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Daniels v Commissioner of Police for the Metropolis, Court of Appeal, 20 October 2005

26 October 2005
The issues

Costs – Part 36 Offers – Unreasonable Conduct – Refusal to Negotiate

The facts

The Claimant was an Officer in a mounted police unit and was injured when she fell from her horse on a training course. She alleged that the Commissioner was negligent. She made three Part 36 Offers during the course of the action, each of which was rejected by the Defendant. Her solicitors made attempts to enter into negotiations.

These attempts were rebuffed. At Trial the Claimant lost. She was ordered to pay the Defendant’s costs. She argued that the Trial Judge should have departed from the general rule that costs follow the event in that the Defendant had behaved unreasonably in refusing to negotiate. The Defendant argued that it was reasonable to test the claim in Court because to settle it would have left it open to other similar claims.

The decision

In Halsey v Milton Keynes General NHS Trust the Court of Appeal held that a departure from the general rule that costs followed the event might be reasonable where it could be shown that the successful party had acted unreasonably in refusing to agree to a form of ADR.

ADR as a collective description could be extended to include any kind of negotiation between the parties direct or indirect.

It was hard to think of circumstances where a successful Defendant should be deprived of costs merely because it had rejected a Part 36 Offer. It was entirely reasonable for a Defendant, particularly a public body such as the police to contest what it considered to be an unfounded claim in order to deter other similarly unfounded claims.

Large organisations often made payments to buy off claims which they consider to be speculative to avoid the expense of contesting them. That habit coupled with the no win no fee funding procedure might be responsible for fuelling a compensation culture. The Defendants which routinely faced unfounded claims should be entitled to take a stand and contest them and Courts should be slow to characterise such conduct as unreasonable. This might mean in circumstances where the costs of the litigation are wholly disproportionate to the sums claimed.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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