Baron v Housmans Bookshop Ltd

The court’s general discretion as to costs under Part 44 of the Civil Procedure Rules 1998 is not fettered merely because a party made an informal offer which could have been made under Part 36. A Part 36 offer is one factor among several relevant considerations. The court may nevertheless attach substantial weight to an informal settlement offer where, in the circumstances, it considers that the offer should have brought the proceedings to an end.

The claimant obtained a jury verdict of £14 in a libel action against the defendant bookshop. The High Court judge ordered that the claimant recover no costs up to 5 pm on 20 June 2002 and that the defendant receive its costs thereafter, reflecting a settlement offer of £1,500 damages and £1,000 costs made shortly before trial.

The claimant sought permission to appeal, arguing that the judge had wrongly treated the informal offer as equivalent to a Part 36 offer. The central issue was whether the judge’s costs discretion was legally constrained because the offer was not made under Part 36.

1. Application refused. The judge was entitled to make the costs order on the facts of the case.
2. In Amber v Stacey [2001] 2 All ER 88, the court held that an informal offer should not, in the circumstances of that case, be treated as producing the same costs consequences as a payment into court or a Part 36 offer. The significant qualification was the phrase referring to those circumstances.
3. Part 44(3), (4) and (5) of the Civil Procedure Rules 1998 confer a general discretion as to costs. That discretion is not fettered where no Part 36 offer was made, even though such an offer could have been made. The existence or absence of a Part 36 offer is only one consideration among the matters the court must weigh.
4. On the particular facts, Morland J was entitled to conclude that the defendants’ solicitors’ offer should have brought the libel proceedings to a prompt end. The nominal damages, the nature of the claim, and the manner in which it had been pursued supported the order made.

Lawrence Collins J agreed with Latham LJ. The order was that the application for permission to appeal was refused.

• Court of Appeal (Civil Division): refused permission to appeal from the costs order made by Morland J on 2 July 2002.
• High Court, Queen’s Bench Division: after a two-day libel trial resulting in a verdict of £14, ordered that the claimant receive no costs after 5 pm on 20 June 2002 and that the defendants recover their subsequent costs on the standard basis.