Optical Express Ltd and others v Associated Newspapers Ltd
21 November 2017
The High Court of England and Wales have recently considered an application for costs in a libel case in which a Part 36 offer had been made and initially refused but later accepted at a late stage of the proceedings.
The claimants in this case, Optical Express, had issued proceedings for an injunction and damages in respect of an alleged libel and malicious falsehood in an article published by the defendant in the Mail Online and the Daily Mail. The article was entitled “Blindness fear over eye surgery at High Street Clinic: Patients left with worse sight after lens implant” and related to the claimant’s operation of refractive eye surgery.
The defendant initially made a Calderbank offer in the sum of £25,000 for general damages only but this was not accepted. A qualified Offer of Amends was also made at this time and this was promptly accepted.
The claimants then produced particulars of their claim which valued it at £6.59m. However, this later rose to some £21.5m. The defendant thereafter made a Part 36 offer in the sum of £125,000, with £100,000 of same attributed to special damages. The claimants rejected this offer as ‘wholly derisory’. Thereafter forensic accountancy evidence was served which valued the claim at £17m. Approximately ten weeks thereafter the claimants accepted the Part 36 offer and both sides applied to the court regarding the issue of costs.
The court held that the default costs order would be unjust in this case due to the various unique factors at play. The claim as pleaded was huge and the offer as accepted represented a very small proportion of same. The offer was initially promptly rejected as being derisory and then later accepted with no explanation offered in respect of same. The court found that in the absence of any explanation, it was permissible to infer that the belated acceptance was due to a reassessment of the claim which could and should have been made earlier.
The court found that the claimant’s conduct was highly unreasonable and as such found that it would be unjust to make the usual order as to costs. The court ordered that the claimants should recover their costs up to a date on which the court determined the date for acceptance of the Part 36 order would have been, had the claimants acted reasonably in the provision of information, and the defendant should recover its costs from this date. The court held that the defendant should recover its costs on an indemnity basis from the date on which the relevant period for acceptance of the Part 36 offer expired.
The court had no hesitation in finding that the costs in this matter should be set off against one another, however, the court refused to delay payment of the agreed damages, as had been advocated for by the defendant.
It is of note that Order 36 offers do not apply in Northern Ireland, however, it is likely that this jurisprudence will now be relied upon in cases involving defendant’s lodgements.