Solicitors Costs – No Win, No Fee?
This blog is written for members of the public and not solicitors. So when you seek advice from a Solicitor and the solicitor mentions a phrase called a “Part 36 offer” you will probably look at him or her with a blanc expression. So what is a Part 36 offer?
In simple terms it is part of the Court’s rules when a party takes action against the other. So in a personal injury claim, for instance, if the insurance company for the Defendant admits that their insured was at fault for the accident, it will entertain the injured party to an award of compensation.
Thus if the Defendant insurance company thinks the personal injury claim is worth say £10,000 it will make an offer which it can communicate to the Claimant’s injury solicitor as a “Part 36 offer” the name of the Court Rules. If an offer is made it puts a cost penalty on the injured victim to seriously consider settling the claim for that amount. Why? Well, if the injured claimant rejects the Part 36 offer and proceeds all the way to court and the Judge awards him/her say £9,5000 it would mean that all the legal costs that have been incurred since the Part 36 offer was made was a complete waste of time. The injured victim had made the personal injury solicitors do all that work and wasted one or two days in court and done no better than what was offered earlier in the case.
As a result the costs penalties arising from the Part 36 offer come into play, even though the injured claimant had won the case and obtained compensation, the claimant will have to pay the Defendant’s insurance company its legal costs and his/her own legal costs subject to legal insurance and the contract with the claimant’s own solicitors.
But something different – No Win, No Fee Solicitors.
In a recent phone hacking case, Yentob v MGN Ltd  EWCA Civ 1292 the Court of Appeal decided not to protect the Claimant from a cost penalty of a Part 36 offer. Here the Court found that to award a penalty against the Claimant would be unjust and advised that the Claimant, whilst being unable to obtain his own solicitors costs post Part 36 offer, was nevertheless not required to pay the Defendant’s costs post Part 36 offer. This is a victory of common sense. The reason for the order was that the judge was of the view, due to the special nature of the case, that the full evidence would not become available until the actual hearing and thus the Claimant and Solicitors were unable to make a full and informed view on the Part 36 offer.
The courts were reminding solicitors that this was a rare exception to the general rule under the Part 36 provisions.