Jolly v Harsco Infrastructure Services Ltd

Part 36 is a self-contained and prescriptive procedural code. A party seeking its specific costs consequences must comply with the rules governing the offer, acceptance and resulting procedure. Where a Part 36 offer concerning liability is accepted after the relevant period but before withdrawal, the applicable provisions are the costs and stay provisions governing late acceptance. Acceptance does not itself give the court power to enter judgment for the agreed apportionment of liability, particularly where the defendant has not consented to judgment. The appropriate course is to stay the relevant issue on the terms of the offer and determine costs under the applicable Part 36 provisions or the general costs discretion.

The claimant, acting as widow and executrix of the estate of Stephen Jolly, brought a fatal asbestos-related injury claim against the defendant. Liability was disputed and the claim proceeded towards a split trial on liability.

The claimant made a Part 36 offer to settle liability on a 99 per cent basis in her favour. The defendant accepted it after expiry of the relevant 21-day period but before withdrawal. The parties disagreed whether the court should enter judgment for damages to be assessed, thereby engaging the enhanced costs consequences under Civil Procedure Rules 1998, rule 36.14, or make a consent order under rules 36.10 and 36.11.

1. The application to enter judgment was refused. The defendant’s late acceptance compromised the issue of liability, but did not amount to consent to judgment being entered.
2. Gibbon v Manchester City Council [2010] EWCA Civ 726; [2010] 1 WLR 2081 established that Part 36 operates as a self-contained code. Parties may settle by other means, but those seeking Part 36’s particular costs and other consequences must comply with its prescriptive requirements.
3. Because the offer was accepted after the relevant period and before withdrawal, the applicable regime was rules 36.10 and 36.11. Rule 36.10(5) provided the relevant framework for costs following late acceptance. Rule 36.11 required the action to be stayed, while preserving the court’s power to deal with costs.
4. Rule 36.14, which concerns costs consequences following judgment, was not applicable. The change from the former wording referring to matters occurring at trial did not create a power to enter judgment where Part 36 contained no such power and the defendant had not consented to judgment.
5. The appropriate order was to stay the liability issue on the terms of the claimant’s offer. Costs relating to that issue, including the basis of assessment, were postponed for determination under rule 36.10(4) and (5), or under the general discretion in rule 44.3.

First-instance decision. No earlier judgment or appeal decision is stated in the judgment.