The High Court has penalised – but not harshly – a claimant for failing to provide information earlier that might have brought forward a settlement offer.
In Optical Express Ltd & Ors v Associated Newspapers Ltd, Mr Justice Warby said the claimants had provided no explanation for taking a late Part 36 acceptance at a vastly reduced level than they wanted.
The high street optician had originally described the Mail owner’s offer of £125,000 damages, made in May 2016, as ‘wholly derisory’ and instead made a special damage claim for £21.5m, based on purported losses following an article published in January 2015.
Warby said the claimants made a ‘volte face’ and in February 2017 served and filed notice of acceptance of the defendant’s Part 36 offer. This was several months late, according to Civil Procedure Rules, and the parties disputed who should absorb the costs incurred during the period of negotiation.
The judge stressed the mere fact a Part 36 was accepted out of time was not a basis on which to award the defendant indemnity costs, but he noted the offer was a tiny proportion of the sum claimed and there had been no explanation for accepting such an amount.
Warby added: ‘It is permissible to infer that the belated acceptance was prompted by a re-assessment of the claim which could and should have been made earlier; or by some external factor which meant that it happened to suit the claimants to bring an end to the claim at that time.’
The judge said it was legitimate to describe the claimants’ conduct as ‘highly unreasonable’ and that the pursuit of the pleaded claim after the Part 36 offer expired was ‘wholly disproportionate’.
‘It is fair to say that the claimants have forfeited their right to the benefit of a proportionate assessment of the defendant’s costs, and to the benefit of the doubt on reasonableness,’ said the judge.
But Warby insisted it would be unjust to make the normal orders upon late acceptance of an offer and said the claimants could hardly be expected to accurately calculate losses at the outset of their claim.
The defendant was ‘more successful’ but the agreed compensation was nevertheless ‘substantial’ and the judge rejected the pleading that £125,000 damages for libel was a ‘token’ recovery.
Warby ordered that the claimants recover their costs up to January 2016, and the costs of and caused by the preparation and service of further information in May 2016. The January date relates to the potential date for Part 36 acceptance if the claimants had acted more reasonably in the provision of information.
The defendant will recover its costs from January 2016 on the standard basis until June 2016 and on the indemnity basis thereafter.