Hislop v Perde

Where a claim remains subject to the fixed recoverable costs regime and a defendant accepts the claimant’s Part 36 offer after the relevant period but before trial, the claimant remains entitled only to fixed costs. Rule 36.20 governs such acceptance and excludes the general regime in rule 36.13.

A claimant who beats an offer at trial may recover the enhanced benefits preserved by rule 36.17. Late acceptance alone creates no equivalent entitlement. Exceptionally, rule 45.29J may permit recovery above fixed costs. Whether circumstances are exceptional is fact-sensitive: unexplained lengthy delay may suffice, while brief, reasonably explained delay will not. No separate causal link between the exceptional circumstances and increased expenditure is required.

These conjoined appeals concerned low-value personal injury claims which had left their respective pre-action protocols but remained within Section IIIA of Part 45 of the Civil Procedure Rules 1998.

In Hislop, the defendant accepted the claimant’s Part 36 offer about 19 months late and shortly before trial. A district judge awarded fixed costs, but Judge Walden-Smith ordered standard-basis costs after expiry of the offer’s relevant period. In Kaur, the claimant accepted a later and higher defendant’s offer. District Judge Reed awarded standard-basis costs after allocation, partly because he considered the case exceptional under rule 45.29J.

The central issue was whether late acceptance before trial permits a claimant to escape fixed recoverable costs and obtain standard or indemnity costs.

1. Both appeals were allowed unanimously. In Hislop, the order of District Judge Lenon QC awarding fixed costs was restored. In Kaur, the claimant was entitled only to fixed costs up to the stage at which she accepted the defendant’s offer.

2. Rule 36.20 exclusively governs the costs consequences of accepting a Part 36 offer before trial where Section IIIA of Part 45 applies. The general rule in rule 36.13 is expressly subject to rule 36.20 and is not preserved for fixed-cost cases. Late acceptance of a claimant’s offer therefore creates no entitlement to standard or indemnity costs: [2012] 1 WLR 1048 followed.

3. The position after judgment is materially different. Rule 36.21 expressly preserves rule 36.17, including the enhanced package available when a claimant obtains a judgment at least as advantageous as the claimant’s offer. That express drafting justified the result in [2016] EWCA Civ 94. No corresponding wording preserves rule 36.13 when an offer is accepted before trial.

4. This construction maintains the comprehensive, certain and proportionate character of fixed recoverable costs. The regime permits departure only through clearly stated, limited exceptions. It treats claimants and defendants consistently because a defendant’s recovery following a claimant’s late acceptance is also confined to fixed costs.

5. Rule 45.29J remains a possible escape route where exceptional circumstances make recovery above fixed costs appropriate. Late acceptance is not inherently exceptional. A long and unexplained delay may satisfy the rule, while a short delay supported by a reasonable explanation will not. The rule does not impose an additional requirement to prove a precise causal connection between the exceptional circumstances and increased expenditure.

6. Neither case satisfied rule 45.29J. In Hislop, the unchallenged finding that the circumstances were not out of the norm precluded a finding of exceptionality. In Kaur, the district judge’s conclusion rested on the erroneous premise that the defendant’s later offer had deprived the claimant of an entitlement to indemnity costs.

7. The claimant’s written statement that she accepted the defendant’s Part 36 offer, while asserting a claim to indemnity costs, was an unqualified acceptance. The reference to costs was a warning of an intended argument, not a counter-offer or a condition of acceptance.

1. Court of Appeal (Civil Division): Allowed both appeals. It restored the Hislop district judge’s fixed-costs order and substituted an entitlement to fixed costs in Kaur.

2. Central London County Court: Judge Walden-Smith allowed Hislop’s appeal from the district judge and ordered standard-basis assessment after expiry of the Part 36 offer’s relevant period.

3. County Court at Willesden: District Judge Lenon QC refused indemnity costs and awarded fixed costs in Hislop.

4. Leicester County Court: District Judge Reed awarded fixed costs up to allocation and standard-basis costs thereafter in Kaur, treating the circumstances as exceptional under rule 45.29J.