Common sense has prevailed in the Court of Appeal following a ruling that fixed recoverable costs in road traffic accident cases are reasonable, even following acceptance of a Part 36 offer.
The case, Solomon v Cromwell Group, saw the claimant’s solicitors argue that, where cases were concluded by acceptance of a Part 36 offer, they were not restricted to fixed recoverable costs as laid out under Part 45, but rather could claim ‘reasonable costs’ provided for by Part 36.10.
On 19 December, the Court of Appeal handed down its judgment that fixed recoverable costs are ‘reasonable’ and that they could not claim more than was laid out under Part 45 Section II unless the parties contracted out of it.
This is welcome news for industry as, had the judgment gone the other way, insurers would have been penalised for settling prior to proceedings with a Part 36 offer. It would have removed the certainty of costs that Part 45 provides and removed the ability of an insurer to properly protect itself against adverse costs, going against the whole purpose of the pre-action protocols and the Civil Procedure Rules.
