On 10 March 2016, Nicholas Bacon QC and Adam Walker succeeded on behalf of the Claimant in the Court of Appeal in an appeal that dealt with the relationship between open payments made following admissions and offers made pursuant to CPR Part 36.

Having succeeded at the 5-day trial of a commercial property dispute the Claimant was awarded his costs to be assessed on the standard basis. The Defendants appealed the costs order to the Court of Appeal on the basis that the judgment obtained by the Claimant was lower than the aggregate of (a) a payment made following admissions made in the Defence, and (b) a Part 36 offer that pre-dated the Defence and the payment, but which had not been withdrawn. The Claimant cross-appealed on the basis that he should have been awarded his costs with assessment on the indemnity basis, relying on Gomba Holdings Ltd v Minors Finance Ltd [1993] Ch 171.

Before the Court of Appeal the Defendants argued that Part 36 was a self-contained code (Gibbon v Manchester City Council [2010] EWCA Civ 726), that Part 36 offers remain open for acceptance until they are withdrawn and that as the Part 36 offer in this case had not been withdrawn it remained open for acceptance by the Claimant after he had received the benefit of the payment made following admissions. The Defendants argued that the obiter dicta of Moore-Bick LJ in LG Blower Specialist Bricklayer Ltd v Reeves [2010] EWCA Civ 726 supported that position.

The Court of Appeal (Black LJ, Gloster LJ and Briggs LJ) dismissed the appeal and allowed the cross-appeal, awarding the Claimant his costs on the indemnity basis. It was held that while the open payment following admissions was not the same as an interim payment under CPR r.25.1(1)(k), had the Claimant accepted the offer he would have been required to give credit for the open payment following admissions and he would not have been entitled to the sum of them both. As such the Claimant had beaten the Part 36 offer, which was not enhanced in any way by the payment. The Court of Appeal went on to decide that the Claimant was correct that he was entitled to his costs on the indemnity basis in light of Gomba Holdings and the terms of the commercial lease in question.

Reported as: Littlestone & Ors v Macleish [2016] EWCA Civ 127

The case can also be found reported on Lawtel.


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