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A useful judgement tying together the provisions of Part 45 section III and Part 36 of the Civil Procedure Rules
Lord Dyson M.R said,

1. These appeals are concerned with a point of construction which arises from the apparent tension between the rules fixing costs in most lower value personal injury cases (found in section IIIA of Part 45 of the CPR) and the provisions in Part 36 which specifically apply to such claims. The present case concerns the version of Part 36 which applied before 6 April 2015. Although the relevant rules have been renumbered and modified, the provisions applicable to this appeal remain substantially the same. Therefore, apart from numbering, the same issue arises under the current version of Part 36. I shall refer to the version of Part 36 which applied before 6 April 2015.

2. The issue concerns the interplay between the fixed costs prescribed by section IIIA of Part 45 (to which I shall refer as “section IIIA”) and the provision in Part 36 for a claimant to recover assessed costs on the indemnity basis where she obtains a judgment against the defendant which is at least as advantageous to her as the proposals contained in her Part 36 offer. I shall refer to a claimant’s Part 36 offer made in such circumstances as “a successful Part 36 offer”.

22. If rule 45.29B stood alone, then subject to various rules in Part 45 which are immaterial, the only costs allowable in a section IIIA case to a claimant who was awarded costs following judgment in his favour would be “(a) the fixed costs in rule 45.29C and (b) disbursements in accordance with rule 45.29I”. But rule 45.29B does not stand alone. The need to take account of Part 36 offers in section IIIA cases was recognised by the draftsman of the rules. Indeed, rule 36.14A is headed “costs consequences following judgment where section IIIA of Part 45 applies”. Rule 45.29F (8) provides that, where a Part 36 offer is accepted in a section IIIA case, “rule 36.10A will apply instead of this rule”. And rule 45.29F(9) provides that, where in such a case upon judgment being entered the claimant fails to obtain a judgment more advantageous than the claimant’s Part 36 offer, “rule 36.14A will apply instead of this rule”. Rule 45.29F does not, however, make provision as to what should happen where the claimant makes a successful Part 36 offer.

23. The effect of rules 36.14 and 36.14A when read together is that, where a claimant makes a successful Part 36 offer, he is entitled to costs assessed on the indemnity basis. Thus, rule 36.14 is modified only to the extent stated by 36.14A. Since rule 36.14(3) has not been modified by rule 36.14A, it continues to have full force and effect. The tension between rule 45.29B and rule 36.14A must, therefore, be resolved in favour of rule 36.14A. I reach this conclusion as a straightforward matter of interpretation and without recourse to the canon of construction that, where there is a conflict between a specific provision and a general provision, the former takes precedence. As we have seen, there is disagreement as to which is the relevant general provision in the present context. Mr Williams submits that it is rule 36.14; and Mr Laughland submits that it is rule 45.29B. I do not find it necessary to resolve this difference.

25. The effect of rules 36.14 and 36.14A when read together is that, where a claimant makes a successful Part 36 offer, he is entitled to costs assessed on the indemnity basis. Thus, rule 36.14 is modified only to the extent stated by 36.14A. Since rule 36.14(3) has not been modified by rule 36.14A, it continues to have full force and effect. The tension between rule 45.29B and rule 36.14A must, therefore, be resolved in favour of rule 36.14A. I reach this conclusion as a straightforward matter of interpretation and without recourse to the canon of construction that, where there is a conflict between a specific provision and a general provision, the former takes precedence. As we have seen, there is disagreement as to which is the relevant general provision in the present context. Mr Williams submits that it is rule 36.14; and Mr Laughland submits that it is rule 45.29B. I do not find it necessary to resolve this difference.
26. Rule 36.14A(8) provides further support for my conclusion. This provision states that in a section IIIA case the parties (i.e. claimant as well as defendant) are entitled to disbursements allowed in accordance with rule 45.29I in any period for which costs are payable to them. This reflects rule 45.29B(b). If, as Mr Laughland contends, rule 45.29B prevailed over rule 36.14A in any event, this provision would have been unnecessary. It is significant that rule 36.14A does not contain a provision which reflects rule 45.29B(a) and 45.29C. In my view, the fact that rule 36.14A contains provision for payment of disbursements in accordance with rule 45.29B(b), but not for payment of fixed costs in accordance with rule 45.29B(a) confirms that the interpretation that I have adopted above is correct.
I find yet further support for the conclusion that I have reached in the wider contextual points made by Mr Williams to which I have referred at para 13….[They were that
13. This interpretation is consistent with the wider scheme of Part 36, as amended by the 2013 Amendment Rules. Where fixed costs are intended to prevail, Part 36 says so.

First, rule 36.10A is introduced to disapply the right to costs assessed on the standard basis which would otherwise arise where a Part 36 offer is accepted by a claimant in a fixed costs case.

Secondly, rule 36.14A makes specific provision for fixed, rather than assessed, costs in situations other than those where a claimant makes a successful Part 36 offer. Thus, if a defendant’s offer is successful, rule 36.14A provides for the claimant only to recover fixed costs until the effective date of the offer, in place of the usual rule that the claimant will recover standard basis costs until that date. Thereafter, the defendant is also limited to fixed costs (rule 36.14A(7)).

Thirdly, regard should be had to rule 36.21, which deals with offers made within the Ministry of Justice portal process. Here again, the rule specifically provides for fixed, rather than assessed, costs to be payable in such cases, even where the claimant has made a successful Part 36 offer (rule 36.21(4)).]

28. For all these reasons, I do not consider that there is any doubt as to the true meaning of these rules. The tension is clearly resolved in favour of rule 36.14A.
If that were wrong, then it would be legitimate to use the Explanatory Memorandum as an aid to construction (this was not the Explanatory Note to the statutory instrument). That is because the three conditions specified by Lord Browne-Wilkinson in Pepper v Hart [1993] AC 593 would be satisfied.

First, the rules would, in material part, be obscure and/or ambiguous.

Secondly, the Explanatory Memorandum was prepared by the Ministry of Justice (the promoter of the rules) and was laid before Parliament together with the 2013 Amendment Rules. I can see no difference in principle between a statement made in Parliament by a Minister or other promotor of a Bill and an explanatory memorandum laid before Parliament by the promotor of rules. The Rules are subject to the negative resolution procedure. Parliament has no power to amend the Rules, but could have annulled them if it had wished to do so.

Thirdly, the statement in the Explanatory Memorandum relied on by the claimants is clear on the issue which arises on this appeal. It states in terms that, if a claimant makes a successful Part 36 offer:
“the claimant will not be limited to receiving his fixed costs, but will be entitled to costs assessed on the indemnity basis in accordance with rule 36.14.”

Judgment edited for ease of reading.

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