CLAIMANT ENTITLED TO COSTS TO BE ASSESSED AFTER LATE ACCEPTANCE OF A PART 36 OFFER: EVEN THOUGH FIXED COSTS APPLIED AT THE TIME THE OFFER WAS MADE
I am grateful to barrister Thomas Mason for drawing my attention to the judgment today in Laura Attersley v UK Insurance Limited
[2025] EWHC 884 (KB). Mrs Justice Stacey decided that a claimant, who had accepted a Part 36 offer late, was entitled to costs to be assessed up to the date of expiry of the relevant period. The claimant could recover costs to be assessed even though the matter had not been allocated at the time the Part 36 offer had been made.
(Photo by Mateusz Klein on Unsplash)
“I agree with the conclusion of the judge below that the fixed costs regime is disapplied retrospectively on allocation to the multi-track for the reasons he states at [14] and [15] of his judgment. This is clear from the wording proposed by Briggs LJ in Qader [56] and adopted; the fixed recoverable costs only apply “for so long as the claim is not allocated to the Multi-Track”. The effect is then, that costs payable when the Part 36 offer were accepted are costs on the standard basis.”
KEY PRACTICE POINT
Overall, it has to be remembered, this is a case where the claimant was late in accepting a Part 36 offer. In most cases where an offer is accepted late this means that the claimant will be paying the defendant’s costs from the date of the expiry of the offer. There is a procedural victory here, but for many claimants in could be pyrrhic one.
(The issues relating to the risks posed by early Part 36 offers are explored in a webinar on the 21st May 2025 “What to do if the defendant makes an early Part 36 offer 2025”, booking details are available here.)
THE CASE
The claimant was injured in a road traffic accident. A claim was submitted under the RTA Protocol. It later exited the Protocol following the defendant’s request. Liability was admitted. Proceedings were issued in February 2021 using a Part 7 claim. A Defence was filed in March 2021 and, at the same time, the defendant made an offer to settle of £45,000. The case was allocated to the multi-track in January 2022. In July 2022 the claimant accepted the defendant’s Part 36 offer.
THE ISSUE
The defendant’s part 36 offer was made before the matter was allocated to the multi-track but accepted after allocation. The issue before the court was a simple one. Was the claimant entitled to assessed costs up to the date of the expiry of the relevant period or was her claim confined to fixed costs?
THE JUDGMENT AT FIRST INSTANCE
The Circuit Judge held that the claimant was entitled to fixed costs. Those costs being those applicable to the stage at which the relevant period for acceptance of the Part 36 offer expired.
THE CLAIMANT’S SUCCESSFUL APPEAL
The claimant’s appeal on this issue was successful.
THE ISSUES
Mrs Justice Stacey set out the key issues.
“2. The narrow issue in the appeal is whether the claimant was entitled to either fixed costs, or costs assessed on the standard basis, up to the point of the expiry of the relevant period of a Part 36 offer that she had accepted late. Her claim had been commenced under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (£1,000- £25,000) (“the RTA Protocol”). At the defendant’s request the claim exited the RTA Protocol since liability was initially disputed. The claimant subsequently issued Part 7 proceedings claiming up to £150,000 damages, whereupon the defendant made a Part 36 offer for £45,000, long before the Part 7 claim was allocated to a track. The claim was subsequently allocated to the multi-track and the following year the claimant belatedly accepted the Part 36 offer. The claimant contends that she is entitled to her reasonable costs on the standard basis up to the expiry of the Part 36 offer in accordance with CPR 45.29B, in force at the material time, whilst the defendant submits that the claimant is only entitled to her fixed costs up to that date, pursuant to CPR 36.20, as it was then in force(Footnote:2). The case raises the issue of how to resolve the tension between the wording of CPR 45.29B, as amended after the case of Qader v Esure [2017] 1 WLR 1924 and Part 36.20(4) which was not amended post Qader. At the time of acceptance of the offer the case had been allocated to the multi-track per rule 45.29B, but at the time when the offer was made and at the time for accepting the Part 36 offer (without incurring costs consequences) had expired, the case had not been allocated to the multi-track, although it had exited the Protocol at the defendant’s behest.”
FIXED COSTS DID NOT APPLY: ALLOCATION TO THE MULTI TRACK HAD “RETROSPECTIVE” EFFECT
Mrs Justice Stacey held that, on construction of the rules, the claimant was entitled to costs to be assessed and not fixed costs. Once the matter was allocated to the multi-track the claimant was entitled to costs to be assessed up to the date of expiry of the relevant period.
