Winning and losing under Part 36

Part 36 does provide for certain costs consequences in certain circumstances, unless the court considers it unjust to make such orders. The courts, following Carver v BAA Plc, will be more willing to take non-monetary factors into account in determining whether an offer or judgment is "more advantageous" and whether the usual costs rules should apply. Consider the following in all cases:

• Review any Part 36 offer you have made, or received, at key stages in the litigation such as following disclosure, exchange of experts' reports, exchange of witness evidence, as a party's case can change and any offer already made may subsequently look more or less reasonable.
• Withdraw any offer that looks inappropriate and consider replacing it with a new one. Remember that until withdrawn, an offer remains on the table and available for acceptance.
• Be prepared, following trial, if the judgment sum and offer are at all close, to take issue with, or defend, a proposal that the "usual" costs consequences of Part 36 should apply. "Closeness" will be relative to the facts and circumstances of the particular case.
• Don't exaggerate your claim. This is one area that the courts are clamping down on in relation to costs awards where exaggeration has meant that a reasonable offer has not been accepted when, on a proper valuation of the claim, it should have been.
• Non-money issues can be considered even in purely monetary claims. Lost management time, irrecoverable costs, the stress of preparing for and attending to give evidence at trial are all factors that can be taken into account in determining the value of the offer or judgment sum.
• Finally, as emphasised by this judgment and numerous others before it, consider alternative dispute resolution (ADR) to settle disputes. Parties who fail to do so will be penalised by the courts in costs if that refusal is later deemed to be unreasonable. This will be the case whether there has been a Part 36 offer or not.