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Hemming & Others v Westminster City Council, Queens Bench Division Administrative Court, 12 June 2012

12 July 2012
The issues

Part 36 – costs – Part 36 offer

The facts

The claimant trading as Simply Pleasure Ltd was the licensee of a sex shop. He had contested an issue against the local authority challenging the amount that was charged in respect of the annual license fee. He made an offer under Part 36 on 21 March 2011, which expired ten days before he issued his claim. When the matter came to court, the court made an order at least as advantageous to the claimant as the proposals contained in the Part 36 offer. The court was therefore required by Rule 36.14(3) to award interest unless it considered it unjust to do so; and to award costs on an indemnity basis from the date at which the offer expired. The council argued that the claimant should not receive those additional elements of costs on the basis that acceptance of the Part 36 offer required it accept an important principle that it did not wish to concede, namely that the effect of the Provision of Services Regulations 2009 was to prohibit them from reflecting the costs of investigating and prosecuting persons who operated sex establishments without a license, in the licence fee itself and that was too an important a principle for the council to concede bearing in mind that it could apply to any licensing system anywhere in the country in which unlicensed traders operated.

The decision

The Part 36 regime was intended to encourage defendant‘s to accept appropriate offers of settlement. The council acceptances of the offer did not require them to accept any principle at all but merely to agree a fee with the claimants for a license to the calculated without reference to the costs of taking enforcement action against unlicensed traders.

Acceptance of the offer would not have created any precedent because it could have been treated as the council’s willingness on this occasion to compromise a claim without prejudice to the stance it might adopt in other cases. It was therefore not unjust for the consequences provided for by Rule 36.14(3) to follow.

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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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