Effect of Part 36 payment on interest

William John Henry Johnson v Gore Wood & Co [2004] EWCA Civ 14

The claimant obtained judgment against the defendant solicitors for damages for the cost of borrowings entered into in reliance on the defendant’s advice, but failed to better a payment into court by the defendant in 1994. On appeal the Court increased the amount of damages so that it exceeded the 1994 payment in, although taking into account interest calculated down to the date of trial, it had not beat a later 2001 payment. The fact that the defendant had contested every issue of trial, the circumstances of the claim and the litigation history were all relevant to deciding whether it would be unjust to award costs against the claimant following the date of the 2001 payment in. The claimant was awarded his costs up to the last date that the 2001 payment in could have been accepted, but he was ordered to pay only 50% of the defendant’s costs from that date. Further, the Court could not adopt a strained construction of the CPR in reliance on the overriding objective. The terms of CPR rule 36.19 admitted only one construction, namely that payments in could only be used on arguments as to costs and not on arguments as to interest on damages.