“67. I agree with the conclusion of the judge below that the fixed costs regime is disapplied retrospectively on allocation to the multi-track for the reasons he states at [14] and [15] of his judgment. This is clear from the wording proposed by Briggs LJ in Qader [56] and adopted; the fixed recoverable costs only apply “for so long as the claim is not allocated to the Multi-Track”. The effect is then, that costs payable when the Part 36 offer were accepted are costs on the standard basis.
68. In this case, although it was thought, and no doubt hoped by Ms Attersley that her injuries would resolve relatively quickly and the issues would be neither large nor complex, with the inevitable consequence that damages would be relatively modest at less than £10,000, nearly three years later that turned out not to be the case. The early optimism 10 days after the accident was not justified with the benefit of hindsight. When the case was allocated to the multi-track permission had been granted for 10 experts to give evidence at a five day hearing and quantum of £150,000 was claimed. When the claim was issued under Part 7 it had all the hallmarks of a multi-track case and there was no surprise when it was duly allocated to that track. However, the claim properly entered the RTA Protocol when it first did so very shortly after the accident. It had grown in value since. Its increased value was recognised by the defendant when the £45,000 Pt 36 offer was made and liability admitted.
69. As I have set out above Briggs LJ explained, “it was not in fact the intention of those legislating for this [the fixed costs] regime in 2013 that it should ever apply to a case allocated to the multi-track” [35(d)] (and see [54] set out above). There is no qualification in Qader to that principle as reflected in the amendment to rule 45.29B which was subsequently adopted by the rule committee. There is, it my mind, no reason why such an intention should not underlie an interpretation of Pt 36 since Part 36 is central to resolution of civil claims. Whilst Part 36 has long been recognised as self contained code, the interpretation of its terms is plainly to be considered in respect of the rules generally and the statutory intent. Mr. Roy’s contention that the general principle/aid to interpretation that the general (part 45) yields to the specific (Part 36) and reliance on Solomon does not assist him.
70. Do the authorities before and after Qader relied on by the defendant modify the position? The difficulty for the defendant is that none of them were about ex-Protocol cases that were, due to their complexity or increased value, suitable for the multi-track and none had been allocated to the multi-track once issued as Pt 7 claims. They all concerned either a “low-value road traffic accident” (Solomon), or other small or relatively modest type of claim that were always suitable for the fast track (Sharp). Sharp did not discuss the interplay between Pts 36 and 45, but concerned additional work undertaken by a claimant’s side in a pre-action disclosure application in a relevant Protocol case. Whilst the other cases relied on by Mr Roy concern the interplay between aspects of the fixed costs regime and Pt 36, they are all predicated on the cases properly being the type of case suitable for the fast track and the fixed costs regime by dint of their value and lack of complexity, unlike the facts here. The cases with specific Pt 36 points, such as how the indemnity principle for a party beating an opponent’s Pt 36 offer at trial would apply in fixed costs cases (see Solomon and Broadhurst v Tan [2016] 1 WLR 1928 (above) and also Hislop v Perde [2019] 1 WLR 201) are of little relevance or assistance to the facts here. They all concerned cases that were at all stages of the litigation suitable for the relevant Protocol, the fast-track and thus fixed costs and were cases to which Pt 45 applied.
71. Whilst it is the statute and the rules, not the textbooks, that are to be interpreted, it is informative to see what the leading textbooks say, better to understand the implications of the Qader amendment to CPR 45.29B given the specialist and technical nature of the issue. In its commentary of claims which no longer continue under the protocols (Part 45 section IIIA) Cook on Costs, 2025 chapter 44 paragraph 54 says as follows:
“44.54
It used to be the case that a clamant could escape any fixed costs structures if he could leave the Portal (which many cases did) and, in RTA cases, get to issue proceedings so as to leave the predictable costs regime (in Section II) behind as well. Thereafter, with the exception of the trial costs (which were generally there simply to pay counsel’s fees anyway) the solicitor was on to payment by the hourly rate. Section IIIA means that this is no longer so for the great majority of cases. Allocation to the multi-track rather than the fast track is however sufficient: Qader v Esure Services Ltd [2016] EWCA Civ 1109. The Court of Appeal were obliged to read extra words into CPR 45.29B to achieve the intention of the rule makers as perceived by the Court. The Rule Committee promptly added the same words to the rule.”
