Part 36 gone mad?

In a recent statement to Parliament the justice minister Jonathan Djanogly announced that, in light of further recommendations from the Civil Justice Council, implementation of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 will include the following:

“There is to be an additional sanction to be paid where judgment for the claimant is more advantageous than a defendant’s part 36 offer. This additional sanction is to be calculated as 10% of damages where damages are in issue, and 10% of costs for non-damages claims”.

This is almost the exact opposite of what Lord Justice Jackson proposed:

“Where a defendant rejects a claimant’s offer, but fails to do better at trial, the claimant’s recovery should be enhanced by 10%.”

I am currently proceeding on the basis that the minister’s statement contains an obvious error. The alternative is too bizarre to consider. (Remember, Part 36 will apply to costs proceedings come April 2013.)

3 thoughts on “Part 36 gone mad?

  1. Djanogly and the Government are never wrong. :-)

    So… if a receiving party seeks costs of £50k and the paying party offers (part 36) £40k, which the receiving party rejects and matter proceeds to detailed assessment.

    The receiving party is awarded £46k on assessment and so gets paid £46K plus 10% of £4.6k making £50.6k in total (plus costs?).

    Cheaper to pay what they asked for in the first place.

  2. It seems to me like the Claimant has been stitched up once more, as he loses the QOCS protection if he fails to beat D’s offer.

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