Matiere SAS v ABM Precast Solutions Ltd

Part 36 consequences may be applied separately to distinct elements of proceedings. An offer may be a genuine attempt to settle a claim but not a counterclaim where it allows a substantial proportion of the claim’s value but makes no allowance for a substantial and discrete counterclaim. The court may therefore withhold indemnity costs and enhanced interest for the counterclaim while granting those consequences for the claim. The test remains whether applying the usual Part 36 consequences would be unjust, and the burden on the offeree is a formidable one. The maximum enhancement of 10% above base rate is not a default rate. It must be proportionate to all the circumstances. A successful party’s failure on subsidiary issues does not automatically justify a costs reduction where those issues formed part of a single unsuccessful claim.

The judgment determined consequential matters following the liability judgment in Matière SAS v ABM Precast Solutions Ltd [2025] EWHC 1434 (TCC). Matière had obtained judgment for £373,295.06 on unpaid invoices and had defeated ABM’s counterclaim for substantial damages for alleged breaches of duties of good faith.

Matière had made a Part 36 offer of £350,000 to settle the entire proceedings, including the counterclaim. ABM did not accept it. The issues were whether the offer was a genuine attempt to settle the proceedings, whether the usual Part 36 consequences should apply to the claim and counterclaim, the appropriate interest rates, the effect of Matière’s conduct and partial success on costs, and the amount payable on account.

1. Part 36 offer. The offer’s operative wording included the claim and counterclaim, but the offer represented approximately 88% of the claim’s value and made no monetary allowance for the much larger, discrete counterclaim. An offer making no allowance for that counterclaim amounted to total capitulation in that respect and was not a genuine attempt to settle the proceedings so far as the counterclaim was concerned. It was, however, a genuine attempt to settle the claim. CPR 36.17(5)(e) could be applied flexibly to that distinction.
2. The court continued to apply the CPR 36.17(5) test when considering the counterclaim. The fact that the offer’s full consequences were not imposed did not displace the requirement to consider whether the resulting order would be unjust. ABM had sufficient information to evaluate its counterclaim, and its later £5m offer showed that it did not require further disclosure or a trial to assess its prospects.
3. ABM’s successes on contractual scope and some breaches did not justify a proportionate reduction in Matière’s costs. Those matters were steps towards a single claim for loss of chance, on which ABM failed principally on causation. The evidence on breach and causation substantially overlapped.
4. Matière’s dishonest conduct and breaches of the duty of good faith did not warrant a separate costs reduction. The conduct was not at the most egregious level, did not materially fuel the dispute, and did not materially extend the trial.
5. The usual Part 36 consequences applied to the claim but not to the counterclaim. Matière was entitled to claim costs on a standard basis up to expiry of the relevant period and on an indemnity basis thereafter. Counterclaim costs were payable on a standard basis throughout. The 10% uplift and enhanced interest applied to the claim. Enhanced interest on claim costs was allowed, but not on counterclaim costs.
6. The maximum rate of 10% above base rate was not a starting point. The appropriate rate was 7% above base rate for the principal sum and claim costs after expiry of the relevant period, 4% above base rate for pre-period interest on the claim, and 2% above base rate for counterclaim costs and the payment on account.
7. A payment on account of costs was ordered in the sum of 90% of the approved budget. The consequential hearing costs were subsumed within the general costs order, and payment was to be made within 21 days of the order.

First-instance consequential judgment following the liability judgment in Matière SAS v ABM Precast Solutions Ltd [2025] EWHC 1434 (TCC).