Kunaka v Barclays Bank Plc

Where a Part 36 offer is accepted after the relevant period, the default costs consequences in Part 36.10(5) apply unless the court orders otherwise. The discretion to depart from that default is to be exercised by reference to fairness in the particular circumstances.

An exceptional circumstance may arise where an unrepresented litigant is reminded that an offer remains open but is not alerted to the adverse costs consequences of late acceptance. The resulting order need not give that litigant all costs sought; it may instead disapply liability for the offeror’s post-expiry costs and make no order as to costs thereafter.

The claimant’s appeal from a decision of District Judge Weintroub in Bournemouth County Court was settled shortly before the Court of Appeal hearing. Barclays had made a £35,000 Part 36 offer on 15 March 2010. The offer was accepted on 13 July 2010, after expiry of its relevant period.

The parties disagreed about costs. Barclays contended that the default consequence was that the claimant bore the bank’s costs from 6 April. The claimant relied on the bank’s 6 July email stating that the offer remained open for acceptance. The central issue was whether the court should make an order otherwise under Part 36.10(5) of the Civil Procedure Rules.

1. Application granted. Longmore LJ, with whom Wilson LJ and Sir John Chadwick agreed, held that this was an exceptional case in which the court should depart from the default costs position under Part 36.10(5) of the Civil Procedure Rules.
2. Part 36 is a self-contained and rigid procedural code. Its consequences do not depend on ordinary common-law rules of offer and acceptance. Acceptance after the relevant period ordinarily entitled the claimant to costs only to the expiry date and made him liable for the bank’s costs thereafter, unless the court ordered otherwise.
3. The court’s discretion required an assessment of fairness. The claimant was a litigant in person. The bank was entitled to remind him that its offer remained open, but its email did not explain that late acceptance would expose him to the bank’s costs from 6 April. In those circumstances, it would be unfair to impose the full default consequences upon him.
4. The claimant was not entitled to costs to 6 July, or for a further 21 days after that email. The appropriate tailored order was that he recover his appeal costs up to and including 6 April, with no order as to appeal costs thereafter. It was agreed separately that he should recover the costs below, including pre-litigation costs, on the standard basis, subject to detailed assessment if not agreed.

• Court of Appeal (Civil Division) In [2010] EWCA Civ 1035, the substantive appeal was settled. The court granted the consequential costs application and made an order otherwise under Part 36.10(5) of the Civil Procedure Rules.
• Bournemouth County Court The claimant had appealed from the decision of District Judge Weintroub. No citation or disposition of that decision is stated in the judgment.