The recent case of Soares v Wilson has important implications in relation to the wording used about costs when finalising settlement. On the fact of it the agreement was straightforward.

It was a Personal Injury claim in which proceedings were continuing and where liability and quantum were in issue.

The Defendants offered £9k in settlement plus the – “Claimant’s fixed costs and disbursements.”

The claimant responded as follows – “Please note that your offer in the sum of £9,000 plus fixed costs (pursuant to the Fast Track fixed costs regime is accepted.”

So the terms were agreed and everyone was happy. But from this point it all became a bit messy! There followed correspondence about the best way to deal with the court action. It was agreed that the Defendant would send a Part 36 offer which, when accepted, would cause the proceedings to be stayed. This was done.

When it came to assessment of the costs the Claimant’s solicitors submitted a bill that was not limited to fixed costs. They argued that the acceptance of the Part 36 offer effectively ‘trumped’ any reference to fixed costs. Not surprisingly this resulted in litigation. At first instance the District Judge agreed with the claimants that the Part 36 provisions prevailed.

The appeal came before HHJ Luba who reversed the decision. It was apparent that terms had been agreed in correspondence that damages would be paid in the sum of £9k and the costs would be ‘fixed’. This was concluded before the Part 36 was made. The learned judge noted that if the claimant’s solicitors had wanted to recover standard costs it was open to them to have included this in any negotiations. In fact, the opposite was the case. They had accepted the defendant’s offer, with out condition, – “plus fixed costs”

The use of Part 36 was – ‘simply a mechanism by which the parties could have the proceedings stayed.’
The parties had agreed terms which specifically provided for fixed costs. The use of Part 36 was for administrative purposes. It was certainly not designed to enable the Claimant’s solicitors to receive more costs than they had accepted.

The case is reported on by Gordon Exall at –

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