Claimants limited to fixed costs even where Part 36 Offer accepted late

Under the Civil Procedure Rules it has been established for some time that where a claim is governed by the fixed costs regime of the Pre-Action Protocol for Low Value Personal Injury Claims and a Part 36 offer is accepted within 21 days neither party can recover anything other than the fixed costs provided for by that regime.

 It is also well established that where a claim which was subject to the Protocol fixed costs regime goes on to a trial and, by judgment, the claimant recovers more than a Part 36 offer, he/she is entitled to indemnity costs from the date the offer became effective.

 But what about the position where a defendant accepts the claimant’s Part 36 offer out of time so that the case does not go on to a trial? Does the case remain within the fixed costs regime of the Protocol restricting the claimant’s costs or can the claimant recover additional costs on either the standard or indemnity basis from the date when that Part 36 offer became effective?

 That was the issue which the Court of Appeal recently considered in the case of Hislop v Perde [2018] EWCA Civ 1726.

 The lead judgement was given by LJ Coulson (LJ King and LJ Longmore agreeing) and it was decided that even where the late acceptance of a Part 36 offer was substantial and with no apparent justification (in this case the offer was accepted over 18 months from when the claimant had made it) there was no automatic presumption that a defendant’s late acceptance would be regarded as exceptional and thereby triggering the “exceptional circumstances” provision set out in Civil Procedure Rules Part 45 which would have entitled the claimant to additional costs beyond the fixed costs.

 This is a positive decision for defendants and their insurers and one which preserves the benefits of the fixed costs regime.

 For further information, please contact Scott Yates.