Huck v Robson

For a Part 36 offer to justify indemnity costs, the court must consider whether the result is more advantageous than the offer and whether such an order is just. The court may take account of the offer’s terms and the circumstances identified in Part 36.21(5). In an unquantified damages claim, an offer requiring the claimant to accept a small percentage of liability may be viewed as an unrealistic or sham attempt to settle. That assessment falls within the trial judge’s discretion. A proposed appeal concerning the distinction between standard and indemnity costs will not necessarily arise from, or affect, the separate question whether the offer was a genuine attempt to settle.

The claimant succeeded on liability after a collision between two cars on a narrow lane. The defendant had made a Part 36 offer on the basis that the claimant accept 5 per cent responsibility. The trial judge regarded the offer as little more than a sham and awarded costs on the usual basis rather than indemnity costs.

The claimant renewed an oral application for permission to appeal. The Court of Appeal considered both the prospects of success and the wider difficulty practitioners were experiencing in applying the Part 36 provisions.

1. Permission granted. The renewed application was allowed and the appeal was directed to be listed before three Lord Justices.
2. In an unquantified damages claim, an offer requiring acceptance of 95, 96, 97, or even 99.9 per cent liability may be regarded as entirely unrealistic. The trial judge was entitled to regard the defendant’s offer as not being a genuine attempt to settle the action.
3. Part 36.21 requires indemnity costs where the offeror obtains a result more advantageous than the offer, subject to the court having regard to the justice of making that order and to the matters in rule 36.21(5), including the terms of the offer. The judge therefore had discretion to refuse indemnity costs and award costs on the usual basis.
4. McPhilemy v Times Newspapers Ltd & others concerned a judge’s misapprehension of the nature of indemnity costs. It did not bear on the distinct issue raised by this proposed appeal.
5. The court’s decision concerned permission only. The substantive appeal remained to be heard.

• Court of Appeal (Civil Division): The renewed oral application for permission to appeal was allowed. The appeal was ordered to be listed before three Lord Justices.
• Whitehaven County Court: His Honour Deputy Judge Townend found for the claimant on liability, rejected any contributory blame, and awarded costs on the usual basis rather than indemnity costs.