Tuson v Murphy

Under the Civil Procedure Rules Part 36, late acceptance of an offer ordinarily attracts the specified costs order. The discretion to depart on grounds of injustice is fact-sensitive but not unfettered, and the burden of showing injustice is formidable. The court must consider all the circumstances, including information available when the offer was made. Where the defendant already knew the material facts and its assessment was not later upset by significant new events or facts, it is highly unlikely to be unjust to apply the default rule. A defendant seeking special costs protection for dishonest aspects can make a Calderbank offer outside Part 36.

The claimant suffered physical and psychiatric injury after falling from a horse. Liability was admitted subject to a 15% reduction, and she pursued a substantial claim for future loss of earnings. She later accepted the defendant’s unconditional Part 36 offer of £352,060, but only after the relevant 21-day period had expired.

The Oxford County Court found that the claimant had deliberately withheld material information about a playgroup venture and ordered the defendant to pay costs only up to 1 April 2014, with the claimant paying the defendant’s costs thereafter. The appeal concerned whether that conduct made the ordinary late-acceptance costs order unjust, despite the defendant knowing of the non-disclosure when it made the offer.

Appeal allowed. The claimant’s deliberate withholding of information about the playgroup was properly characterised as dishonest and misleading. It did not, however, establish fabricated disability or gross exaggeration on the scale considered in [2012] 1 WLR 2004 Summers v Fairclough Homes Ltd.

1. Under Civil Procedure Rules 36.13(5) and (6), late acceptance of a Part 36 offer attracts the default costs order unless departure would be unjust. The court must consider all the circumstances, including the information available to the parties when the offer was made under rule 36.17(5). The discretion is fact-sensitive, but it is not unfettered.
2. The formidable burden of establishing injustice was confirmed by the approach in [2016] 1 WLR 3899 Webb v Liverpool Women’s NHS Foundation Trust and the principles summarised in [2012] EWHC 3320 (Ch) Smith v Trafford Housing Trust. The court accepted that the inquiry is broad, but rejected any suggestion that dishonesty automatically permits departure from the ordinary consequences.
3. The court adopted the distinction drawn in [2016] EWHC 3480 (QB) Tiuta PLC (in liquidation) v Rawlinson & Hunter (a firm). Where the facts known to the offeror remain materially unchanged before delayed acceptance, it is highly unlikely to be unjust to apply the default rule. A later event or newly discovered fact which materially undermines the offeror’s assessment may justify a different result.
4. The defendant’s advisers knew of the claimant’s non-disclosure when the unconditional offer was made. The offeror’s assessment was therefore not upset by a later change or discovery. The judge failed to address the significance of the unconditional Part 36 offer and the alternative of a Calderbank offer on special costs terms, as explained in [2012] 1 WLR 2004 Summers.

The defendant was ordered to pay the claimant’s costs up to 8 October 2015. The claimant remained liable for the defendant’s costs from 8 October to 1 December 2015.

• Court of Appeal (Civil Division) — [2018] EWCA Civ 1461: allowed the appeal and substituted the ordinary late-acceptance costs order.
• Oxford County Court — On 6 April 2016, His Honour Judge Charles Harris QC ordered the defendant to pay the claimant’s costs only up to 1 April 2014, with the claimant paying the defendant’s costs thereafter.