The High Court has rejected the Home Office’s argument that it should pay nothing towards a claimant’s costs in a wrongful detention case during the nine months when settlement negotiations had stalled.

In Moradi v The Home Office the claimant had settled an unlawful detention claim for £15,000 at 5pm on the final working day before a trial was due to begin at the Royal Courts of Justice.

The defendant argued it should pay half the claimant’s costs up to its Part 36 offer expiring last December, and nothing for the subsequent period before the notional trial date.

That submission was dismissed by His Honour Judge Tindal, who said this was neither the most trivial nor most egregious case of failing to negotiate and suggested the claimant’s conduct had been ‘moderately unreasonable’.

Dorothy Moradi brought a claim after being detained for 46 days whilst pursuing her appeal against deportation and initially valued the claim at £30,000. The parties’ costs budgets were filed in autumn 2020, with the court agreeing to £70,500 for the defendant and £94,000 for the claimant.

Moradi had been keen to settle and in May 2021 proposed mediation herself. That was ultimately unsuccessful and the defendant made a Part 36 offer to settle for £10,000 in November 2021. It was not accepted and the offer expired.

With the trial date weeks away, the claimant made a counter-offer of £40,000, which was also rejected. The defendant tried again two working days before trial and the claimant finally accepted at the last minute.

Addressing costs, the Home Office submitted that had the claimant behaved reasonably by negotiating in December 2021, some £70,000 could have been saved – and all for the addition of an extra £5,000 in the settlement.

The claimant argued that she had recovered more than the Home Office was previously prepared to pay and so was the successful party, even if she did not secure what she regarded as the full value of the claim.

The judge noted that no explanation was given for the nine-month pause in negotiations but said there was ‘no automatic costs consequence from an unreasonable failure to negotiate’.

Comparing the costs with the settlement value, he added: ‘This was complex and important litigation where ‘proportionality’ cannot be equated with the value of the claim, which is only one proportionality factor, alongside importance and complexity.’

He ordered that the defendant pay the claimant’s reasonable costs up to 21 December 2021 and 66% of her reasonable costs thereafter.

 

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