Claimant who beat her own offer by 7p penalised for 'tactical step'

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’.

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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