Costs: Nil Damages Offer Is A Valid Part 36 Offer

The decision is significant as it recognises that a Part 36 offer can be genuine even without a damages element. Giving up the damages entitlement was found to be a significant concession, despite reasonable costs being sought as part of the offer.

In cases where the claimant is seeking an admission of liability / apology, defendants are able to ensure some costs protection by making an offer to admit liability, even if the offer does not include any damages.

Background

The Claimant was arrested on suspicion of harassment, but was released without charge. Nonetheless the Claimant, upon entering certain countries, would have been required to declare the arrest. This would have caused disruption to his business activities.

The Claimant issued a claim for false imprisonment and assault. The Defendant made an initial Part 36 offer to settle in the sum of £4,000 whilst also providing a letter of apology. This was rejected as it did not contain an admission of liability.

Subsequent Part 36 offers were made by the Claimant on condition the Defendant admitted liability for the unlawful arrest and removed all information about him from all police records. The Defendant rejected these offers.

The relevant Part 36 offer to settle the claim sought no damages, but only an admission of liability, with costs to be assessed. This was not accepted. In response, the Defendant offered to provide the Claimant with a letter he could use when travelling.

First instance

At trial, the Claimant was successful and was awarded damages of £2,750. On the issue of costs, the judge found the Claimant's whole purpose in the litigation was to establish the unlawfulness of the arrest, and that the trial was therefore inevitable.

Despite the damages award being lower than the Defendant's offer, HHJ Baucher held the...