Jordan v MGN Ltd

Late acceptance of a Part 36 offer ordinarily attracts the prescribed costs consequences. Departure from that order requires injustice, assessed in all the circumstances, and the burden is substantial. Settlement negotiations which merely contain coinciding offers do not establish agreement on damages or make continuation of live liability and quantum issues abusive. Without prejudice save as to costs material cannot ordinarily be deployed before the trial judge to obtain judgment or establish abuse, unless it has produced a binding agreement. A party’s persistent failure to engage constructively with reasonable offers, followed by abandoning the claim shortly before trial, may justify indemnity costs.

The claimant brought proceedings alleging phone hacking and other unlawful information gathering by the defendant’s newspapers. Shortly before trial, he sought to end the action on the basis of alleged abuse of process, an alleged compromise, or acceptance of earlier offers. Those grounds were abandoned, save for acceptance of a September 2014 Part 36 offer. The remaining issues were the costs consequences of that late acceptance and whether the defendant’s costs should be assessed on the indemnity basis.

1. The claimant was treated as having accepted the September 2014 Part 36 offer. Under the applicable former version of CPR 36.10, the ordinary order was that the claimant receive costs to expiry of the relevant period and pay the offeror’s costs thereafter. The defendant’s earlier undertaking meant that the relevant recoverable period began on 15 September 2016.
2. The court declined to depart from that order. The parties had not agreed damages at £90,000. Their correspondence contained settlement offers made as part of packages, while liability, the scope of the unlawful conduct and quantum remained live. The fact that negotiations had reduced the practical dispute to costs did not make the continued defence abusive.
3. Hanspaul v Ward was distinguishable because the relief sought there had been removed by agreement or events, leaving only costs. This action remained live on material issues. Jameel (Yousef) v Dow Jones & Co Inc was also inapplicable because that case concerned disproportion between the cost of pursuing the claim and what could be achieved.
4. The ordinary costs consequences were reinforced by the claimant’s conduct. He had failed to engage with increasing settlement offers, including an £80,000 offer, and ultimately accepted a much lower historic offer without explaining why he had abandoned the claim.
5. The defendant’s costs after the relevant period were ordered to be assessed on the indemnity basis. The claimant’s failure to engage constructively, together with the last-minute conduct and unexplained abandonment of a claim prepared for trial, amounted to unreasonable conduct to a high degree.
6. The judge additionally indicated that deploying WPSAC material before the trial judge to establish abuse or liability would ordinarily be impermissible. Future applications involving such material should be placed before the appropriate judge so that the trial judge’s impartiality and the managed litigation process are not compromised.