PART 36 ANTI-CLAIMANT BIAS CONTINUES

PART 36 ANTI-CLAIMANT BIAS CONTINUES

In Gulati and Others v MGN Ltd [2015] EWHC 1805 (Ch)

the Chancery Division of the High Court held that where a claimant’s Part 36 offer had been withdrawn and then beaten at trial it was not appropriate to award the claimant indemnity costs in the absence of otherwise unreasonable conduct which would attract an indemnity costs award in any event.

The court’s general costs discretion under CPR 44.3 did not justify an award of indemnity costs absent such unreasonable conduct.

The court distinguished the decision in The Trustees of Stokes Pension Fund v Western Power Distribution (South West) plc [2005] EWCA 854

where the Court of Appeal allowed an inoperative Part 36 offer – no money had been paid into court as then required – to have Part 36 effects.

It also refused to apply CPR 44.2(4)(c) which allows a court to take non Part 36 offers into account and give them the same effect as Part 36 offers.

Comment

This is another fundamentally flawed decision reflecting the courts’ anti-claimant bias when it comes to Part 36.

Here, as before, the court is equating indemnity costs orders with misconduct. That is not the case when a claimant matches or beats its own Part 36 offer; it is merely a device to give claimants an incentive to make such offers and defendants to accept such offers.

It is no more punitive and requiring of misconduct than the fact that a successful claimant has to pay the unsuccessful defendant’s costs if it fails to beat a defendant’s Part 36 offer.