French v Groupama Insurance Company Ltd

This is an appeal about costs. It raises issues about how a pre-litigation offer to settle should be treated in the light of CPR provisions to be found in Part 36, as amended over the period concerned, and in the light of Trustees of Stokes Pension Fund v. Western Power Distribution Power Distribution (South West) plc [2005] EWCA Civ 854, [2005] 1 WLR 3595 (Stokes). It is set, however, in a special factual context of its own.

The appellant is Heather French. She was the claimant below. She commenced her litigation on 6 March 2009, basing herself on a claim for breach of a contract which she alleged that the defendant insurance company, Groupama Insurance Company Limited (“Groupama”), had made with her in December 2002 for the reinstatement of her home following subsidence. The origins of the dispute went back to 1997 or even 1996. The agreement she relied on provided for reinstatement, and alternative accommodation and storage in the meantime. Her original complaint had gone much wider than her ultimate claim: she had claimed as an insured under a group policy going back to 1996 or thereabouts, which Groupama denied, and had identified claims for personal injury and loss of employment, which formed no part of her ultimate proceedings, it seems because they had become time barred. Her claim was met by a lengthy, detailed and complex defence and counterclaim.

Throughout the earlier period of her complaints, Miss French had acted for the most part as a litigant in person. However, when it came to litigation, she was represented by solicitors and counsel. There was a substantial trial in October 2010, following which HHJ Seymour QC gave judgment on 12 November 2010 in her favour in the sum of £126,963.53. Following the handing down of judgment, there were on that day further submissions about interest and costs. The judge calculated interest due in the approximate sum of about £5,000 (it was subsequently awarded in the sum of £5,283.88) before going on to consider costs, which he did on the basis that Miss French’s recovery at trial was in the approximate total of £132,000, inclusive of interest. His formal order was subsequently in the sum of £132,247.41.

In these circumstances Groupama relied, however, on an offer of £115,000 to cover the entirety of Miss French’s claims, inclusive of interest and costs, which it had made to her several years before she had commenced her proceedings, in letters dated 22 December 2006 and 15 February 2007. The judge regarded that offer as having been worth more than Miss French had recovered at the end of the day. Although Miss French may have seemed to have recovered more than she had been offered, nevertheless when allowance had been made for the additional damages that she had continued to suffer in the meantime, she would have been some £20,000 (Groupama submitted some £30,000) better off had she accepted the offer and proceeded immediately to reinstate her home for herself. That buffer of £20,000 (or £30,000) more than covered any costs which she might have incurred, essentially as a litigant in person, up to that time.

There was a dispute as to the status of Groupama’s offer. It was submitted on Miss French’s behalf that the letters had at any rate by agreement been treated as having been privileged and remained so. It was submitted on behalf of Groupama that their status had been resolved by agreement between the parties’ solicitors at the time of trial, so that they were admissible in relation to costs following judgment. The judge held simply that they had always been open letters (“The fact of the matter is that the relevant letters were open letters when written and their status has not altered…”, at para 23 of his judgment on costs dated 12 November 2010); and also that the parties had in any event agreed that reference might be made to them after judgment (“an unsurprising conclusion”). On that basis, he applied the judgment of this court in Stokes in order to rule that, even though it was accepted on behalf of Groupama that neither letter was an offer within CPR Part 36, nevertheless the second letter, which had at least allowed 21 days for its acceptance, met the conditions laid down by Stokes for a quasi Part 36 offer which ought to be accorded the same effect as a payment into court: and that therefore Mrs French ought to recover no costs herself but instead pay the whole of Groupama’s costs.

Thus the judge reasoned:

On this appeal all of those conclusions of the judge are in issue, even if the detailed calculations of the February 2007 offer of £115,000 as being more valuable than the judgment, which Groupama has repeated in this court, are not seriously challenged as figures (nor were they before the judge).

