In JLE (A Child by her Mother and Litigation Friend, ELH) v Warrington & Halton Hospitals NHS Foundation Trust  EWHC 1582 (QB) the successful claimant served a bill of costs for £615,751 and then made a Part 36 offer to accept £425,000. The offer was not accepted. On assessment the Claimant beat her offer by £7,000.
The Rules provide that where a Claimant beats her Part 36 Offer the court must, unless it considers it unjust to do so, order that the Claimant is entitled to (a) interest; (b) costs on the indemnity basis from the expiry of the offer; (c) interest on those costs and (d) an additional amount, not exceeding £75,000, calculated by applying 10% to the sum awarded by the Court (CPR Part 36.17(4)(a)-(d)).
At first instance the Master awarded the sums provided for in CPR 36.17(4)(a)-(c) but held that it would be unjust to award the additional amount, that is the uplift on damages or, in this case, costs, under CPR 36.17(4)(d) which, the Master said, would result in a disproportionate “bonus” of c. £40,000.
That decision was appealed.
It was held that, when considering injustice, the court may find it unjust to award some of CPR 36.17(4)(a) – (d), but not all. However, it is not open to judges to take into account, in the exercise of their discretion, the amount by which a Part 36 Offer had been beaten. Taking into account the significance of the 10% uplift (c. £40,000) relative to the margin by which the offer was beaten (£7,000) was an error of law. The additional award of 10% should not be characterised as a “bonus”. It is not meant to be compensatory. It is supposed to include a penal element when a Claimant had made an offer which it matched or bettered.
There is no power to award a lower percentage than the 10% prescribed by CPR 36.17(4)(d). The language of the rule makes it clear that the uplift is all (i.e. 10%) or nothing.