Omya UK Ltd v Andrews Excavations Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Roger ter Haar,Mr Roger Ter Haar |
| Judgment Date | 19 July 2022 |
| Neutral Citation | [2022] EWHC 1882 (TCC) |
| Docket Number | Case No: HT-2020-000107 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2022] EWHC 1882 (TCC)
Mr Roger Ter Haar QC
Sitting as a Deputy High Court Judge
Case No: HT-2020-000107
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Rolls Building
London, EC4A 1NL
Ian Bridge and Adam Porte (instructed by Geldards LLP) for the Claimant
Philip Sissons (instructed by Gentle Mathias LLP) for the Defendants
Hearing dates: 1 July 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment will be handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archive. The date and time for hand-down is deemed to be Tuesday 19 th July 2022 at 10.30am
Mr Roger Ter Haar QC
Mr Roger ter Haar QC:
In this action judgment was handed down remotely under the Covid-19 Protocol on 17 December 2021. This judgment deals with consequential matters. It will be apparent that there has been considerable delay between the handing down of judgment and the argument on the consequential matters (and therefore this judgment). This arose because of difficulty in finding a date convenient to myself and counsel.
In the judgment handed down, I held that both Defendants were liable to the Claimant in the sum of £765,094.40 (the full amount claimed by the Claimant).
Since that judgment was handed down, the Defendants have paid the judgment sum in full, and have paid £300,000 on account of costs.
The following matters now arise for decision by me:
(1) Whether the consequences as set out at CPR r 36.17(4)(a)-(d) apply pursuant to the Claimant's Part 36 Offer dated 12 June 2020;
(2) Insofar as not determined by the answer to question (1), whether costs should be assessed on the standard or the indemnity basis;
(3) What interest rate should apply;
(4) Whether I have jurisdiction to grant the Defendants permission to appeal;
(5) If the answer to question (4) is that I do have jurisdiction, should the Defendants be granted permission to appeal;
(6) Who should pay the costs of the application for a freezing injunction dated 14 October 2021, and upon what basis should such costs be assessed;
(7) Should I discharge the freezing injunction?
The Claimant's Part 36 offer and its consequences
CPR 36.17 (1) (b) applies where a claimant obtains a judgment against the defendant that is at least as advantageous as the proposals contained in a claimant's part 36 offer.
The Defendants accept that my judgment awarding £765,094.40 to the Claimant exceeds an offer made by the Claimant on 12 June 2020 in the sum of £756,287.05. The Defendants say that the judgment exceeded the Claimant's offer “albeit by a very small margin”.
By CPR 36.17 (4) in these circumstances the Court, must, unless it considers it unjust to do so, order that the Claimant is entitled to interest at an enhanced rate (not exceeding 10% above base rate), costs on the indemnity basis, interest on those costs at an enhanced rate and an additional amount calculated as a specified percentage of the sum awarded in damages.
CPR r 36.17 sets out five factors the Court must take into account whether it would be unjust to make the normal order, namely:
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made;
(d) the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated; and
(e) whether the offer was a genuine attempt to settle the proceedings.
The principal point taken by the Defendants is the contention that the offer relied upon the Claimant was not a genuine attempt to settle the proceedings.
In paragraphs 8 to 12 of his skeleton argument, Mr. Sissons, for the Defendants, argues as follows:
8. In assessing whether an offer was a genuine attempt to settle, it is not appropriate for the judge to embark on a mini-trial to try and assess how the parties might have assessed the risks at the time the offer was made. However, the purpose of the rule is to avoid the potential abuse involved in a claimant making a very high offer in a binary case, simply with the aiming of securing the additional benefits of CPR 36.17 (4) in the event of victory. As Jonathan Parker L.J. explained in Huck v Robson [2003] 1 WLR 13 at [63]:
“ a claimant's Part 36 offer must represent at the very least a genuine and realistic attempt by the claimant to resolve the dispute by agreement. Such an offer is to be contrasted with one which creates no real opportunity for settlement but is merely a tactical step designed to secure the benefit of the incentives….”