The 22 December 2006 letter followed a mediation between the parties. It is clear that an offer of £115,000 had been made at that mediation. It is common ground that the mediation was held without prejudice. The letter was addressed to Miss French and came directly from Mr François-Xavier Boisseau, Groupama’s managing director. It was itself in response to a letter dated 20 December from Miss French to Mr Boisseau, copied to a producer at the BBC, Mr Andrew Snowball. It appears that Mr Snowball’s interest had helped Miss French get the matter as far as mediation. In her lengthy letter Miss French continued to argue her case, but also sought a final settlement:

Mr Boisseau’s reply for present purposes can be limited to the following paragraph:

Miss French replied by her letter dated 17 January 2007, again copied to Mr Snowball. It says in part:

That passage is relied on by Groupama on this appeal as expressing the intransigent unwillingness of Miss French to enter into meaningful negotiations.

Mr Boisseau replied again on 15 February 2007, and this letter has a legal formality which was lacking from his previous offer. It said that he had sought a further legal opinion and obtained detailed advice from Queen’s Counsel which confirmed the company’s views that it had no legal obligation to Miss French. It continued:

A further letter from Mr Boisseau dated 1 March 2007 suggests that there was a reply of 28 February from Miss French rejecting the offer. It also refers to some ongoing communication with Mr Snowball.

Groupama’s offer expired on 8 March 2007 and was no longer available for acceptance thereafter.

As stated above, Miss French commenced proceedings on 6 March 2009. In her particulars of claim she relied exclusively on an agreement said to have been made in December 2002 for the reinstatement of her property, the payment of reasonable costs for alternative accommodation, a contribution to travel, and the payment of removal and storage charges. Her particulars were 7 pages long. Groupama’s defence and counterclaim ran to 21 pages and 50 pages of appendices.

A number of years later, as trial approached, the parties’ solicitors discussed the documents which ought to be in the trial bundles. Among the documents discussed were the letters of December 2006 and February 2007. The parties were at issue as to whether these were open or privileged documents. There was no suggestion that at the time of their communication they had been in the form of Calderbank offers, that is to say privileged save as to costs. Thus on 15 October 2010, Groupama’s solicitors wrote to Miss French’s solicitors to say –

Miss French’s solicitors, who had been instructed only about one week before, replied on the same day as follows:

On 18 October 2010 Groupama’s solicitors took the matter further with the following proposal:

Miss French’s solicitors responded with reference to other disputed material but did not include mention of the letters of December 2006 and February 2007. Their response had begun: “We agree with your proposals with respect to the privileged documents that our client had sought to include.” The failure to refer as well to the December 2006 and February 2007 letters appears to have been an oversight. So Groupama’s solicitors emailed back: “Before I respond, please confirm your position in relation to my client’s privileged documents i.e. the letters dated 22.12.06 and 15.02.07.” And Miss French’s solicitors responded: “We agree that we do not require those to be in the bundle.” This elicited a further email from Groupama’s solicitors:

So there was the agreement concerning the two letters. In my judgment, that agreement is plain. The letters were agreed to have been privileged, not open, but by way of compromise of any issue as to their status it was agreed that they could be shown to the judge after judgment. The final exchange does not contain the words “in relation to costs”, and it may be that if it mattered (which it does not) the agreement as to the admissibility of the letters after judgment went further than in relation to costs. The agreement plainly embraced admissibility in relation to costs.

On behalf of Miss French, however, Mr Michael Hartman submitted that the omission of the words from the final exchange of “in relation to costs” had the effect that the agreement then made was merely to postpone the issue, which in the absence of agreement might have had to be resolved by the judge, as to whether the letters were privileged or open. He referred to Scarf v. Jardine (1882) 7 App Cas 345 (HL) at 360/361 as to the need for an unequivocal communication of an election. In my judgment, however, his submission is an unrealistic and impossible construction of what is an agreement, even if it also involves a partial (but mutual) waiver of privilege (I am not sure about election). The parties were not postponing an issue, but resolving it. The documents were agreed to be privileged, but it was also agreed that they could be shown to the judge after judgment, inter alia in relation to costs.

However, it is to be noted that there was never any agreement, and none is suggested on this appeal, that the letters when written were privileged save as to costs, ie had the effect of a Calderbank offer. It is common ground that they were either privileged or open. Subject to the argument which I have rejected, that that issue was reserved for debate until after judgment, the agreement resolved that issue in favour of the letters having been privileged: but there was an agreement to waive privilege following judgment.

