A claimant who offered to beat her own Part 36 offer by just 7p should face costs penalties because that offer was not genuine, a county court has ruled.

District Judge Griffith, sitting in the Birmingham County Court in Gohil v Advantage Insurance Company Limited, agreed the claimant had made a ‘tactical step’ rather than offer to settle at 99.999% of the full value.

The claimant therefore did not receive additional Part 36 benefits despite beating its own offer.

The decision was based on the Court of Appeal judgment in Huck v Robson, where the lead judge Lord Justice Jonathan Parker said the Part 36 offer should represent ‘at the very least a genuine and realistic attempt by the claimant to resolve the dispute by agreement’.

Birmingham County Court

Birmingham County Court

Source: Alamy

District Judge Griffith agreed the claimant had made a ‘tactical step’

The Gohil ruling is not binding but will set off alarm bells among lawyers who would previously have assumed that beating a Part 36 offer would always result in cost benefits.

In this case, the claimant had prepared a schedule of her fixed costs amounting to £4,937.07, and the defendant was ordered to pay costs and disbursements in that sum.

The issue arose because the claimant had made a prior offer to settle at £4,937. She then claimed the additional sums allowed through Part 36 on the basis she had beaten that offer.

The defendant accepted that claimant had obtained a judgment ‘at least as advantageous’ as her offer but submitted that the offer was not a genuine attempt to settle proceedings.

The insurer said that by offering 7p less than the final costs award, this was simply a ‘tactical ploy’ to them on risk of additional costs consequences.

Griffith said the reduction of 7p was ‘tantamount to asking the defendant to completely capitulate its position and was not a genuine attempt to settle the proceedings’.

The points of principle from Huck were considered good law and took precedence over other cases cited by the claimant.

The judge added: ‘The discount presented no real opportunity for settlement but appears to be merely a tactical step designed to secure the benefit of the [Part 36] incentives.’ He determined that the additional awards outlined in 36.17 did not apply.

 

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