72. The authors of Cook have not suggested any qualification to the principle in Qader that would support the defendant’s argument. In its commentary on Qader Friston on Costs (4th Edition) reaches the same conclusion: “CPR, Part Section IIIA does not apply to claims, that, having ceased to continue under the relevant Protocol, have been allocated to the multi-track” [50.233]. Both leading publications therefore support the claimant’s submissions.
Literal interpretation
73. I did not understand either side to be pressing the argument that there was only one literal interpretation possible, which was each of theirs respectively, and have therefore focussed on a purposive construction. But in case I have misunderstood and in order to address all the arguments before me I will consider the matter in the alternative to see if the defendant’s interpretation is the one and only possible plain and natural meaning of the words. Is the defendant’s interpretation the clear and unambiguous meaning to and Section IIIA r 45.29A and B read with r. 36.13 and 36(20)(4)?
74.The general rule set out in 45.29A that cases that have started in, but have then exited a relevant Protocol, are subject to the fixed costs regime is subject to an exception if and once a case has been allocated to the multi-track: the fixed costs regime applies only “for as long as the case is not allocated to the multi-track.” (CPR 45.29B). It therefore follows that on allocation to the multi-track costs fall to be assessed in accordance with Pt 44 and are not fixed and calculated by reference to the tables. So far so good for a plain and ordinary meaning to be gleaned from the words from a literal interpretation. But when the provisions of Part 36 come into play and the general rule as to the costs consequences of the timing of acceptance of a Part 36 offer does not apply “where the recoverable costs are fixed by these Rules” (36.13(3)) it becomes a little harder to follow. The wording of CPR 36.20(1): “This rule applies where – (a) a claim no longer continues under the RTA or EL/PL Protocol pursuant to rule 45.29A” does not refer to rule 45.29B. Mr Roy describes this as an unambiguous and unqualified self-contained definition of the scope of CPR 36.20 and is therefore not subject to CPR 45.29B.
75.I am however dubious about Mr Roy’s literal construction points. An equally possible, and to my mind more natural reading of the provisions arrives at the contrary conclusion. The plain and natural meaning of the words of 45.29A and B is that the general rule that cases that have started in, but then exited a relevant Protocol are subject to the fixed costs regime (45.29A), is subject to an exception when a case has been allocated to the multi-track. The fixed costs regime applies only “for as long as the case is not allocated to the multi-track.” (CPR 45.29B). It therefore follows that on allocation to the multi-track costs fall to be assessed in accordance with Pt 44 and are not fixed and calculated by reference to the tables. When a Part 36 offer is made, the provisions of Part 36 come into play. The general rule as to the costs consequences of the timing of acceptance of a Part 36 offer are set out in Pt 36.13. The general rule does not apply where the recoverable costs are “fixed by these Rules” (36.13(3)). Part 36.20 is one such exception to that general rule where Section IIIA of Part 45 applies. The wording of CPR 36.20 is explicit, it sets out the “Costs consequences of acceptance of a Part 36 offer where Section IIIA of Part 45 applies”. However, since the effect of 45.29B is to disapply the fixed costs regime where an ex-Protocol case has been allocated to the multi-track, section IIIA of Pt 45 does not apply. It is therefore an exception to the exception and costs fall to be assessed under the principles in r. 36.13.
76. Under the principles in 36.13, the claimant was therefore entitled to her costs to be assessed up to the end of the relevant period. CPR 36.20 did not therefore apply to this case at the moment when the Pt 36 offer was accepted.
77. I do not accept Mr Roy’s argument that the combination of the heading of Section IIIA –
“Claims Which No Longer Continue Under the RTA or EL/PL Pre-Action Protocols”
and the scope and interpretation rule 45.29A(1) that:
“Subject to paragraph (3) [which has no application here]…this section applies – (a) to a claim started under… the RTA Protocol…where such a claim no longer continues under the relevant Protocol”
means that CPR 45.29A should be read as being subject to CPR 45.29B, so that the fixed costs provisions continue to apply to a case which had been allocated to the multi-track. The reference in CPR 45.29A to “this section” refers to all of IIIA and thus includes CPR 45.29B which is part of that section. CPR 45.29B specifically creates an exception for ex-Protocol cases if they have been allocated to the multi-track and only once they have been allocated to the multi-track, which applies in this case.
