Samuel Arthur Jones v Neal Tracey & Ors

A communication’s “without prejudice” status is determined objectively. The court considers its drafting, context and the view of a reasonably minded recipient, rather than subjective intention. Communications about the possibility of alternative dispute resolution will generally be open where they do not form part of specific settlement negotiations. Silence does not necessarily amount to a refusal to mediate; the conclusion depends on the circumstances. Part 36 applies to probate claims, including pre-issue offers. Its provisions must be read with the probate rules so that agreed terms can be implemented by the appropriate grant, discontinuance or dismissal. The burden lies on the party resisting the Part 36 consequences to show that their application would be unjust.

The judgment concerned costs following a successful probate claim decided after trial in [2023] EWHC 2242 (Ch). The claimant had sought admission to probate of a copy will. The third defendant had opposed the claim and counterclaimed for a grant on intestacy.

The court had to decide whether a letter marked “without prejudice” could be considered on costs, whether the claimant’s conduct concerning alternative dispute resolution justified a reduction in costs, and whether a pre-issue Part 36 offer was effective in a probate claim. It also had to determine whether applying the Part 36 consequences would be unjust.

1. Without prejudice status. The letter marked “without prejudice” was admissible. The court determines the character of a communication objectively, considering its wording, its place in the relevant correspondence and how a reasonably minded recipient would understand it. Subjective explanations from the solicitors were inadmissible. The letter responded to open correspondence about ADR, did not contain an offer, and did not relate to a specific settlement offer. It was therefore open rather than privileged.
2. ADR conduct. The claimant’s failure to engage more positively with ADR was surprising, but did not justify a deduction from costs. The court considered the claimant’s earlier settlement efforts, the limited settlement options in a probate claim, the third defendant’s conduct of the litigation, the strength of the claimant’s case and the lateness and lack of specificity of the third defendant’s ADR proposal. On those facts, silence did not amount to a refusal to mediate or otherwise undertake ADR.
3. Part 36 in probate claims. Part 36 applies to probate claims, including offers made before proceedings are issued. Although acceptance of an offer ordinarily stays a claim, a probate claim cannot simply remain stayed because the estate must be administered. Part 36 and Part 57 must therefore be read together. Following settlement, the claim may require discontinuance or dismissal, or a grant in solemn form or under section 49 of the Administration of Justice Act 1985. The stay operates in a limited way and does not remove the court’s powers to secure proper disposal of the probate claim.
4. Unjustness and order. The third defendant bore the burden of showing that applying the consequences in CPR rule 36.17(4) would be unjust. The offer was realistic, made well before issue, represented a genuine attempt to settle, and was made when the third defendant had sufficient information to assess the claim. It was not unjust to apply the consequences.
5. The third defendant was ordered to pay the claimant’s costs on the standard basis until expiry of the relevant period and thereafter on the indemnity basis, with interest at 4% above base rate and an additional sum of 10% of the assessed costs.

This was a first-instance costs judgment following the trial judgment in [2023] EWHC 2242 (Ch).