Costs News

16 January 2020
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Part 36 uplift is 10% or nothing, rule committee decides

The 10% uplift on costs for beating a part 36 offer is ‘all or nothing’ and judges cannot award less, the Civil Procedure Rule Committee (CPRC) has confirmed.

At its meeting in November, the committee left in place Mr Justice Stewart’s ruling last year in JLE v Warrington [2019] EWHC 1582 (QB).

The issue was brought to the attention of the CPRC’s lacuna sub-committee after Stewart J effectively overruled the decision of Deputy Master Friston – author of Friston on Costs – in White v Wincott [2019] EWHC B6 (Costs).

In JLE, Stewart J – speaking obiter – noted that rule 36.17(4)(d) was “expressly prescriptive”, scaled down the uplift in higher-value cases and did not incorporate any ‘good reasons’ type of exception.

“One can see a very good policy reason for the present rule, as I interpret it, namely to discourage further satellite litigation on the appropriate extent of the additional award,” he said. “Further, there would be no points of orientation as to what would be a proper amount of reduction.”

In White, the deputy master recognised it was a difficult point but held that the court has power to award less than the specified 10% uplift on the sum awarded, but that it may not do so simply because it regarded the prescribed amount to be excessive.

The minutes of the CPRC’s November meeting, released just before Christmas, noted: “The ‘all or nothing’ approach lacks flexibility but may be more consistent with the underlying policy of part 36… It was recommended that the CPRC leaves the decision in JLE in place and this was agreed.”

The CPRC will liaise with the White Book and Green Book editors to incorporate relevant commentary on this.

The lacuna sub-committee also highlighted the question of rule 52.22 and the disclosure of part 36 offers on appeal. It was raised by Mr Justice Birss, following his decision in Ubbi v Ubbi 2019 EWHC 2333.

Rule 52.22 provides for non-disclosure of part 36 offers on appeal (and on applications for permission to appeal), whether made on appeal or in the court below, “until all questions (other than costs) have been determined”. An exception is if they are relevant to the substance of the appeal.

However, the CPRC heard that where both a merits and costs ruling were appealed, this was often done in a single notice of appeal with a single set of grounds. A single appeal bundle was prepared that included the part 36 material. The CPR are silent on this situation.

The CPRC decided to amend rule 52.22(1) to add “unless the appeal court otherwise orders”. This will come into effect in the next update in April.

Further, Birss J and John Dagnall – a barrister member of the CPRC – would liaise regarding whether to make any recommendations “regarding the more general issues of both theory and practicality as to the revealing or not revealing of offers made in proceedings in the court below the appellate court”.

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