Trustees of Stokes Pension Fund Ltd v. Western Power  Distribution (South West) Plc.

Prior to issuing proceedings, WPD wrote a letter to TSPF  marked “without prejudice save as to costs” offering to  settle the claim for £35,000. The offer was said to be open  for acceptance for 21 days. TSPF did not accept the offer,  which was withdrawn. TSPF issued proceedings but WPD  did not make a payment into court pursuant to CPR 36  Rule 10(3). At trial, TSPF were awarded damages in the  sum of £25,600. The trial judge said that the WPD offer  did not afford any protection in relation to costs because  it had not been followed by a payment into court as  contemplated by the CPR once proceedings had begun and  because it had been withdrawn.  The CA had to decide whether the trial judge was right. LJ  Dyson referred back to the Access to Justice Report 1995  prepared by Lord Woolf, which was the pre-cursor to the  new CPR. Lord Woolf had suggested ending the system of  payments into court and proposed that it should be  permissible to use a Calderbank letter in all cases. These  recommendations were not adopted by the Civil Procedure  Rule Committee.  LJ Dyson then considered the discretion afforded by the  CPR where a claimant recovers less than the amount of an  offer. A simple offer cannot automatically have the costs  protection specified in Part 36. However, LJ Dyson thought  that such an offer should usually be treated as having the  same effect as a payment into court if the following  conditions are satisfied:-

 (i)  The offer must be expressed in clear terms so  there is no doubt about what is being offered; 

(ii)  It should be open for acceptance for at least 21  days and otherwise accord with the substance of  a Calderbank offer; 

(iii)  The offer should be genuine; and 

(iv)  The person making the offer should clearly have  been good for the money at the time when the  offer was made. 

If none of the conditions are satisfied, it is likely that the  court will hold that such an offer affords no cost  protection at all. To the extent that any of the conditions  are not satisfied, the offer should be given less weight  than a payment into court. However, if all the conditions  are met, LJ Dyson could see no reason in principle why the  effect of an offer should differ from that of a payment  into court. The purpose of a payment into court is not to  provide the claimant with security for his judgment if he  succeeds at trial. It is to encourage settlement.  LJ Dyson also considered the effect of the withdrawal. He  noted that if the offer had been accepted within 21 days,  WPD would have paid TSPF’s costs and there would have  been no trial. TSPF would have done better than they did  in fact by refusing the offer. On the material placed  before the Court, LJ Dyson held that TSPF should have  accepted the offer within 21 days. Therefore there were  no grounds on the facts of this case for holding that the  withdrawal of the offer should make any difference to the  costs position.

 

 

This article was originally written and published on the internet by Fenwick Elliot in Aug 2005.

 

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