Ho v Adelekun

A Part 36 offer in a claim governed by the fixed recoverable costs regime is ordinarily construed consistently with that regime. A reference to CPR 36.13 or to detailed assessment does not, without sufficiently clear contrary language, amount to an agreement to pay conventional assessed costs.

Parties may contract out of fixed costs, but an offer departing from the costs consequences prescribed by Part 36 cannot itself be a Part 36 offer. After settlement and a stay, the court’s continuing power to determine costs does not permit reallocation of the claim merely to disapply fixed costs retrospectively, particularly where that would contradict the settlement.

The claimant brought a road traffic accident claim under the RTA Protocol. After the claim left the Protocol and was allocated to the fast track, she sought reallocation to the multi-track because its value had increased. Before that application was heard, she accepted the defendant’s offer of £30,000. The offer referred to CPR 36.13 and stated that costs would be subject to detailed assessment if not agreed. A Tomlin order then stayed the proceedings.

A deputy district judge held that fixed recoverable costs applied. His Honour Judge Wulwik reversed that decision. The defendant appealed. The issues were whether the offer promised conventional assessed costs and, if not, whether the claim could be reallocated retrospectively so as to disapply fixed costs.

1. Appeal allowed. The offer, objectively construed as a whole, did not promise conventional assessed costs. CPR 36.5(1)(c) concerns the period for acceptance, rather than selection between the costs regimes in CPR 36.13 and CPR 36.20. CPR 36.13 itself directs attention to CPR 36.20 and the fixed costs provisions applicable to claims formerly proceeding under the RTA Protocol.

2. The offer was expressly intended to operate under Part 36. The self-contained Part 36 code prescribes fixed costs for a claim within CPR 36.20. An offer which instead promises costs on a basis departing from Part 45 is incompatible with Part 36 and cannot be a Part 36 offer. Although parties may contract out of fixed costs, the language used here did not do so.

3. The reference to detailed assessment was inapt but not decisive. Fixed and conventionally assessed costs are conceptually different, as explained in Broadhurst v Tan [2016] EWCA Civ 94. Nevertheless, the fixed costs regime may involve assessment of disbursements or additional costs claimed in exceptional circumstances. The reference therefore did not clearly displace fixed costs when read with the other terms and the surrounding procedural framework.

4. The claimant could not obtain retrospective reallocation after settlement. The exception in CPR 36.14(5), preserving the court’s power to decide questions of costs despite the stay, did not extend to an application to reallocate the claim. The Tomlin order also stayed proceedings except to implement its scheduled terms, which said nothing about reallocation. In any event, disapplying fixed costs after the event would contradict the parties’ agreement.

5. Newey LJ gave the leading judgment. Males LJ agreed and emphasised that an intention to contract out of fixed costs must be expressed clearly. The Chancellor agreed with both judgments.

1. Court of Appeal (Civil Division): The defendant’s appeal was allowed. The fixed recoverable costs regime applied.
2. County Court at Central London, His Honour Judge Wulwik: Allowed the claimant’s appeal and held that the fixed costs regime was inapplicable.
3. County Court at Central London, Deputy District Judge Harvey: Held that the fixed costs regime applied.