It might be observed that, whereas Groupama was understandably concerned that the trial judge should not know that it was prepared, while asserting all freedom from legal liability, to make a substantial payment to Miss French already back in 2006/7, both parties’ solicitors obviously took the view that their clients would be assisted on the matter of costs by the judge learning after judgment of those earlier negotiations. It is easy to see the advantage to Groupama, as the party making the offer, of that way of looking at things. It is harder to see why Miss French would be assisted.

In the circumstances of the parties’ agreement, four things seem to me plainly to follow. The first is of course that the judge was entitled to see the letters, as he did. The second is that it was wrong for the judge to describe the letters as “open”, ie to have been written as open letters. Whether they were or whether they were not, the parties had agreed that they were privileged. It seems to me that the judge was not entitled to go behind that agreement. That agreement was a compromise of the positions that the parties had taken up. Therefore the judge erred in this respect, and he erred to say that “the relevant letters were open letters when written and their status has not been altered”. Whether the letters were open or privileged when written, the parties have agreed that they were privileged. Thirdly, the judge was wrong to comment that it was “an unsurprising conclusion” that the parties had agreed that after judgment reference might be made to the letters. That comment proceeded of course from his view that the letters had always been open. Nevertheless, it was not an unsurprising conclusion at all. It was a real compromise of the parties’ plain dispute as to whether the letters were open or privileged. As it is Groupama seems to have got rather the better of that compromise, because it avoided the prejudice, which it obviously feared, of the judge seeing Groupama’s defensiveness as part of trial, but it had the benefit of being able to point to its earlier offer, for what it turned out to be worth, after judgment.

Fourthly, the value of Groupama’s earlier offer, I mean its forensic as well as its monetary value, has to be seen in a rather complex light: because the status of the letters is that (a) they were agreed to be privileged when written; (b) they were not privileged save as to costs when written, ie they were not of Calderbank status; (c) they became admissible in relation to costs, ie only after judgment, in October 2010, nearly four years after they had been written; (d) the offer repeated in the letter of February 2007 was time limited to expire 21 days after 15 February; (e) during the period when the offer was available to Miss French she was relying on other claims, of personal injury and of loss of employment, which she was time barred from presenting and in any event did not present when she commenced litigation, so that it is particularly difficult to compare the offer made at the time when it was made and available for acceptance and the offer at the time when it was agreed that privilege could be waived and that the letters could be referred to after judgment; and (g) at the time when the letters were written and received by Miss French she was acting as a litigant in person.

This question, in the light of the parties’ agreement, is irrelevant. Had it been relevant, however, it would not have been an easy question to answer, and I would have declined to try to do so.

Prima facie, it might be said, the offers were privileged. The December offer originated in the mediation, which was held in expressly privileged circumstances. That privilege will be respected: see Reed Executive plc v. Reed Business Information Ltd [2004] EWCA Civ 887, [2004] 1 WLR 3026. Although the December offer was not expressed to be made “without prejudice”, a repeat of the mediation offer would not readily be thought of as being made in open form, unless it was expressly stated to be so. The February 2007 offer, on the other hand, was expressly stated to be made “without prejudice”.

However, Miss French sent copies of her correspondence regarding these offers to Mr Snowball for the BBC. It is not clear what his role was, and the parties were not in a position to help us. In these circumstances it would be hard to say whether Miss French was treating the offers as open (but it may be that Mr Snowball, whose intervention had apparently facilitated the mediation, was being treated as an “insider”): but in any event it is not clear that Miss French could waive any privilege unilaterally, without Groupama’s agreement.

Fortunately, we do not have to decide this issue.

The judge relied on Stokes for the purpose of treating Groupama’s letters as quasi Part 36 offers. It is therefore necessary to say something about Part 36. To find its original form, one has to go back to the 2006 White Book, for it was amended with effect from 6 April 2007. It was the original Part 36 which was in force at the time of the offers in question, although the new Part 36 had been published and was coming down the line.

