Bent v Highways and Utilities Construction & Anor

In deciding costs after an appeal, the court must assess the parties’ position in the light of the proceedings as a whole and subsequent events. Success on an intermediate issue does not necessarily make a party the overall winner. A claimant’s Part 36 offer attracts enhanced costs and interest consequences where the judgment is at least as advantageous as the offer, unless applying those consequences would be unjust in all the circumstances. The court may consider the parties’ experience, the information available to the offeree, the risk of substantial recovery and the litigation that acceptance would have avoided. Interest on money to be repaid may be fixed at a proper commercial rate rather than automatically at the Judgments Act rate.

This was a further judgment following the Court of Appeal’s earlier decisions in the same proceedings. The first appeal, [2010] EWCA Civ 292, resulted in the county court judgment being set aside and a retrial being ordered on the recoverable basic hire rate. The later appeal, [2011] EWCA Civ 1384, produced a recovery for Mr Bent exceeding his rejected Part 36 offer, although he had to repay £7,687.09 plus interest.

The parties agreed responsibility for the county court costs, retrial costs, present appeal costs and a payment on account. The outstanding issues were the costs of the first appeal and the consequences of the claimant’s Part 36 offer dated 2 February 2009.

1. Costs of the first appeal. Costs had to be determined in the light of subsequent events and the parties’ overall position. Although the respondents had succeeded in obtaining a retrial on the basic hire rate issue, Mr Bent was the overall winner. The respondents were therefore ordered to pay 50% of his costs of the first appeal on the standard basis.
2. Part 36 offer. The judgment was more advantageous to Mr Bent than his offer, so Part 36.14(3)(b) and (c) applied unless that would be unjust. Applying those provisions was not unjust. The respondents were experienced litigants and had sufficient information to evaluate the offer; acceptance would have avoided expensive litigation.
3. Consequences. County court costs up to 23 February 2009 were payable on the standard basis and costs thereafter on the indemnity basis. Interest on disbursements was fixed at 1% above base rate, interest on county court costs at 5% above base rate, and enhanced interest on damages at 5.5% between 24 February 2009 and payment on 23 July 2009.
4. Repayment interest. Interest on the £7,687.09 repayment was fixed at base rate plus 1%, rather than the 8% Judgments Act rate, because that was the proper commercial rate.
5. Questions concerning Judgments Act interest and detailed assessment were delegated to the Costs Judge, with assessment issues listed together in the Senior Courts Costs Office.

• Court of Appeal (Civil Division): In [2010] EWCA Civ 292, the court set aside the county court judgment and ordered a retrial on the recoverable basic hire rate.
• Court of Appeal (Civil Division): In [2011] EWCA Civ 1384, the court determined the later substantive appeal and left consequential costs questions for subsequent determination.
• Court of Appeal (Civil Division): The present judgment resolved the outstanding costs and Part 36 issues.