The High Court recently ordered Eddie Jordan, a motorsport team boss and television personality, to pay indemnity costs for the late acceptance of Part 36 offer and failing to engage in settlement.

Background:

Mr Jordan accepted a Part 36 offer of £15,000 that had been made over 3 years ago even where the Defendant had made offers of £100,000. 

He accepted the original offer of £15,000 just before the trial started, having rejected a higher non-Part 36 offer, which he then tried to accept, unsuccessfully.

Under Part 36, this meant that Mr Jordan would have his costs paid until the expiry of the original offer of £15,000 and he would then have had to pay MGN’s unless it was unjust to do so.

The court held that the Mr Jordan’s conduct was such as to warrant an order of indemnity costs as he had failed to make any sensible offer until shortly before the trial, without reason, after further considerable costs had been incurred by both parties.

Analysis:

The court does appear to have been influenced in this case by the fact that Mr Jordan's actions had exposed the Defendant to the prospect of having to pay CFA uplift costs and further ATE premiums that could have been avoided if the case had settler earlier, which should have happened.

The court's current approach to Part 36 sanctions is that the penalty on a late accepting Claimant is that they are already deprived of costs from the expiry of the date for accepting the Part 36 offer and they also pay the losing Defendant’s costs from that date.

This is a stark warning to Claimants that failure to engage in clear settlement negotiations, and failure to make offers/respond to offers, does put them at risk of indemnity costs on the late acceptance of a historic Part 36 offer.