The CPR introduced the so-called “Part 36 offer”. In Part 36’s original form, a Part 36 offer could only be made after proceedings had started (rule 36.2(4)(a)) and only, save for irrelevant exceptions, by means of a payment into court (rule 36.3(1)), a so-called “Part 36 payment”. A Part 36 payment could only be made after proceedings had started (rule 36.3(2)). A Part 36 offer had to state whether it related to the whole of a claim or only to parts of it (rule 36.5(3)(a)). A Part 36 offer made not less than 21 days before the start of the trial had to state that it remained open for acceptance for 21 days and that after 21 days it could be accepted only if the parties agreed the liability for costs or the court gave permission (rule 36.5(6)). However, the offer could be withdrawn at any time, but if it was, it could not have the consequences set out in Part 36 (rule 36.5(8) and Scammell v. Dicker [2001] 1 WLR 631 (CA)). Those consequences were that, if a claimant failed to better a Part 36 payment, then “Unless it considers it unjust to do so, the court will order the claimant to pay any costs incurred by the defendant after the latest date on which the payment or offer could have been accepted without needing the permission of the court”, ie 21 days from the date of the offer (rule 36.20(2)). However, a Part 36 payment could be withdrawn only with the permission of the court (rule 36.6(5)).

Rule 36.1(2) also provided that “Nothing in this Part prevents a party making an offer to settle in whatever way he chooses, but if that offer is not made in accordance with this Part, it will only have the consequences specified in this Part if the court so orders”.

There was a special provision dealing with offers to settle made before the commencement of proceedings (rule 36.10). An offer made before the commencement of proceedings would be “taken into account” by the court when making any order as to costs if made in accordance with the rule: viz, the offer “must” be expressed to be open for at least 21 days; it “must”, if made by a person who would be a defendant were proceedings commenced, include “an offer to pay the costs of the offeree incurred up to the date 21 days after the date it was made”; it “must” be supported by a Part 36 payment within 14 days of service of the claim form; and the amount of the payment “must” be not less than the sum offered before proceedings began.

It will be observed that Groupama’s letters failed to meet the requirements of the original Part 36 in a number of ways: it was commenced before proceedings began; it was not supported by a payment into court; it was time limited to expire after 21 days so that it was not available for acceptance thereafter, but had effectively been withdrawn; and the requirements of rule 36.10 were not observed. In the circumstances there was no requirement that the court would even take the offer into account, let alone apply the consequences of Part 36.20.

It was in the context of the original Part 36 that Stokes was decided. The problem that the new provisions of CPR Part 36 threw up was its requirement that in money cases a Part 36 offer had to be accompanied by a Part 36 payment into court. Since the provisions of Part 36 gave a new and substantial impetus to such offers, a flood of money was paid into court which remained isolated there, earning high rates of interest. The question arose as to how Part 36 offers which were not accompanied by a Part 36 payment ought to be treated as a matter of the court’s general discretion under rule 36.1(2) and/or Part 44.3(4)(c).

In Stokes the defendant, a substantial utility company, had trespassed onto the Trustees’ land and cut down some 400 trees. In February 2002 the defendant wrote, expressly “without prejudice save as to costs”, offering £27,000 to replant the trees and £8,000 as additional goodwill, inclusive of interest, in full and final settlement. The offer was made as a Part 36 offer in the clearest of terms (“I set out below the terms of Part 36 offer…in accordance with CPR r 36.10. CPR Pt 36 will apply to this offer…It is open for acceptance within 21 days…In the event of non-acceptance of this offer and the consequent issuing of proceedings the adverse cost consequences set out in CPR r 36.20 will apply…”). The Trustees solicitors replied declining the offer. Proceedings were commenced in December 2002 for £780,000. However, there was no payment into court in accordance with Part 36.10 upon the service of those proceedings. However, in June 2003 the defendant’s solicitors wrote again expressly “without prejudice save as to costs”, offering to pay £18,350 in respect of the Trustees’ costs and to pay £1,445 to take an easement over the land. The offer was rejected. In August 2003 the defendant paid £20,000 into court and confirmed that its earliest offer had been withdrawn. Following trial in September 2004 the Trustees were awarded damages in the sum of £25,600. Thus only the earliest offer had beaten the judgment award. The Trustees’ huge claim had been abandoned only in final speeches.

