May 2009

Uncertainty Increases Over Offers to Settle Claims

You might think that ‘more advantageous than’ means the same as ‘better’, but this change in wording has led the Court of Appeal to conclude that offers to settle claims in litigation should be interpreted in a new way.

 

 Under the ‘old regime’, an offer to settle a claim (called a Part 36 offer in legal parlance) could be made by a defendant by the payment into court of a sum of money. If the case then went to court and the claimant ‘failed to better’ the payment, the court normally ordered the claimant to pay any costs incurred by the defendant after the latest date on which the payment could be accepted by the claimant. In 2007, the wording of the rules was changed slightly. They now state that costs will be payable if the claimant ‘fails to obtain a judgment more advantageous than a defendant’s Part 36 offer’. There may seem to be no difference, but the Court of Appeal thinks otherwise. In its view, a broader approach must be taken.

 

 In the case in point, a woman who sued BAA plc was awarded damages by the court that were £51 more than the Part 36 offer. She therefore sought payment of all of her legal costs by BAA. BAA disputed her claim, arguing that she had failed to obtain a judgment more advantageous than its offer. The judge sitting in the Central London County Court

agreed with BAA, awarding it costs from the time that the period for acceptance of the offer had expired.

 

 The woman appealed and her appeal was rejected by the Court of Appeal, Ward LJ stating that, “the judge was thus entitled to look at the case broadly and to find on the facts: (i) that the extra £51 gained was more than offset by the irrecoverable costs incurred by the claimant in continuing to contest the case for as long as she did; and (ii) that it was appropriate to make no order for costs for the prior period in light of the manner in which the litigation had been conducted.”

 

 Says Stewart Hinds, “As a result of this decision, although the claimant ‘won’, she was left to cover part of BAA’s costs. In practical terms the effect of this judgment may well be that defendants make lower offers in settlement of claims than they would have done. Furthermore, it creates an area of uncertainty in the law – no longer can a defendant who ‘beats the offer’ be guaranteed more than a Pyrrhic victory and the question of ‘where the line lies’ is likely to take years to make clear.”

 

 If you are making or defending a claim, we can advise you to help achieve a speedy and advantageous result.

 

 

 

 

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Stewart Hinds, Litigation

Where an easement (the ability to use someone else’s land in some way) is granted, it is usual for its terms to state any restrictions which may apply to its use.

 

 Recently, a case came to court where a property was conveyed with a right of way over a pathway over the adjacent property such that access could be obtained to the road from the rear of the property.

 

 The right of way stated that the occupiers of the property had the right of use of the pathway at all times for the purpose of access to or egress from the property for ‘all reasonable use necessary for the proper enjoyment of the property’. Unfortunately for their neighbour, this involved access early in the morning and late at night by visitors. The neighbours took the view that this use was more than was needed ‘for the proper enjoyment of the property’ and sought a ruling to restrict the use of the path.

 

 The judge agreed, ruling that the original purpose of the right of way was to allow access to the rear of the property when access to the front was impracticable. In reaching this decision, he considered two documents which purported to come from the local council (which had sold both properties under

Right of Way – Law, Not Intention, Determines Outcome

the ‘right to buy’ legislation). These stated that the right of way was restricted in various ways. One of these documents, however, was written after the properties had been sold.

 

 On appeal to the Court of Appeal, the decision was reversed. The understanding of the parties at the time of the grant of the right of way was not in point, what mattered was the law which applied. The legal documentation clearly stated that the grant of the right of way applied at all times for the reasonable use of the property. If there had been the intention to limit the right, it should have been contained in the deeds.

 

 “There is no substitute for including any necessary clauses in the original documentation,” says Kim Davey. “This involves the vendor and the purchaser thinking through the possible issues and ensuring that any necessary rights or limitations of rights are dealt with at the time.”

Kim Davey. Conveyancing

Welcome To Our Quarterly Client Newsletter

 

Please do let us have your comments and if there are any other topics that you would like us to include we will try to do so at a later date.

Welcome to our spring Client Update. We hope that the topics included will be of interest. This issue deals with Offers to Settle, Rights of Way, Non-Disclosure, Property Ownership and the benefit of having a Will and LPA.