Part 36 indemnity costs trumps fixed costs rules the Court of Appeal

Two low level RTA claims, relating to separate Claimants (Broadhurst and Taylor), were heard together on appeal after opposite decisions were made by judges on whether to equate indemnity costs with fixed costs.

The Master of the Rolls, Lord Dyson said that assessed costs should trump fixed costs where Claimant’s secure more than they had offered to settle for.

If rules in Part 45 stood alone, the Claimant would only be entitled to fixed costs and disbursements. The fact of the matter was that the Part 45 rules did not stand alone.

Lord Dyson did not consider that there was any doubt as to the true meaning of the rules within Part 36 & 45 of the CPR and the tension between these rules was clearly resolved in favour of rule 36.14A.

This ruling gives Claimants an extra incentive to make protective Part 36 offers in low value personal injury RTA, Employer Liability and Public Liability claims where fixed costs are the starting point.