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costs consequences caution when making last minute Part 36

15 August 2014

The judge ruled in Elsevier Ltd v Munro [2014] EWHC 278 that it would be ‘unjust’ to order the defendants to pay additional costs under CPR 36.14(3)(d) where the claimant had made a Part 36 offer close to trial. The offer expired on the day the defendants received the claimant’s witness statements and it was argued that there was not enough time to negotiate in light of the pace that proceedings were advancing.

The Part 36 offer was refused but not bettered at trial and as injunctive relief had been granted, was not a money claim. The judge held it would be ‘unduly harsh to criticise’ the defendants and ordering an additional amount of costs would be unfair and not the intention of the rules.

The judgment illustrates that where a Part 36 offer is made very close to trial and cannot be properly considered by the other party, costs consequences under CPR 36.14 will not necessarily follow and parties should be wary of this when making a last ditch attempt to settle before trial.

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