The High Court has effectively blocked a party from disclosing their opponent’s Part 36 offer at a procedural hearing.

Mrs Justice Collins Rice ruled in FKJ v RVT & Ors that the appellants – an unnamed employer facing a privacy trial – could not refer to the offer at the interlocutory hearing. The decision upheld the judgment of Senior Master Fontaine from 2021, who refused an application from the employer to disclose the offer.

The judge said the fact and terms of the respondent’s Part 36 offer were ‘irrelevant’ to issues around case management and costs budgeting in this case. While the master’s views were ‘to a degree incomplete and contestable’, this made no material difference to her conclusions and the initial decision was neither wrong nor unjust.

The court heard that the respondent was a newly-qualified solicitor employed and supervised by the appellants until she was summarily dismissed in 2017. The employer was successful in subsequent employment tribunal proceedings but now faces a claim for misuse of private information. All parties were anonymised to preserve the solicitor’s privacy pending her trial.

The solicitor had made an offer to settle both her claim and the employer’s counterclaim in October 2020, but the Part 36 was not accepted. The employer then made a formal application for a court order to be allowed to refer to the offer at the interlocutory hearing.

Civil procedure rules state that once Part 36 offers are made, with limited exceptions, the terms must not be communicated to the trial judge until the case has been decided.

But the employer argued that it should be allowed to refer to the offer where questions of proportionality arose, and that the master wrongly concluded the application was not in the solicitor’s interests.

The employer wanted to refer to the Part 36 and settlement sum mentioned to help show that the solicitor’s costs were ‘out of all proportion’ and to demonstrate the disproportionality compared to its own costs.

The judge said that a court considering proportionality or costs budgeting would be ‘focused on the ratio of costs to the value of the whole claim [and] not assisted by knowing the undervalue at which a claimant might, for any number of reasons, be willing to settle’. This was particularly the case in a privacy claim, where damages were often just one part of the remedy sought, and vindication was also an important consideration.

 

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