Webb Resolutions Ltd v Waller Needham & Green (a firm)

Where a Part 36 offer is accepted after the relevant period, the normal costs order applies unless departure from it would be unjust. The court must consider all the circumstances, including the terms and timing of the offer, the information available, and the parties’ conduct concerning information relevant to evaluating it. Material non-compliance with a relevant pre-action protocol may justify departure from the normal order. A party seeking to protect its costs position cannot reasonably refuse disclosure needed to assess liability and settlement until liability has been admitted.

The claimant, a residential mortgage lender, brought a negligence claim against the defendant solicitors concerning advice given on a property acquisition. The claim settled when the defendant accepted a Part 36 offer after expiry of the relevant period. The issue was the appropriate order for costs under CPR 36.10(4), in circumstances where the claimant had refused or failed to provide documents requested under the Professional Negligence Pre-Action Protocol.

1. The claim having settled by acceptance of the claimant’s Part 36 offer after expiry of the relevant period, the normal order was that the claimant should receive its costs up to acceptance. Departure required the defendant to establish that it would be unjust for that order to apply. The court had to consider all the circumstances, including the matters identified in CPR 36.14(4): the terms of the offer, when it was made, the information available, and the parties’ conduct concerning information needed to make or evaluate the offer. SG v Hewitt [2012] EWCA Civ 1053 was applied.
2. The Professional Negligence Pre-Action Protocol required an early exchange of relevant information so that the claim could be investigated and, if possible, resolved without litigation. The court’s assessment of whether departure from the normal costs order would be unjust could properly take account of substantial non-compliance with the Protocol and the possibility of sanctions under the Practice Direction for Pre-Action Conduct.
3. The claimant’s refusal to provide important underwriting and repossession and sale files, despite repeated requests explaining their relevance, was unreasonable. Its position that no further disclosure was required until liability was admitted was outside the letter and spirit of the Protocol and was not conducive to early resolution.
4. It would therefore be unjust for the normal order to apply. The claimant was awarded its costs up to 17 June 2011. It was ordered to pay the defendant’s costs incurred thereafter, all costs to be assessed on the standard basis if not agreed.