Huntley v Simmonds (Costs)

A non-compliant Part 36 offer may nevertheless receive the intended costs consequences where its defects are purely technical, caused no real uncertainty or prejudice, and the court considers it just to exercise its discretion under CPR 44.3(4)(c). A missing formal statement concerning continuity of payment meant that the offer did not comply strictly with CPR 36.5(4). The court could still treat it as Part 36-compliant for costs purposes. The consequence remained discretionary, unlike the strong presumption applying to a formally compliant offer.

The judgment concerned the costs consequences of a defendant’s settlement offer following an assessment of damages. The claimant failed to obtain an award more advantageous than the defendant’s offer of 16 October 2008, which included a lump sum and periodical payments.

The claimant argued that the offer failed to comply with CPR 36.5(4), because it did not specify the duration of the periodical payments, identify the relevant ASHE centile, or contain the required statement concerning continuity of payment. The central issue was whether the court should nevertheless exercise its discretion under CPR 44.3(4)(c) to impose the costs consequences that would have followed from a compliant Part 36 offer.

1. The claimant had not obtained a more advantageous award than the defendant’s offer of 16 October 2008. The offer therefore fell within the substance of CPR 36.14(2), subject to its compliance with Part 36.
2. The offer did not formally comply with CPR 36.5(4), because it omitted the statement required by paragraph 4(d) concerning continuity of payment. The judge was inclined to regard the omissions concerning the duration of the periodical payments and the ASHE centile as capable of construction in the context of the correspondence.
3. Under CPR 44.3(4)(c), the court could provide for the same costs consequences as if the offer had been Part 36-compliant. The defects were technical and caused no real uncertainty or prejudice. The claimant’s advisers had understood the offer and had raised no concern about its terms or payment security.
4. The discretion did not undermine the purpose of the rules. A party making a non-compliant offer remained in a worse position because it could not rely on the strong presumption that the CPR 36.14 consequences would apply. The decisions in Mitchell v James and Hertsmere Primary Care Trust v Estate of Rabindra-Anandh reinforced the view that such an approach was permissible, although their reliance on the former wording of CPR 36.1(2) meant that they were not directly applicable.
5. The defendant was awarded its costs from 7 November 2008. The date was postponed by one day from the ordinary 21-day date to allow for formal confirmation of the omitted matters.