ANOTHER CASE WHERE THERE WAS AN INVALID PART 36 OFFER; NO RESPONSE TO OFFERS TO MEDIATE AND NEITHER PARTY RECOVERED COSTS

There is a brief report on Lawtel of the Court of Appeal decision in NJ Rickard Ltd -v- Holloway (CA 03/11/2015)*. It is an example of:

(i)the importance of making a valid Part 36 offer;

(ii)an example of the consequences of taking many bad points;

(iii) The profound danger of ignoring a request to mediate.

THE CASE

  • The claimant landlord claimed £6,000 rent arrears.
  • There was a counterclaim for breach of quiet enjoyment and disrepair.
  • The landlord made a “Part 36” offer that each side withdraw.
  • The offer specified 21 days but did not state that the landlord would be liable for the defendant’s costs if the offer was accepted.
  • At trial the claimant received only nominal damages. However the claimant’s claim for damage to the property was rejected. The claimant received a total of £16,000.
  • The judge at first instance stated that the Part 36 consequences should apply and ordered that the tenant pay the claimant’s costs up to the date of the part 36 offer and on the indemnity basis, with costs at 8% following the expiry of the relevant period.

THE DECISION IN THE COURT OF APPEAL

  • The claimant’s offer was not a valid Part 36 offer. It did not comply with r.36.5 (c)
  • This was a mandatory requirement.
  • Part 36 did not apply and the judge should have looked at the matter under CPR 44.
  • The claimant had taken much time unsuccessfully taking numerous points.
  • The defendant had won on important detailed points.
  • No dispute was intractable and the tenant had received no response to numerous requests for mediation.
  • Silence towards an invitation to engage in alternative dispute resolution was itself unreasonable.
  • The claimant had won on more issues than the landlord.
  • Although the landlord had succeeded financially the appropriate order was no order for costs.
  • The fact that costs incurred had been £85,000 and £100,000 was, in itself, worthy of comment and showed that there should be some form of limitation on costs.

* This post is based on the Lawtel Summary.

PART 36 – OFFERS TO SETTLE FORM AND CONTENT OF A PART 36 OFFER

36.5.

(1) A Part 36 offer must—

(a) be in writing;

(b) make clear that it is made pursuant to Part 36;

(c) specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs in accordance with rule 36.13 or 36.20 if the offer is accepted;

(d) state whether it relates to the whole of the claim or to part of it or to an issue that arises in it and if so to which part or issue; and

(e) state whether it takes into account any counterclaim.

RELATED POSTS

On Part 36 offers

On refusal to mediate

Cost orders

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