourage cooperation between the parties (the aims of the pre-existing system).

    Claimant’s will need to offer under what is reasonable in order to try and get indemnity costs orders (thus obviating proportionality) and defendant’s will need to make offers that are a touch higher than their reasonable expectation.

    If the courts do not give reasonable effect to the reverse of Carver (and I think they will) when dealing with costs, then the reversal has no impact.

    You have to also taken into the +10% increase of damages if a defendant offer is beaten at trial. It is not clear how this will impact on proportionality. Will the +10% be taken into account?

  3. The problem is – that £51 does not properly show what each side’s solicitors expected the judgment to be.

    If the Defendant has made an offer under Part 36 he expects the Court to award significantly lower so it actually provides protection and already incorporates a margin for error / claimant friendly judge / witnesses being witnesses etc.

    If the Claimant rejects that offer it is because he expects to recover significantly more, and certainly more than a couple of hundred quid.

    If either party thought an extra £51 (or £25.50 split) would settle the matter then a single phone call should resolve it.

    The example of £51 or even £500 does not show the reality of the advice each party has been given by their representatives.

    Perhaps the trial judge should be allowed to see that advice and give a judgment that penalises the solicitor rather than the client if the solicitor’s valuation was unacceptably inaccurate. Perhaps that after the offer was rejected there is no costs Order either way (it has been beaten after all) but that the claimant’s solicitor cannot charge the client for the inaccurate advice (an onwards) that led to it.

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