Lord Dyson has ruled that assessed costs should trump fixed costs where claimants secure more than they had offered to settle for, and parliament had not intended to create a scheme to penalise claimants when it had established a fixed costs regime.
The Court of Appeal has heard two cases (Broadhurst & Taylor v Tan & Smith  EWCA Civ 94) concerning the interplay between part 36 and part 45, and clarified whether fixed costs apply if a claimant beats their own part 36 offer.
Since the introduction of the fixed costs regime for cases that fall out of the RTA and EL/PL portals, there has been much uncertainty as to whether fixed costs continue to apply if there has been an effective part 36 offer from the claimant.
It is now clear that:
‘If a claimant makes a successful Part 36 offer in a section IIA case, he will be awarded fixed costs to the last staging point provided by rule 45.29C and Table 6B. He will then be awarded costs to be assessed on the indemnity basis in addition from the date that the offer became effective.’
There is a clear tension between rule 45.29B and rule 36.14A (which is now CPR 36.17(b)). Part 45 states that the only costs to be awarded in section IIIA cases are fixed costs, whereas part 36 states that in such cases rule 36.14(3)(b) will apply.
It was accepted that the claimants in the current case were entitled under rule 36.14(3)(b) (now CPR 36.17(b)) to ‘costs on the indemnity basis from the date on which the relevant period expired’. However, the claimants argued that this meant that they were entitled to assessed costs and not just fixed costs. The defendants argued that costs meant the fixed costs in rule 45.29.
The Court of Appeal stated the following.
Costs expert Professor Dominic Regan commented on Twitter that it was a ‘stupendous result’ for claimants, while former Association of Personal Injury Lawyers president Matthew Stockwell said it was ‘difficult to overstate how important this is given the proposed extension of fixed costs’.
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