Small Part 36 win – Big Benefits

Hochtief (UK) Construction Ltd & Anor v Atkins Ltd [2019] EWHC 3028 (TCC)

The Claimants in this matter made a Part 36 offer of £875,000.00. The offer was not accepted by the Defendant and the matter proceeded to trial where the Claimant won damages of £802,475 and agreed interest of £77,372.00.

The Part 36 offer was beaten by £4,475.00.

The Defendant made an application to disallow the Part 36 consequences as it was unjust considering the amount by which the Claimant had beaten their Part 36 offer. The Claimant had also failed on one aspect of their claim The Defendant argued that the court should make an issues-based or proportional costs award on that basis.

Mrs. Justice O’Farrell ruled that it would not be unjust to apply the consequences of CPR 36.17 as the Claimant had achieved a judgment ‘at least as advantageous’ as their offer.

Any further costs order should only come following consideration of the “terms of the Part 36 offer, the stage in proceedings when it was made, the information available to the parties at the time, the conduct of the parties and whether the offer was a genuine attempt to settle proceedings.” 

In this matter, Mrs. Justice O’Farrell stated that:

“The terms of the offer were clear. The Part 36 offer was made at a very early stage in the proceedings, after the letter of claim but before the issue of the formal claim. By that time, extensive investigations and remedial works had been concluded.

“The offer was at a level that indicated it was genuine attempt to settle the dispute.”

A ruling was made in favour of the Claimant who was awarded an enhanced rate of interest on damages and costs from the date of expiry of the offer. Interest was set at 6% above the base rate, meaning the Claimant received an extra £65,123.00 on top of their award for damages. Costs were also awarded on the indemnity basis.

Following on from this judgement, it must be stressed that a well-placed offer made early in the proceedings can provide significant benefits – no matter how big the win.

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