The Court of Appeal in the conjoined cases of Hislop v. Perde and Kaur v. Ramgarhia Board  EWCA Civ 1726 has ruled that, in a fixed costs case, a claimant whose Part 36 offer is accepted late is restricted to the applicable fixed costs.
The application before Coulson J arose from two appeals concerned with the correct approach to costs in cases under the fixed costs regime “where the defendant eventually accepts, after they should or could have done, the claimant’s offer under CPR Part 36”. Hislop concerned a road traffic accident where an offer made by the defendant was initially rejected but thereafter accepted one week before trial, some 13 months later. The Deputy District Judge rejected the claim for indemnity costs and ruled that costs should be limited to fixed costs. On appeal, HHJ Walden-Smith found that costs should be assessed on the standard basis. Kaur concerned a public liability claim where the claimant made a Part 36 offer of £2,000 and, five months later, following receipt of a joint expert’s report and concerned about cost consequences, the defendant made a higher offer of £3,000 which was accepted. The Deputy District Judge ruled that the claimant was entitled to fixed costs to the date of allocation and, thereafter, costs on the standard basis. This matter was then ‘leap-frogged’ to be heard by the Court of Appeal alongside Hislop.
In considering the appeal, Coulson J found that the rules were clear and that they “expressly provided that, even though the fixed cost regime had brought about a number of specific modifications, the underlying rules in r.36.17 ... also applied to such cases.” As such, the CPR “expressly” preserved r.36.17(4) and made it “applicable to a claimant within the fixed costs regime”. Consequently, the Deputy District Judge’s finding in Hislop was restored and the claimant in Kaur was only entitled to fixed costs up to the point when she accepted the offer.
As stated by Coulson J, the approach certainly will “affect the costs outcome in many other cases”, however there is potential cause for concern that there is no encouragement for defendants to accept offers quickly.