Roxanne Pallett v MGN Ltd
| Jurisdiction | England & Wales |
| Judge | Mr Justice Mann |
| Judgment Date | 19 January 2021 |
| Neutral Citation | [2021] EWHC 76 (Ch) |
| Docket Number | Case No: BL-2018-002733 |
| Date | 19 January 2021 |
| Court | Chancery Division |
[2021] EWHC 76 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
BUSINESS LIST (ChD)
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
Fetter Lane
London EC4A 1NL
Mr Justice Mann
Case No: BL-2018-002733
David Sherborne, Sara Mansoori and Julian Santos (instructed by Hamlins LLP) for the Claimant
Benjamin Williams QC and Richard Munden (instructed by RPC LLP) for the Defendant
Hearing dates: 14 th and 15 th December 2020
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.
Introduction
This judgment deals with the costs of this action, which has now settled (apart from the costs aspect). The claimant has brought a claim against the defendant for infringement of privacy rights by mobile telephone voicemail interception and other unlawful information gathering techniques. Her claim was one of a batch due for trial in January 2021, but on 20 th October 2020 she made a Part 36 offer to settle for £99,500 and ancillary relief. The offer specified, as it had to, that if accepted within 21 days the defendant would be liable for her costs of the action. On the 22 nd day the defendant accepted the offer to settle at that sum, on the expressed basis that the court would be invited to deal with the extent to which it would have to pay costs. It claims that, since the offer was accepted outside the “relevant period” (here, 21 days) it was entitled to invite the court to consider its liability for the costs of the action and was not bound to pay those costs, which it would have been if it had accepted within the 21 days, pursuant to CPR 36.13(5). If it gets over that hurdle it invites the court to disallow the claimant's costs from 26 th March 2019 on the basis (putting it shortly) that the claimant did not engage properly in a settlement process. The claimant disputes the defendant's entitlement to have that ruling. She says that the Part 36 offer was accepted and the defendant was not entitled to introduce the qualification which it did. If it was then there is no justification for departing from the sort of costs order in her favour that would follow from acceptance of the Part 36 offer within the relevant period (21 days).
The following questions arise in relation to this matter:
(a) Is the defendant entitled to accept the part 36 offer in the manner which it did?
(b) If so, did its conduct amount to an acceptance?
(c) If so, does that acceptance have the effect in principle contended for by the defendant?
(d) If so, should the court exercise its discretion on costs in the manner proposed by the defendant?
The offer and acceptance
The immediate circumstances of the offer and acceptance were as follows.
The offer was made against a background in which the defendant and the claimant had both made offers of settlement. The offers of the defendant (to which I will come) were of varying amounts from time to time and their common theme was that they offered only the costs prior to one or other of two dates relatively early in the action. The offers of the claimant always sought the payment of all her costs.
The Part 36 offer which was accepted or purportedly accepted was in the following terms (so far as relevant):
“1. Our client will accept the sum of £99,500 by way of damages in full and final settlement of her claim. The Offer relates to the whole of the claim and takes into account any counterclaim [there was no counterclaim];
2. [undertaking not to commit further wrongs]
3. Your client will pay our client's costs … of the claim, such costs to be assessed on the standard basis if not agreed.
This offer is being served by email and the date of service is 20 October 2020. Pursuant to CPR 36.5 (1)(c), our client specifies a period of 21 days within which your client will be liable for our clients costs in accordance with rule 36.1(3) if the offer is accepted …
…
If you do not understand any aspect of this offer or would like us to clarify any aspect of this letter or consider that this offer is in anyway defective or non-compliant with Part 36, please let us know in writing within seven days of service in accordance with Rule 36.8.”
The terms of the acceptance letter, or purported acceptance letter, sent by the defendant's solicitors were as follows:
“We write further to previous correspondence in this claim and to confirm that your client's Part 36 offer of 20 October 2020 …is accepted. MGN will arrange for the payment of £99,500 damages to be transferred to the usual Hamlins account.
We note that your client's Part 36 offer states that if that offer is accepted, your client will also seek a Statement in Open Court in terms to be agreed by the parties. That is agreed by MGN; please send us a draft for consideration. Please note that the acceptance of this offer comes with no admission of liability to your client beyond what is set out in MGN's Defence and the accompanying schedule, and it does not consider the sum in your Part 36 that it has accepted to be a fair reflection of the value of your client's claim. It has been accepted in order to bring this matter to a close now and to avoid further costs being incurred by both sides.
We also write to give notice that MGN intends, pursuant to paragraph 37 of the 9th CMC Order, to apply for a variation to the terms of the template order. This is for reasons set out in our open letter of 30 October 2020. We have copied the Lead Solicitor to this letter and we are aware of the notice requirement provided for in paragraph 37.”
The reference to the template order in the last paragraph is a reference to a standard form of costs order adopted by settling parties in this litigation. The claimant relies on it as introducing a relevant degree of equivocation as to whether the offer was accepted or not, or as non-correspondence between offer and acceptance. The defendant says that it was merely setting out the posture that it intended to adopt in an argument that it was entitled to run under the CPR.
Was the defendant entitled to accept the Part 36 offer in the manner in which it did?
The defendant maintains it is entitled in the circumstances to accept the offer and invite the court to exercise a discretion over all the costs of the action. Part 36 works as follows.
CPR 36.13 provides for what is to happen if the costs offer is accepted within the “relevant period” – ie the period of not less than 21 days within which a defendant will be liable for the claimant's costs in accordance with rule 36. 13 or 36.20 if the offer is accepted – see the definition in rule 36.3 which cross refers to rule 36.5(1)(c). In the present case the relevant period is 21 days. In the event of such acceptance within the period rule 36.13 (1) provides that “the claimant will be entitled to the costs of the proceedings …up to the date on which notice of acceptance was served on the offeror.”
That is, of course, not what happened in this case. In this case the offer was accepted outside the 21 days, on the 22 nd day. It appears that that was deliberate. That sort of acceptance is provided for by rule 36.13(4):
“(4) Where –
…
(b) a Part 36 offer which relates to the whole of the claim is accepted after expiry of the relevant period …
The liability for costs must be determined by the court unless the parties have agreed the costs.”
The next two paragraphs deal with how the court is to go about that exercise:
“(5) Where paragraph 4(b) applies but the parties cannot agree the liability for costs, the court must, unless it considers it unjust to do so, order that –
(a) the claimant be awarded costs up to the date on which the relevant period expired, and
(b) the offeree do pay the offeror's costs for the period from the date of the expiry of the relevant period to the date of acceptance.
(6) In considering whether it would be unjust to make the orders specified in paragraph (5), the court must take into account all the circumstances of the case including the matters listed in rule 36.17(5).”
And 36.17(5) provides:
“In considering whether it would be unjust to make the orders referred to in paragraphs (3) and (4), the court must take into account all the circumstances of the case including—
(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.”
Thus Mr Ben Williams QC, for the defendant, says that his client's acceptance triggers those provisions and entitles him to invite the court to consider the matter and make an order which deprives the claimant of her costs from 26 th March 2019 (which was the date of the service of the Defence in the action).
Mr Sherborne for the claimant does not dispute that the offer can be accepted after the 21 days referred to in it has expired, but says that the provisions of rule 36.13 do not assist the defendant. His starting point is that the Part 36 offer was accepted and the defendant is not entitled to introduce qualifications into that acceptance by seeking to depart from the costs element of the offer. If the offer was accepted, then so was the costs element, which required the defendant to pay the claimant's costs. That is the position which now exists.
Mr Sherborne's position is essentially a contractual offer and...
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