Ali & Anor v Channel 5 Broadcast Ltd

Where a claimant fails to obtain a judgment more advantageous than a valid defendant’s Part 36 offer, the ordinary costs consequences generally follow. The court must nevertheless consider whether imposing them would be unjust, having regard to all the circumstances and to the parties’ responsibility for costs incurred. The burden on the claimant is formidable.

An offer covering parallel claims may comply with Part 36 even if the sum is offered jointly. A later undertaking addressing non-monetary relief may constitute an improved offer and restart the relevant period. A party that treats an offer as valid may be estopped from later challenging its compliance. Failure to file a costs budget attracts the applicable sanction, including the restriction to 50% of assessed costs.

The claimants succeeded at trial in their claim against Channel 5 for misuse of private information and were awarded damages. The court then determined liability for costs.

The issues were whether the claimants had refused alternative dispute resolution; whether Channel 5’s monetary offer, later supplemented by an undertaking not to rebroadcast the relevant footage, was a valid Part 36 offer; whether it would be unjust to impose the usual consequences of failing to beat that offer; and what consequences followed from Channel 5’s failure to file a costs budget.

1. Costs before 8 November 2017. The claimants had not refused ADR. They had kept ADR under review, invited proposals, and promptly accepted Channel 5’s eventual proposal. They were therefore entitled to their costs for that period.
2. Improved Part 36 offer. The undertaking offered on 17 October 2017 addressed the non-monetary relief sought in the claim and was an improved offer within CPR rule 36.9(5). The relevant 21-day period therefore began again. Even if the original offer had been valid and the ordinary consequences would otherwise apply, imposing them before the expiry of the new period would have been unjust.
3. Validity of the original offer. Although the claims were technically distinct, they were parallel claims arising from the same events. Offering one sum jointly did not prevent compliance with CPR rule 36.5. The claimants were also estopped from challenging validity because they had been invited to identify any defect and had treated the offer as valid. The reasoning in Seeff v Ho was applicable.
4. Unjustness. The question was whether the costs order would be unjust in all the circumstances, not simply whether refusal of the offer was reasonable. The principles in Smith Trafford Housing Trust, approved in Webb v Liverpool Women’s NHS Foundation Trust, applied. The claimants’ reliance on viewing figures and the absence of an apology did not establish injustice. Yentob v MGN Ltd was exceptional and distinguishable. Damages for misuse of private information were compensatory, not vindicatory, and the claimants could have made a unilateral statement in open court.
5. Costs budget sanction. Channel 5’s failure to file a costs budget engaged CPR rule 3.14. The sanction applied from the date on which the budget should have been filed, not merely from the later costs management hearing. Under CPR rule 36.23(2)(a), Channel 5 could recover only 50% of its assessed costs after 8 November 2017.
6. Channel 5’s recoverable costs after 8 November 2017 were set off against the costs payable to the claimants for the earlier period, but not against damages.

First-instance costs judgment following the court’s earlier judgment on liability and damages, [2018] EWHC 298 (Ch). No appellate history is stated.