The judge awarded the Trustees half their costs to take into account their unreasonable approach to the dispute and litigation. This court (Auld and Dyson LJJ) held that the court had a discretion to treat the original offer as having the same effect on costs as a payment into court for the purposes of rule 36.20(2) and that it should usually do so provided four tests were met, which they had been in that case.

Dyson LJ, with whose judgment Auld LJ agreed, said this:

The judge considered that all of these four conditions were met. However, only the third and fourth of them were plainly met. The second of them was plainly not met, for the February offer (it is convenient and sufficient to concentrate on that) for all of its 21 day life until it expired was covered by privilege (as was subsequently agreed). It was not a Calderbank offer. At the time when the offers were made, it was (and remains) uncertain whether the offers were open or privileged, but they were subsequently agreed to have been privileged. It was only after the offers had expired that the privilege was agreed to be waived for the purpose of matters such as costs consequent to judgment. As for the first condition, the offers were all-embracing, so to that extent they were clear, or at any rate the February offer was so: but, although Mr Brown on behalf of Groupama submitted, and the judge accepted, that it was inclusive of everything, including costs, it is not entirely clear to me that costs were included. However, if it was, and Mr Brown has on this appeal continued to submit that it was, then it was not to that extent a quasi Part 36 offer, for such an offer must not include an offer as to costs: see Mitchell v. James [2002] EWCA Civ 997, [2004] 1 WLR 158.

One of the issues in Stokes was whether it made any difference that the offer in that case had been subsequently withdrawn. This court there held that it did not. This issue was considered at paras 32-42. It appears that the critical consideration was whether the offer should have been accepted within its initial 21 day period. If, as it was there found, it should have been, then it did not matter that it was thereafter withdrawn (at para 42). However, the position may be different where a claimant has acted reasonably in not accepting the offer within the 21 day period and the offer is then withdrawn (at para 43). Moreover, there can be no automatic rule, without regard to any other considerations: it is a question of what weight should be given to the offer in each case (at para 37). On the facts of that case, it made no difference that old rule 36.5(8) said that if a Part 36 offer is withdrawn it will not have the consequences set out in Part 36. It was suggested that the inference of that rule was that a withdrawn offer should either never be taken into account, or only exceptionally: but both those submissions were rejected (at paras 39/40).

If I may respectfully say so, those submissions were plainly unacceptable, for they asked that the withdrawn offer not be taken into account, or only exceptionally. However, the question remains not merely whether the withdrawn offer be taken into account but whether Part 36 consequences should ordinarily flow where a Part 36 offer has been withdrawn, and that question becomes all the more insistent where the offer is only a quasi Part 36 offer. It seems to me that, particularly under the new regime (see below), it has become hard to ignore the rules which state that the Part 36 costs consequences (viz the consequences of amended rule 36.14(2) and (3)) “do not apply” to even a Part 36 offer that has been withdrawn. It is, after all, one thing to say that an offer which provides the offeree with less than 21 days to make up his mind is not good enough, another to say that an offer should have been accepted within 21 days, and yet another to say that an offer which might have been accepted after 21 days, had it not been withdrawn, should still have the stringent costs consequences of visiting all costs on the offeree (21 days after the offer) despite the withdrawal. After all, if a mechanistic rule that an offer which beats the judgment should result in all costs being switched to the offeree is to make sense, there needs to be sufficient formality about the making and maintenance of the offer. That formality is provided by the rules, and it is not altogether obvious to see why the mechanistic rule should prima facie survive when the formalities are not observed.

The amended Part 36 came into effect on 6 April 2007, that is to say shortly after the February 2007 letter. By the time Miss French commenced proceedings in March 2009 the amended Part 36 was well in play.

