Part 36 Offers & The Court's Discretion As To Costs (CPR 44.3)

In the case of Phi Group Ltd v Robert West Consulting, [2012] EWCA Civ 588, the Court of Appeal considered the requirements of Part 36 offers and overturned a costs decision in the Technology & Construction Court ('TCC').

The Facts:

M40 Trains Limited engaged Carillion JM Ltd ('Carillion') to design and build a train servicing deport to the west of Wembley Football Stadium. Carillion engaged Phi Group Limited ('Phi') as its specialist design and build contractor for what is known as the "soil nailing work" and Robert West Consulting Ltd ('RWC') as its consulting engineer and lead consultant for the overall works.

In 2009 Carillion commenced proceedings against Phi for damages due to the instability and slips in the London Clay. The proceedings against Phi were settled - Phi paid Carillion £3.45 million plus costs; however, the proceedings Carillion commenced in 2010 against RWC and the Part 20 proceedings (contribution proceedings) between Phi and RWC remained unresolved. In June 2011 Mr Justice Akenhead in the TCC found that RWC had been negligent and that Carillion's overall loss was some £6.7 million. He ordered RWC to pay Carillion £3.23 million. He also found that Phi was 60% responsible and RWC 40% responsible for the negligence and accordingly ordered Phi to pay RWC approximately £570,000 so as bear 60% of the responsibility.

An order for costs had been agreed...