Pre-action offers

Rosalind Huck v Tony Robson (CA TLR 21 March)

CPR Part 36.10 provides that if a person makes an offer to settle before proceedings are begun which complies with the provisions of the rule, the court will take that offer into account when making an order as to costs. In a road traffic accident in which it was likely the finding on liability would be either 50/50 or 100%, the claimant made a pre-action offer to accept a 95/5% split on liability. The defendant rejected the offer and the trial judge refused to take it into account in his award of costs on the grounds that the apportionment was ‘illusory’. The Court of Appeal disagreed. Although a judge would be entitled to exercise his discretion and refuse indemnity costs where an offer was purely tactical, for example, to settle for 99.9% of the full value of the claim, that could not be said of the claimant’s offer. The reduction of 5% provided the defendant with a real opportunity of settlement and did not represent the courts probable decision on liability. After applying the factors prescribed in rule 36.21 the court, by a majority, awarded the claimant her costs on the indemnity basis.