The amended Part 36 made substantial changes to the regime: see Gibbon v. Manchester City Council [2010] EWCA Civ 726, [2010] 1 WLR 2081 and C v. D (also named Middlegreen LP v Dominion Developments (2005) Limited) [2011] EWCA Civ 646. The need for a payment into court was dropped, but it became an essential feature of the Part 36 regime and its consequences that the Part 36 offer was identified as such (rule 36.2(2)), was not time limited, could only be withdrawn formally (rule 36.9(2)), and, if withdrawn, would not carry with it the costs consequences of Part 36 (rule 36.14(6)(a)). The Part 36 consequences where a Part 36 offer had not been beaten by a claimant after judgment applied “unless [the court] considers it unjust”, but those consequences did not apply where the offer did not meet the requirements of Part 36. The former rule 36.1(2), which expressly gave the court the power to apply the costs consequences of Part 36 to an offer not made in accordance with Part 36, was removed and instead the new rule 36.1(2) provides as follows:

Thus there appears to be a new determination in the amended rules to specify carefully what does or does not count as a Part 36 offer with Part 36 consequences. All other admissible offers are relevant to the Part 44 discretion, but they do not carry with them the costs consequences of Part 36. It seems therefore rather harder to formulate a principled approach to the Part 44 discretion that some offers which are not Part 36 offers should nevertheless, in certain circumstances which are not the circumstances of the rules, be treated as though they were Part 36 offers for the purposes of applying Part 36 consequences under Part 44. It is noticeable that Stokes has currently dropped out of the notes in The White Book under Part 36. It may be, therefore – but I do not have to decide this issue because, as stated above, the offers in question in this case could not in any event count as quasi Part 36 offers for the purposes of Stokes – that Stokes should be regarded as dealing primarily with the specific problem of the absence of a Part 36 payment in a context where that was a formal requirement which in certain circumstances added nothing to the value of the offer. Thus it is noticeable that even under the old Part 36 regime, post-Stokes decisions in this court may be understood as underlining that part of the Stokes judgment which said “I emphasise that it is a matter for the discretion of the court”, rather than that part which said that an offer which met the four tests “should usually be treated as having the same effect as a payment into court” (Dyson LJ at paras 23/24). In any event, I emphasise the words “the same effect as a payment into court”. The tests were designed as a form of substitute for such payment; see the opening sentence of Dyson LJ’s para 24. So in Locksley Brown v. Mcasso Music Productions [2005] EWCA Civ 1546 (unreported, 10 November 2005) Neuberger LJ took account of an offer which failed to observe aspects of the old Part 36, but refused to give it the status of a quasi Part 36 offer carrying with it Part 36 consequences. Among the defects and circumstances he pointed to were (a) some uncertainty as to whether the offer was without prejudice or without prejudice save as to costs; (b) the fact that the offeree was a litigant in person; (c) the fact that the offer purported to deal with costs, contrary to Mitchell v. James; and (d) the fact that the offer was only open for 7 days. He said (at para 16):

In the circumstances, I do not think it is necessary to consider the application of the transitional provisions of the Civil Procedure (Amendment No 3) Rules 2006, because they apply strictly only to a “Part 36 offer or Part 36 payment” made before 6 April 2007, whereas in this case no such offer or payment was ever made. The closest that those provisions come to being of any relevance is in para 7(7) of the 2006 Rules, which states that in the case of an offer to settle before commencement of proceedings made before 6 April 2007 and which complied with old rule 36.10 “the court will take that offer into account when making any order as to costs”. However, that goes no further than the Part 44 discretion.

It will be observed that many of the defects in relation to the offer in Locksley Brown cited by Neuberger LJ apply also in this case.

It therefore falls to this court to apply its discretion anew, pursuant to its general discretion under Part 44, and untrammelled by Stokes or the judge’s views.

I would for myself take account of the following matters. In favour of treating Groupama’s offers with all the seriousness of a formal or even quasi Part 36 offer, so that, to put the possible consequences at their highest, Miss French should be required to pay all Groupama’s costs after the expiry of the offer in March 2007, are the following considerations. First, the offer, coming as it did from an insurer, and from its managing director, and after the consideration given to it at a mediation and thereafter in the light of a QC’s advice, was clearly intended to be treated seriously and could be regarded as genuine. It could be relied on, and Groupama could be relied on to pay it, if accepted. Secondly, I accept that, as the judge found, it was worth more than Miss French received from the judgment of the court, even allowing £20,000 for Miss French’s costs up to that time, which seems in any event an excessive figure for a litigant in person. Therefore, on the basis that Miss French’s other claims which were not advanced in her proceedings once commenced added nothing to her claim, Miss French could have avoided all the costs of that litigation if she had accepted the offer when it was made. In that sense, the whole litigation was proved to be unnecessary. Thirdly, the reasons advanced by Miss French for refusing the offer were not good ones. She valued her claims at that time to be potentially worth ten times as much as she had been offered. I do not think that she was saying that she would refuse anything less than a multiple of ten, rather she was saying how much she would be giving up for a settlement, but the fact remains that she appears to have been simply unrealistic about the extent of Groupama’s liability. Fourthly, although the offers appear to have been prima facie privileged and we have not had to decide, in the light of the parties’ subsequent agreement, whether they were open or not, Miss French appears to have approached the litigation on the initial basis that they were open.

