Carver Ruling on Part 36 Offers overturned
The Civil Procedure Rule Committee has now reversed the controversial ruling in Carver v BAA [2008] EWCA Civ 412.
Before 2008, a claimant avoided any costs sanctions so long as they beat the defendant’s Part 36 offer by any amount, or equalled their own offer. However, in Carver, where the claimant beat the defendant’s Part 36 offer by a mere £51, the Court of Appeal said that judges should take a broader view of whether the final outcome showed the case was worth the fight and that the judge in this matter was “entitled to take into account that the extra £51 gained was more than offset by the irrecoverable cost incurred by the claimant in continuing to contest the case for as long as she did.”
In his final report, Lord Justice Jackson said that Carver had introduced “an unwelcome degree of uncertainty into the Part 36 regime” and also “tends to depress the level of settlements” due to claimant’s being wary of taking the risk of going to trial.
The Civil Procedure Rule Committee have subsequently approved a clarification to Part 36.14 that says “more advantageous” means better in money terms by any amount, however small, and “’at least as advantageous’ shall be construed accordingly.” This clarification will take effect from 1st October 2011, when the 57th update of the Civil Procedure Rules comes into force.
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