RED Alert — spring 2014: Part 36 offers: a miss is as good as a mile

In Hammersmatch Properties (Welwyn) Ltd v (1) Saint-Gobain Ceramics and Plastics Ltd (2) Saint-Gobain Abrasives Inc [2013] EWHC 2227 (TCC), the court had been asked to make a costs order following its earlier decision on a terminal dilapidations claim. The decision is a very useful reminder of how Part 36 will be applied by the courts and how serious the consequences can be.

In this case, the defendant tenant had made a Part 36 offer to settle, which was not accepted by the landlord. At trial, the landlord was awarded damages that were only slightly higher than the tenant’s offer.

The tenant argued that the normal rule, that the winning party can recover its costs, should not apply because its offer was such a near miss. It argued that the court should take account of its Part 36 offer in reducing the amount of the landlord’s costs…

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