Part 36 of the Civil Procedure Rules remains one of the most powerful tactics available to those involved in disputes. One thing that makes it so powerful is the combination of benefits and sanctions that concentrate the mind. This includes the 10% uplift that is available to a party which beats its own offer. Part 36.17 (1) covers the situation where a party achieves a result which is ‘at last as advantageous’ as the proposals contained in a part 36 offer. The rule provides for an uplift of 10% in relation to cases where damages do not exceed £500k.
This can be illustrated by one of our own cases. The substantive claim was a Multi-Track property boundary dispute that related to a right of way. The remedy provided by the Court was, amongst other things, the grant of an Easement and the repositioning of boundary fences. It ran for 51 months and there were two Defendant’s in the proceedings. It was important as it affected use and enjoyment of the property, as well as potential re-sale value.
Our client’s final bill came to £57k. There were criticisms of the other party’s conduct. The bill was contested and the case proceeded to a provisional assessment. We made a Part 36 Offer in the sum of £36k, which was not accepted. The court awarded £45k which meant that we had comfortably beaten our own offer. The 10% uplift applied, which added £4.5k to the costs. Interest at 10% was added to the total from expiry of our offer. The outcome was that the Defendants had to pay £58k. The failure to accept our offer was very expensive.
The court’s have recently had to consider the extent of any discretion in relation to the 10% uplift. In White & Anor v Wincott Galliford Ltd  EWHC B6 (Costs), Deputy Master Friston refused the uplift. Mark Friston is a leading authority on legal costs and author of Friston on Costs, the leading publication on the subject. In this case there was a dispute about hourly rates. The judge found in favour of a rate which had been proposed by the claimant under Part 36. The judge refused to allow an uplift of 10% on the whole of the claimant’s cost where the offer had been limited to one particular issue.
In the case of JLE v Warrington  EWHC 1582 (QB) Stewart J took a different view. He found that the 10% was ‘all or nothing’. It was prescriptive. If 36.17 (1) applies the court ‘must’ apply the uplift – ‘unless it is unjust to do so’.
At its November 2019 meeting the Civil Procedure Rule Committee (CPRC) agreed with Stewart J that court cannot award less than the 10% uplift.
This emphasises again the importance of making an early and carefully calculated Part 36 Offer as soon as possible.
At Cook Legal Ltd we will always advise on the most effective way of resolving costs disputes and achieving the best results for solicitors and clients.