Hislop v Perde: Taylor Rose wins definitively in Court of Appeal on fixed costs and late acceptance

Taylor Rose  has won definitively in the Court of Appeal on the long running costs argument in fixed costs cases where the defendant accepts a claimant’s Part 36 offer late. In Hislop v Perde, the Court of Appeal has ruled that fixed costs apply down to the date of acceptance. There is no discretion under Part 36 to award standard or indemnity basis costs.

Taylor Rose director of dispute resolution Matthew Hoe acted for the successful appellant.

The claimant’s policy argument that a claimant should get more than fixed costs on late acceptance failed because the court focussed on construing the rules. The claimant could not emulate Broadhurst v Tan (where a claimant gets indemnity costs for beating his offer at trial) because different rules applied. The court reiterated that the exceptions to fixed costs are extremely limited and are stated by the CPR.

The condensed explanation of the Court’s decision on the rules in this case is that CPR 36.13 does not apply to Section IIIA cases at all. CPR 36.20 does. Because CPR 36.20 says nothing to dis-apply CPR 45.29B or D in defendant’s late acceptance cases, those rules continue to apply. If a claimant wants greater costs he has to apply under the exceptional circumstances rule CPR 45.29J, but mere late acceptance will not amount to exceptional circumstances.

The court did not address find it necessary to address the alternative arguments in the event that CPR 36.13 applied.

The court answered the policy arguments in two ways. Generally, as defendant’s costs on late acceptance were capped at fixed costs, claimants should be on a similar footing. In specific cases where there may be a particular issue on the facts, CPR 45.29J was the remedy.

Exceptional circumstances were also addressed in the linked appeal of Kaur v Committee for the time being of Ramgarhia Board Leicester, which was also allowed. The Court of Appeal said the district judge had been wrong to consider that the claimant would have gotten greater costs if the defendant had accepted the claimant’s earlier, lower offer after its relevant period rather than making a higher offer. Therefore he had misdirected himself that there were exceptional circumstances.

This judgment gives the certainty that practitioners need on this issue. The stayed cases can now be resolved.

This argument followed on the heels of Broadhurst. Just a handful of wrongly decided first instance cases caused a swathe of copycat applications. This appeal probably always came down to the argument that fixed costs were not enough in these circumstances. But it was not clear why costs increased more than they otherwise would have done after a Part 36 offer was made. So perhaps it came down to a broader contention that fixed costs are never enough. That will have to be resolved in a different way.