Key Facts
- •Claimant, a German national, was unlawfully detained by the Home Office in 2018.
- •Claimant sued the Home Office and the Ministry of Justice (MOJ) for unlawful detention.
- •MOJ admitted liability for a portion of the detention.
- •Home Office denied liability.
- •Case settled just before trial, with the Home Office paying £15,000.
- •Costs were left to be determined by the court.
- •Claimant's initial costs budget was significantly higher than the claim value (£30,000).
- •Claimant's settlement negotiations were largely inactive for nine months after an initial Part 36 offer.
Legal Principles
Part 36 offer acceptance within 21 days of trial – liability for costs determined by the court.
CPR 36.13(4)(a)
General rule on costs: unsuccessful party pays the successful party's costs, but the court may make a different order.
CPR 44.2(2)(a), (b)
Court considers all circumstances, including parties' conduct, when determining costs; unreasonable conduct can lead to cost adjustments.
CPR 44.2
In assessing costs, the court may consider whether a party unreasonably refused ADR.
Halsey v Milton Keynes [2004] EWCA Civ 576
Refusal of ADR, even without reasonable grounds, is generally unreasonable conduct under CPR 44.2(5). However, there is no automatic costs consequence.
PGF v OMFS [2014] 1 WLR 1386 (CA)
In cases of partial success, the court considers the extent of success and reasonableness of pursuing the unsuccessful part; if a compromise, the default is no order unless it’s clear who would have won.
R (M) v Croydon LBC [2012] 1 WLR 2607 (CA); R(Tesfay) v SSHD [2016] 1 WLR 4853 (CA)
A claimant who recovers more than the defendant previously offered should normally be considered the successful party, subject to adjustments for unreasonable conduct.
Fox v Foundation Piling [2011] 6 Costs LR 961 (CA)
Outcomes
Defendant to pay Claimant's reasonable costs up to 21st December 2021.
Claimant was successful party up to this point; no criticism of Claimant's conduct in this period.
Defendant to pay 66% of Claimant's reasonable costs from 21st December 2021 to 14th October 2022.
Claimant's failure to negotiate for nine months was unreasonable conduct, justifying a costs reduction; however, complete disallowance was deemed disproportionate.