Mehjoo v Harben Barker (a firm) & Anor

A claimant who obtains a judgment at least as advantageous as a valid Part 36 offer is ordinarily entitled to the prescribed benefits, including indemnity costs and enhanced interest. The court assesses advantage in money terms and does not ordinarily deduct costs payable on unrelated issues. An alleged deficiency in information justifies withholding the usual order only if it made the order unjust and causally affected the recipient’s decision. Costs remain a broad discretionary matter, with the overall result carrying substantial weight. An interim payment on account should reflect a reasonable assessment of the likely costs recovery, informed by the evidence available.

The judgment determined consequential issues following the main judgment in which the claim against the first defendant was dismissed and judgment was entered against the second defendant for £1,192,546.02. The remaining questions concerned costs, the effect of the claimant’s Part 36 offer, indemnification for disclosure costs, interest, an interim costs payment, a stay pending appeal, and the time for seeking permission to appeal.

1. Costs of the first defendant. The first defendant was entitled to its costs because the claim against it failed and its participation caused some additional, although limited, costs.
2. Part 36 offer. The claimant had beaten the offer. Under CPR Part 36, the comparison was made in money terms. Costs payable to the first defendant and costs relating to the abandoned Spanish property claim did not prevent the claimant from obtaining a judgment more advantageous than the offer.
3. The withdrawal of the offer after trial was unnecessary because it could not have been accepted without the claimant’s consent. It therefore did not deprive the claimant of the offer’s beneficial consequences. The absence of detailed information about the claimant’s costs did not make the prescribed order unjust. The relevant information principally concerned the merits, and the defendants had not shown that better costs information would have caused them to accept the offer. They could also have sought clarification under Part 36.8.
4. The changing evidential and procedural landscape before trial did not make a Part 36 order unjust. The claimant was therefore entitled to indemnity costs from 12 October 2012, interest at 10 per cent above base rate on the relevant sums, and the other consequences of CPR 36.14(3).
5. Issue-based costs. Costs are governed by the overall justice of the case. The claimant was the successful party, and the court should be slow to reduce his costs merely because he failed on individual issues. A 5 per cent reduction was nevertheless appropriate to reflect the costs of resisting the claimant’s recall and, to a minor extent, unnecessary cross-examination. The second defendant was ordered to pay 95 per cent of the claimant’s costs, assessed on the standard basis up to 12 October 2012 and on the indemnity basis thereafter.
6. The claimant was entitled to an indemnity for fees payable to Grant Thornton because the disclosure obtained at trial was highly relevant to the expert evidence.
7. Interest before 12 October 2012 was set at 2 per cent above base rate. An interim payment on account of costs of £1.7 million was ordered. No stay was granted on the material before the court, although the defendants had liberty to apply regarding security. Permission to appeal had to be sought within 21 days of hand-down.

This was a first-instance consequential judgment following the main judgment in the same proceedings. The judgment records the main judgment citation as [2013] EWCA 1500 (QB), but treats the present hearing as determining the consequential orders.