78. Mr Roy notes that 45.29A is entitled “scope and interpretation” and that within the wording of 45.29A itself, an exception is identified to s.IIIA. It is a reference to rule 45. 24: a failure to comply or electing not to continue with a relevant Protocol. Surely, he argues, if it was intended for 45.29B also to be an exception it need to be set out in 45.29A. But it is a false analogy because 45.24 is not part of “this section” i.e. IIIA and if it had not been referred to in Section IIIA it would not have been excluded from the scope of IIIA. 45.29B, by contrast is part of s.IIIA and there was no need to refer in 45.29A to the exception contained in 45.29B. A purist might argue it would be otiose.
79. If one was relying on literal construction alone, it seems to be plain that Part 36.20 was intended to reflect the effect of IIIA of Part 45 and that a claim which has been allocated to multi-track would no longer be subject to fixed recoverable costs. It would perhaps have been clearer and avoided some of the argument if there was an express reference in CPR 36.20 that claims that come within 45.29B are excluded from 36.20 and fall back into the general rule in 36.13 and saved much of the argument in this case, but it is not fatal to the claimant’s argument. That may be something that the Rule Committee wishes to consider for the purposes of greater clarity but since the issue appears not to have arisen in any other cases since the introduction of the Jackson reforms 12 years ago it may not be necessary. The defendant’s argument on literal interpretation therefore also fails.
80. As to the argument that the specific provisions of Pt 36.20 take precedence over the general provisions of Pt 45, on my reading and interpretation of both rules, they marry up and mesh together satisfactorily on a close reading, so it is not a question of one rule trumping another – since, as properly read, they are consistent with each other. The dicta in Solomon is of no help to the defendant since the rules are not in conflict with each other.
81. I therefore conclude that both on a purposive and also a literal reading of the rules where an ex-Protocol case is allocated to the multi-track, it comes out of Section IIIA by the wording of CPR 45.29B and Part 36(20) does not apply.
82. Ground 2 was argued in the alternative. Since the appeal has been successful on ground 1, ground 2 falls away and I do not propose to deal with it.
Defendant’s Respondent’s Notice (indirect fixed recoverable costs)
83. The defendant submitted that even if fixed costs did not apply directly, this court should uphold the judge’s decision for a different reason: by exercising its discretion to assess the claimant’s costs at a level equivalent to fixed costs, relying on the authority of Williams, discussed above at [47]-[49]. Since fixed would have applied had the claimant had acted as she should have done, by accepting the Pt 36 offer within the relevant period, then the claimant’s costs should have been assessed under Pt 44 at a level equivalent to fixed costs, thus indirectly applying the fixed costs regime.
84. Williams concerned very different facts and an entirely different provision of the rules in CPR 45.24 – where there has been an unreasonable failure to follow a relevant Protocol. But more importantly it concerned an indirect application of fixed costs in an assessment. In this case the judge below did not find unreasonable conduct by the claimant in the timing of the acceptance of the Pt 36 offer and I do not consider that it is open to me to make such a finding. The judge thought the claimant may be able to establish exceptional reasons. His concern that this might avail the claimant in the circumstances of this case to my mind plainly make it inappropriate for me to penalise the claimant in the way suggested.
85. There does not therefore appear to be a good reason to deprive the claimant of costs on the standard basis up to the expiry of the relevant period.
86. There is a different question as to whether, on assessment, some of the costs claimed were unreasonable, as was suspected might be the case by DDJ Balchin at the CMC on 5 January 2022. The proposition in Williams – that a claimant who unreasonably fails to follow a relevant Protocol thereby incurring a higher level of costs than would be awarded on a fixed costs basis will be restricted under Pt 44 to the costs they would have been awarded under Pt 45 – does not however read across by way of analogy to late acceptance of a Pt 36 offer after an ex-Protocol case has been allocated to the multi-track. The self-contained code in Pt 36 has its own sanction for late acceptance of a Pt 36 offer of depriving the successful party of their costs beyond the relevant period as set out in 36.13.
87. I allow the appeal. The claimant’s costs must now be assessed, if not agreed, up to the end of the relevant period on the standard basis in the normal manner under Part 44 in the County Court at Southend where both parties will be able to make the various points they wish to rely on and appropriate findings can be made. It is not appropriate for this court to lay down any guidance, general principles or presumptions about how the assessment of costs in cases of this nature should be conducted.