OMYA UK LIMITED v ANDREWS EXCAVATIONS LIMITED & Anor

Part 36 consequences are not avoided merely because a claimant’s offer leaves only a small mathematical discount. The question whether an offer was a genuine attempt to settle is contextual. The court must consider the offer and the factors in CPR 36.17, including the information available and the parties’ conduct.

Where the normal Part 36 consequences apply, enhanced interest and indemnity costs may be ordered. Interest must remain proportionate, having regard to the period between offer and judgment, the reasonableness of the defence and prevailing commercial rates. Indemnity costs require conduct or circumstances taking the case out of the norm, assessed without hindsight.

The claimant had obtained judgment for £765,094.40 against both defendants. The defendants paid the judgment sum and £300,000 on account of costs. The court then determined the consequential issues arising from the claimant’s Part 36 offer of £756,287.05.

The issues were whether the enhanced Part 36 consequences applied, the appropriate basis and rate for costs and interest, whether the court had jurisdiction to grant permission to appeal, and the costs and continuation of a freezing injunction.

1. Part 36. The judgment exceeded the claimant’s offer. The relevant question was whether the offer was a genuine attempt to settle, not whether the discount satisfied a mathematical threshold. The small discount was relevant but not determinative. The absence of significant quantum dispute, the weakness of the defence and the claimant’s legitimate litigation risks supported the conclusion that the offer was genuine.
2. The defendants failed to show that applying the normal consequences would be unjust. The court therefore ordered the additional amount under CPR 36.17(4)(d)(i), indemnity costs from expiry of the offer and enhanced interest.
3. Costs. Costs before expiry of the offer were also to be assessed on the indemnity basis. Conduct need not involve moral condemnation, but must be unreasonable to a high degree or otherwise take the case out of the norm. The defendants’ pleaded and maintained case, including matters identified in the claimant’s submissions, justified that order.
4. Interest. The court considered the period between offer and judgment, the wholly implausible defence, the defendants’ conduct and proportionality against the permitted maximum and commercial rates. Interest at 5% above base rate was appropriate.
5. Permission to appeal. Under McDonald v Rose, the court could not entertain an application made after the decision hearing where that hearing had not been adjourned. The application was therefore outside the court’s jurisdiction. In any event, permission would have been refused because the underlying decision was factual.
6. Freezing injunction. The costs of the freezing-order application were payable by the defendants because the application was reasonable in the circumstances. The undertaking was to be discharged after finalisation of the consequential order and payment, subject to a short protective period if payment was not made.

Not an appeal. The judgment determined consequential matters following the court’s earlier judgment handed down on 17 December 2021.