Recently we reported on a rare example of the Court declining to grant the usual consequences of equalling or beating a Part 36 Offer, on the basis that it would be “unjust” (see CPR 36.17(3) and (4) for Defendants and Claimants respectively). You can find the article here. Following on from this, we have another case of the Court determining that awarding Part 36 consequences would be “unjust”.

 

In the recent case of Yieldpoint Stable Value Fund, LP v Kimura Commodity Trade Finance Fund Ltd [2023] EWHC 1512 (Comm), Stephen Houseman KC found that it would be unjust to grant the Claimant’s Part 36 consequences where the offer contained a minor concession in respect of the damages.

 

The Claimant was successful in its claim for repayment of $5 million plus interest and had made a prior Part 36 Offer for around 99% of the claim ($4,950,000).

 

At paragraph 13 of his judgment, Stephen Houseman KC stipulated:

 

“I am satisfied that the Part 36 Offer was not a genuine attempt to settle the proceedings when analysed in its proper context. On this basis, and in all the circumstances including those outlined in paragraphs 10-11 above and the fact that I summarily assessed Yieldpoint's trial costs at a figure representing 70% of the total claimed, I conclude that it would be "unjust" to grant Yieldpoint any of the enhancements in CPR 36.17(4)(a)-(d).”

 

The Judge did not consider the Part 36 Offer a genuine attempt to settle the claim, primarily because the claim itself seemed to be “all or nothing” and the Claimant had failed to provide sufficient information as to calculation of accrued interest at the relevant date as required by CPR 36.17(5)(c). The Judge went as far as to comment at paragraph 24: “A discount of 1% is meaningless in such context. It amounts to saying 'pay up now, accept that you are wrong'.” He considered that this did not create a meaningful chance of settling the dispute ahead of trial.

 

This case should not discourage any parties from making Part 36 Offers, however it is important to keep in mind that the Court’s appear to be more critical of what they interpret as a tactical step towards potentially higher costs recovery instead of a genuine attempt at dispute resolution.

 

You can read the Judgment here: https://www.bailii.org/ew/cases/EWHC/Comm/2023/1512.html