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Crosbie v Stephen Munroe, Court of Appeal, 14 March 2003

10 September 2003
The issues

Costs – costs only proceedings – the effect of offer to settle costs.

The facts

The Claimant was involved in a road traffic accident, which settled on the 8th January 2001 for £1,500.00 before proceedings were issued. On the 25th January 2001, a Bill of Costs was served totalling £4,089.25. On 16th January 2002, the Defendants made an offer under CPR 47.19 offering “an all-inclusive sum of £2,650,00 in respect of your profit costs, disbursements, VAT and interest. On 5th February 2002, an offer was made in the Part 8 Proceedings for Detailed Assessment. The following day, the Claimant’s Solicitors wrote to accept the offer but stated, “the only outstanding issue was the costs of the Part 8 Proceedings, details of which we will let you have shortly. The Defendant’s Solicitors argued that the Part 47 Offer covered all proceedings, including the Part 8 Proceedings (whilst at the same time making a counter offer in respect of those costs). The matter came before the District Judge who agreed with the Defendant, holding that the correspondence indicated a conclusive final and total offer to settle the matter and disallowing any costs of the Detailed Assessment proceedings. The Claimant appealed to the Judge, who upheld the decision of the District Judge. The Claimant appealed to the Court of Appeal.

The decision

1. Until the time the substantive claim is settled proceedings relate to liability and the amount of any compensation.

2. After the substantive claim is settled proceedings relate to the assessment of the costs the paying party has to pay.

3. Thus “costs of the proceedings within the meaning of CPR 47.19 relate only to the costs leading up to the disposal of the substantive claim. They are the proceedings which gave rise to the Assessment Proceedings. The Assessment Proceedings cover the whole period of negotiations about the amount of costs payable through the Part 8 Proceedings to the ultimate disposal of those proceedings, whether by agreement or Court Order.

Appeal allowed

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