Claimant Who Exaggerated His Claim in the Extreme Suffers Severe Cost Consequences


27 November, 2015

Karl Worthington v 03918424 Ltd (2015)DR (Manchester) (District Judge Harrison) 16/06/2015

The court has sent a clear message that exaggerated claims will not be tolerated. In this matter, the parties were unable to reach an agreement over costs after the claimant accepted the defendant's Part 36 offer out of time.

The claimant had pursued a claim which was valued at over half a million pounds; however, following service of surveillance evidence, he promptly accepted the defendant's earlier Part 36 offer of just £40,000. The Judge was unequivocal, a claimant who pursues a claim in excess of half a million pounds but settles for £40,000 attracts suspicion. When he does so in short order after service upon him of surveillance evidence, then one looks to find some clear and convincing explanation as to why he should sell himself so short.

The Judge ordered that if the claimant had conducted the litigation in a proper manner and without exaggeration, then in all probability the matter would have been resolved between the parties by the end of June 2012. The claimant was entitled to costs on the standard basis up to and including 30th June 2012. However, the claimant was ordered to pay the entirety of the defendant's surveillance costs and to bear the defendant's costs from June 2012 on the indemnity basis and to pay the costs of the application.

Forbes comment

If a Part 36 offer is accepted within the relevant period for acceptance then the offeror is responsible for the offeree's costs. If the offer is accepted out of time, and the parties are unable to agree liability for costs, then it falls to the court to make an order for costs. In this instance, the Part 36 offer had been accepted out of time so the claimant had inevitably put himself at risk as to arguments over costs.

The claimant raised the argument that the defendant ought to have disclosed the surveillance evidence earlier, the Judge agreed that it was appropriate to require the claimant to nail his colours to the mast before disclosing the evidence and therefore no criticism was levelled at the defendant in this regard.

For further information please contact Sarah Wilkinson


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