There is, however, also much to be said on the other side. First, Miss French was at that time and for a long time thereafter a litigant in person, a factor heavily emphasised by Neuberger LJ in Locksley Brown. That may not always assist such a litigant to a great degree, but in the current case there are many other aspects of the offer which make her lay status particularly relevant. Thus, secondly, the offer, although expressed to be open for 21 days, and therefore to that extent compliant with old rule 36.10 and the general requirement that offers should be open for a sufficient period for consideration, nevertheless was time limited so that it expired after 21 days. That contrasts with the current view of amended Part 36 that, for an offer to have the consequences of Part 36, it must not be time limited, but can only be withdrawn formally by service of a notice of withdrawal on the offeree, and will not have those consequences if withdrawn prior to trial. In other words, for the offeree to be at mercy of those consequences, the offer must lie on the table. That is the new doctrine which has replaced the formality of a payment into court. Thirdly, the offer was not expressed to be a Part 36 offer, or to have been made, in advance of proceedings, pursuant to old rule 36.10, or to have been expressly stated to be open, or to be privileged “save as to costs”: that again flies in the face of both Dyson LJ’s second test and with the new rule 36.2(2)(b) (the offer “must…state on its face that it is intended to have the consequences of Part 36”). Fourthly, the offer expired 21 days after it was made, in March 2007, long before the agreement making it admissible (but only after judgment) had been made in October 2010.

Fifthly, because the offer was made to cover claims which were not advanced by Miss French when she finally commenced proceedings, and because it also covered her costs, which a Part 36 offer should not do, the value of that offer was always hard to evaluate as the proceedings developed. Groupama’s offer was long dead and buried when proceedings commenced in March 2009 or trial approached in October 2010: would Groupama say that it ought to be cut down in the light of the withdrawal of many of Miss French’s former claims, or that it remained in its full, albeit former, glory? Sixthly, Groupama always had the opportunity of serving a formal Part 36 offer at any time and a fortiori once Miss French commenced proceedings, which would have removed most of these difficulties, but it never did so. On the contrary, down to the agreement of 18 October 2010, three days before the commencement of trial, Groupama’s formal position was that its offer letters were privileged. Seventhly, Miss French’s particulars of claim were essentially straightforward: they relied on the agreement which she asserted had been made in December 2002 to reinstate the premises etc. It was Groupama’s defence and counterclaim (21 pages long plus 50 pages of appendices) which complicated the litigation and led to a 6 day trial. Eighthly, Miss French won those arguments: her difficulty was not that she was to be penalised for issues which she had lost, even if she succeeded overall, but that it was said that she should be penalised because the offer of £115,000 in February 2007 was worth more than her judgment of £132,000 in November 2010.

In all these circumstances, I do not think that the judge was right to say that Miss French should pay all Groupama’s costs of the litigation. In any event he did so on a basis (that the offers were open when made, and that Stokes applied) which does not apply. Rather, it seems to me that the fair result is that there should be no order as to costs: no order other than that Miss French should have her costs, if she is entitled to any, down to 21 days after the making of the February offer, ie 8 March 2007. Fairness in all the circumstances is the essence of the Part 44 regime.

I would therefore allow this appeal, quash the judge’s order that Miss French pay all Groupama’s costs of the action and substitute an order that there should be no order as to costs, other than that Groupama should pay Miss French’s costs, if she is entitled to any, down to 21 days after the making of the February 2007 offer.

I agree.

I also agree.