hand shakeCivil and Commercial litigation in England and Wales is conducted in accordance with the Civil Procedure Rules (“CPR”). The very first rule of which you may be familiar with as the Overriding Objective, this sets out that amongst other things, that the parties should work together to try to resolve matters and/or limit the issues between them.

One of the mechanisms of settlement open to parties is under Part 36 of the CPR. In its most basic format, this establishes that a party that makes an offer of this type, which the other party refuses or ignores, and then goes on at trial to equal or better it should receive their costs on the indemnity basis, from the last day on which it could have been accepted within the ‘relevant period’.

What was not as clear was what would happen if a Part 36 offer was made. and bettered at trial, but was a case where fixed costs applied, rather than those allowing the parties to claim the costs incurred that are within their budgets or deemed reasonable by the court, as are set out in CPR 45.

The recent case of Broadhurst & Taylor v Tan & Smith [2016] EWCA Civ 94 appears to have reconciled this issue, as a minimum for cases where the fixed costs under Section IIIA of CPR 45 (lower value personal injury claims). In respect of costs in such a case, where CPR 45 and 36 might both apply, the tension between them is reconciled by the finding that Part 36 is dominant.

This would appear as further evidence of the court’s intention to encourage parties to attempt settlement and the possible cost consequences of failing to do so.