In July 2008, Janice Long [JL] instigated personal injury [PI] proceedings against her employer, Business Solutions PLC [BSP], for a back injury which she sustained at its premises in December 2006. JL is claiming for Â£30,000 in compensation. JL has followed the Pre-Action Protocol for Personal Injury Claims.
BSP submitted its defence in August 2008, and made JL a Part 36 settlement offer of Â£10,000 on 15th August 2008. JL has refused this offer and has failed to make a counter-offer. JL has indicated that she wants matters to proceed to Court, and is unprepared to engage further in pre-trial settlement negotiations.
How likely is it that the Court will make a costs order in favour of JL, if she is awarded more than Â£10,000?
How would this position change if the amount awarded is only slightly greater than Â£10,000?
How would this position change if the amount awarded is Â£10,000, i.e. the same value as the Part 36 offer made by BSP?
What costs protection, if any, does a Part 36 offer provide to a defendant where the final award granted by the Court exceeds the equivalent value of that settlement offer?
What costs protection, if any, does a Part 36 offer provide to a defendant where the final award granted by the Court exceeds the equivalent value of that settlement offer, but only by a small amount?
What costs protection, if any, does a Part 36 offer provide to a defendant where the final award granted by the Court is equivalent to the value of that settlement offer?
LAW AND APPLICATION:
In regard to JL being granted a costs award if the judgement significantly exceeds BSPâ€™s Part 36 offer: Rule 36.14 CPR provides that where â€˜judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimantâ€™s Part 36 offerâ€™ [36.14(1)(b) CPR], then, â€˜the court will, unless it considers it unjust to do so, order that the claimant is entitled to â€“(a) interest on the whole or part of any sum of money (excluding interest) awarded at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expired;(b) his costs on the indemnity basis from the date on which the relevant period expired; and(c) interest on those costs at a rate not exceeding 10% above base rate.â€™ [36.14(3) CPR]. In light of the fact that JL was totally unwilling to renegotiate settlement, even though BSP invited her to make a counter-offer over Â£10,000, it is possible that the Court would not grant a costs award, deeming it â€˜unjust to do soâ€™ in accordance with 36.14(3), supra.
In regard to JL being granted a costs award if the judgement exceeds BSPâ€™s Part 36 offer, but only by a small amount: In the recent case of Lisa Carver v BAA Plc  EWCA Civ 412 it was held that, in assessing whether or not a judgement is â€˜more advantageousâ€™ than a Part 36 offer, a Court is obliged to take into account all of the facts and circumstances surrounding the case. This means that the assessment will not be made on monetary value alone. For example, in this case, Ward LJ held that the difference (between the judgement and the Part 36 offer) of Â£51.00 was â€˜was more than offset by the irrecoverable costs incurred by the claimant in continuing to contest the case for as long as she didâ€™.
In regard to JL being granted a costs award if the judgement is equal to BSPâ€™s Part 36 offer, rule 36.14(a) and 36.14(2) CPR is likely to operate to allow the defendant to recover his costs from JL: â€˜[Where] a claimant fails to obtain a judgment more advantageous than a defendantâ€™s Part 36 offer… the court will, unless it considers it unjust to do so, order that the defendant is entitled to â€“(a) his costs from the date on which the relevant period expired; and(b) interest on those costs.â€™
If the Court makes a judgement significantly greater than Â£10,000, while JL would ordinarily be entitled to be granted a costs award, it is possible that no award would be granted, because of her unwillingness to engage in pre-trial negotiation.
If the Court makes a judgement only slightly greater than Â£10,000, the chances of JL being granted a costs award are even slimmer; not only might the court deem it â€˜unjustâ€™ to grant such an award, but it may also consider the award to be of no greater value than the Part 36 offer, taking into account all the facts of the case, in accordance with the case of Lisa Carver v BAA Plc  EWCA Civ 412.
If the Court makes a judgement of less than Â£10,000, then JL will not be granted a costs order. In fact, it is highly likely that a costs order will be granted against her, in favour of BSP.
SEARCH PLAN (a) Problem: Employee [JL] making a claim for PI against her employer [BSP]. She wants to ensure she is protected against costs. (b) Facts: JL rejected BSPâ€™s Part 36 Offer. JL refuses to renegotiate despite being invited to make a counter-offer by BSP. (c) Issues: Whether JLâ€™s conduct will prejudice her right to claim costs if (a) judgement is significantly greater than BSPâ€™s Part 36 offer; or, (b) judgement is only slightly greater than BSPâ€™s Part 36 offer. (d)(i) Keyword: â€˜Part 36 Offerâ€™ Æ’ Source: Halsburyâ€™s Law Æ’ Findings: The Civil Procedure Rules 1998, Statutory Instrument 1998 No. 3132 L.17. (ii) Keywords: â€˜Cost implications of Part 36 Offerâ€™, â€˜Refusal of Part 36 Offerâ€™ Æ’ Source: West Law Æ’ Findings: Lisa Carver v BAA Plc  EWCA Civ 412. Part 2:
Govinder Singh [GS] is taking legal action against his former business partner, Grant Hadley [GH].
GS is being represented on a pro bono basis by a firm of solicitors.
If GS is successful in his claim against GH, is it possible that a costs award would be granted in his favour against GH to remunerate the solicitors who were acting for GS?
Is a solicitor action on behalf of his client on a pro bono basis entitled to recover his costs if his client wins the case?
LAW AND APPLICATION:
Part 8 of the Legal Services Act 2007 – Miscellaneous Provisions about Lawyers -contains clause 194, which allows for a costs order to be granted against any party by the Court, in cases where a solicitor was representing his client on a pro bono basis, those costs being given to a charity of the solicitorâ€™s choosing.
Costs cannot be recovered by GSâ€™s solicitor, regardless of the outcome of the case.
SEARCH PLAN (a) Problem: Solicitor working for GS, free of charge, in a defamation claim against GH. (b) Facts: Solicitor has asked to be advised on whether or not a costs award will be granted in favour of GS if he wins his case. (c) Issues: Can a pro bono solicitor ever recover his costs from a successful litigation? (d)(i) Keyword: â€˜Pro Bonoâ€™ Æ’ Source: Halsburyâ€™s Law Æ’ Findings: The Legal Services Act 2007, s194.
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