Attersley v UK Insurance Limited [2026] EWCA Civ 217: fixed costs and Part 36

Facts

The Claimant was involved in a road traffic accident on 9 March 2018. On 19 March 2018, the Claimant’s solicitors submitted a CNF under the Pre-action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents (“the RTA Protocol”), which stated the value of the claim was up to £10,000. On 9 April 2018, the claim exited the RTA Protocol. The Defendant later admitted liability.

On 13 February 2021, the Claimant issued a Part 7 claim form, with the Particulars of Claim stating she expected to recover up to £150,000 in damages. On 4 March 2021, the Defendant filed a Defence admitting liability and made a Part 36 offer of £45,000.

On 5 January 2022, at a CMC, the parties agreed that the case was suitable for the multi-track.

On 18 May 2022, the Defendant applied to amend its Defence to allege fundamental dishonesty. The application was never heard as on 8 July 2022, the Claimant accepted the Defendant’s Part 36 offer. A hearing was fixed to determine the consequences of the Claimant’s acceptance of the offer. The parties agreed that if the Claimant had accepted the offer within the relevant period, she would have been limited to fixed costs.

At first instance, HHJ Duddridge found for the Defendant. On appeal, Stacey J found for the Claimant.

Court of Appeal 

The Court of Appeal allowed the Defendant’s appeal, holding that fixed costs applied. Lord Justice Miles gave the leading judgment, with which Lady Justice Falk and Lord Justice Lewison agreed.

The principle issue was whether the costs consequences of the Claimant’s acceptance of the Part 36 offer fell to be determined under rule 36.13 (Costs consequences of acceptance of a Part 36 offer) or under rule 36.20 (Costs consequences of acceptance of a Part 36 offer where Section IIIA of Part 45 applies).

Rule 36.13(1) expressly states that it is subject to rule 36.20 and the words in parenthesis at the end of rule 36.13(1) expressly refer to rule 36.20. Therefore, Lord Justice Miles held where rule 36.20 applies, rule 36.13 does not.

Rule 36.20 is headed “Costs consequences of acceptance of a Part 36 offer where Section IIIA of Part 45 applies”. Rule 36.20(1) applies “where … a claim no longer continues under the RTA or EL/PL Protocol pursuant to rule 45.29A(1)”. The scope of Section IIIA of Part 45 is defined in rule 45.29A, namely it applies to a claim started under the RTA or EL/PL Protocol “where such a claim no longer continues under the relevant Protocol”. It was common ground that the claim was a claim started under the RTA Protocol, but no longer continued under it. Therefore, under those provisions, the case would fall within the scope of rule 36.20.

Stacey J had concluded it was necessary to read those provisions together with rule 45.29B, and rule 45.29B had displaced those provisions. Stacey J relied upon Qader v Esure Services Ltd [2016] EWCA Civ 1109, which in her judgment, established that the Section IIIA fixed rules ceased to apply to a case allocated to the multi-track.

Rule 45.29B, Application of fixed costs and disbursements – RTA Protocol, provides:

“45.29B  Subject to rules 45.29F, 45.29G, 45.29H and 45.29J, and for as long as the case is not allocated to the multi-track, if, in a claim started under the RTA Protocol, the Claim Notification Form is submitted on or after 31st July 2013, the only costs allowed are—

• the fixed costs in rule 45.29C;
• disbursements in accordance with rule 45.29I.”

Lord Justice Miles disagreed with Stacey J’s interpretation, holding that the words in rule 45.29B do not require, where a case comes to be allocated to the multi-track, that it is to be treated for all purposes as if it had never, at the previous stages, fallen within Section IIIA of Part 45. The wording has a temporal element, and this naturally connotes that until a case has been allocated to the multi-track, the Claimant is entitled only to the fixed costs identified in rule 45.29B. Lord Justice Miles did not consider that Qader had established the broad proposition that allocation to the multi-track means that Part 45 is completely disapplied, with retrospective effect and for all purposes. Qader had concerned whether a claim allocated to the multi-track should be subject to fixed costs or costs management, and the Court did not have to consider the interplay between Part 45 and other rules, or the question of potential retrospective effect of allocation for any other purposes. Further, Lord Justice Newey appeared to have the interpreted the wording in this way in Ho v Adelekun (No. 1) EWCA Civ 1988 and that judgment showed that there was no blanket rule that the allocation of a case to the multi-track disapplies the fixed costs regime in Section IIIA retrospectively and for all purposes.

Furthermore, Lord Justice Miles considered that the Defendant’s interpretation had more rational and coherent consequences. It would be surprising if the Claimant would become entitled to a substantially greater amount of costs by accepting the offer after expiry, by reason of events occurring after the end of that period and outside the parties’ control. Also, part of the purpose of the rules is to encourage early settlement, and it was hard to see why a claimant who accepts an offer after expiry of the relevant period, should be in a better position than one who accepts the offer within the relevant period.

It was not necessary for the Court to decide how the CPR would operate where, in an ex-Protocol case, an offer had been made after the allocation of the case to the multi-track, or where the offer had been made before allocation but the relevant period expired afterwards, but Lord Justice Miles suggested that the Rules Committee may wish to consider those scenarios, as the existing rules do not yield entirely straightforward answers and would benefit from clarification.

Comment

This case shows that delaying accepting an offer until the claim has been allocated to the multi-track will not mean that a Claimant will escape fixed costs. However, this is unlikely to be the end of the disputes where the fixed costs rules and Part 36 interact.

Also, this case involved an accident in 2018 and the rules have subsequently changed for personal injury claims where the cause of action accrues on or after 1 October 2023, so it is worth checking the current numbering and wording of the rules. For example, rule 36.20 has become rule 36.23.

Article by Emma Woods