9. In the same case, Schiemann LJ said (at [81]):
“ I do not consider that Part 36 was intended to produce a situation in which a claimant was automatically entitled to costs on the indemnity basis provided only that he made an offer pursuant to rule 36.10 in an amount marginally less than the claim.”
10. An offer is only to be regarded as a genuine attempt to settle, if it involves “some genuine element of concession on the part of the claimant, to which a significant value can be attached in the context of the litigation” ( AB v CD [2011] EWHC 602, per Henderson J at [22] (Emphasis added)).
11. In the circumstances of this case, C's offer ought not to be regarded as a genuine attempt at settlement because:
(a) The offer was to accept a discount of just £8,806.95 (1.15%) against the amount claimed
(b) Even if interest is taken into account the offer was still derisory. At the date offer was made the accrued interest assuming a (generous) commercial rate of 2.5% was £33,957.23. On this basis the offer was to accept 95% of the total amount claimed inclusive of interest.
(c) Accordingly, in the context of the total value of the claim, the concession offered cannot realistically be regarded as having any significant value.
(d) There was no explanation as to how the offer was calculated. It did not involve any assessment of litigation risk but merely discounted a very small and apparently arbitrary amount from the total claim. This suggests a tactical attempt to catch Ds on the hook of Part 36 rather than a genuine effort at settlement.
(e) This case was always a binary one; C would either recover the whole of the sum claimed or nothing at all. The offer did not reflect a possible outcome of the litigation. Accordingly, the amount offered created no real inducement or incentive for acceptance.
12. Furthermore, the other factors referred to in CPR 36.17 (5) are either irrelevant to the facts of this case or also suggest it would be unjust to impose the full force of the additional sums/penalty interest. Thus, the offer required almost total capitulation and was made shortly after Ds had filed their Defence and, accordingly, long before there had been disclosure or the exchange of witness statements. This case turned on the facts rather than legal principle. At the date the offer was made, Ds did not know the quality or extent of the witness evidence which C would produce.
For the Claimant, Mr. Bridge and Mr. Porte for the Claimant argues as follows in paragraphs 14 to 17 of their skeleton argument:
14 Correspondence suggests [ 11/A193-A194, 11/A202–203 that Ds say the normal order should not be made as the offer was not a genuine attempt to settle the proceedings as it amounted to a very high percentage of the total sum claimed.
15 The court should avoid applying a strict mathematical approach to this issue as Ds appear to demand. Rather than devoting too much attention to the precise percentage concession, the court should take a broad-brush view informed by its own assessment of the strength of the case as to whether, in all the circumstances, the offer was in fact a genuine one to settle the claim.
16 The following extracts from the White Book at 36.17.6 give a flavour of the factors the courts have taken into account:
'In AB v CD [2011] EWHC 602 (Ch)… [the claimant made an] offer seeking 100% recovery…Henderson J refused to order Part 36 consequences, observing that the concept of settlement involved “an element of give and take” and that a settlement offer must involve some genuine element of concession. He castigated the “offer” in that case as a demand for “total capitulation”.
‘While 100% offers do not work, in Huck v Robson [2002] EWCA Civ 398; the majority of the Court of Appeal allowed the claimant's appeal and made orders under what is now r.36.17(4) in a personal injury claim where the claimant had made a 95% offer… The focus of the additional enquiry is as to whether the offer was a genuine offer to settle, and not on whether it was or was not “tactical”.’
‘In Jockey Club Racecourse Ltd v Willmott Dixon Construction Ltd [2016] EWHC 167 (TCC) a 95% was effective in an open-and-shut case. In JMX v Norfolk & Norwich Hospitals NHS Foundation Trust [2018] EWHC 185 (QB) Foskett J accepted that a 90% offer was effective, holding that 10% was not “a token discount” in a clinical negligence case likely to be worth several million pounds.’
‘In Rawbank SA v Travelex Banknotes Ltd [2020] EWHC 1619 (Ch) J accepted that a 99.7% offer was a genuine attempt to settle a very strong case where there was “clearly no defence” and success was a “near-certainty”.’
17 As set out in the 4 th witness statement of Paul Hackney [13/A26–29], the offer included some give and take and offered a significant discount to Ds....
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