Part 36 consequences
This case provided confirmation that the Court is entitled to award the 10% ‘bonus’ when a receiving party successfully beats their Part 36 offer, no matter how narrowly.
In this matter the receiving party had made a Part 36 offer of £425,000.00. Costs were assessed at almost of £432,000.00. Therefore, the receiving party was entitled to receive an additional 10% of the amount which is awarded. In this matter the additional payment would amount to £43,200.00 even though the receiving party only beat their Part 36 offer by £7,000.00.
At the first decision Master Mcleod considered that the awarding of the additional sum would be disproportionate and unjust.
On appeal it was held that the Master had erred when applying her discretion to not award the additional amount. It was considered that the additional amount was not simply a bonus but was instead intended to be compensatory and that there must be some penalty for the paying party to bear in rejecting an adequate offer.
It was also interesting to note that it was found, albeit obiter, that the 10% amount was ‘all or nothing’.
The full judgment can be read here.