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I think this judgment is wrong.

The judge’s logic was that the parties had agreed that fixed costs would not apply. Crucially, since the claim had not actually been allocated to the MT, agreement between the parties was the only way in which this conclusion could follow. (I think this plainly correct). Now, the judge derived agreement primarily from the use of the specific words “...on the standard basis.”

In doing so, the judge distinguished the CA in Solomon v Cromwell, which had said, at [23]:

“In Solomon v Cromwell, both offers that finally resulted in the settlement of the claim were expressed to be made by reference to Part 36. Nothing further was said about the consequences of acceptance, apart from a willingness on the part of the defendant to pay the claimant‟s “reasonable costs” to be assessed if not agreed. There was nothing in either offer to suggest that the defendant was willing to incur a liability in costs beyond that for which the rules provide.”

(Note: the above is an extract from Solomon v Cromwell itself, not the instant case).

Thus, in Solomon, the defendant had agreed merely to pay reasonable costs to be assessed, whereas here the parties had gone further and explicitly agreed the defendant would pay reasonable costs on the standard basis.

This distinction is flimsy. By definition, an agreement to pay costs to be assessed is an agreement to pay costs on the standard basis (CPR 44.3(4)). The instant case merely says explicitly what Solomon said implicitly.

Furthermore, contrary to the judge’s analysis at [32], I see no real evidence the parties had this specific issue in mind at all at the time of acceptance of the Part 36. Rather, this looks far more like the parties merely agreeing standard wording without much thought - and then realising the possible implications later.

Even if I’m wrong about this (which I could be) I think a trip to the Court of Appeal to clarify the matter is beckoning...