Part 36 offers - do they serve or deny justice? Sienna Miller v News Group Newspapers

Sienna Miller has settled her phone hacking claim against News Group Newspapers (NGN), the publisher of the Sun newspaper. It is reported that her claim was settled without admission of liability on the part of the Sun, but that substantial damages were paid. On the steps of the Court, she said:

"It was not my choice to be standing here today. I wanted to go to trial. I wanted to expose the criminality that runs through the heart of this corporation. A criminality demonstrated clearly and irrevocably by the evidence which I have seen. I wanted to share News Group's secrets, just as they have shared mine. Unfortunately, that legal recourse is not available to me or to anyone who does not have countless millions of pounds to spend on the pursuit of justice. Until someone comes along who can confront the Murdochs' endless means, all that I have left are these words and they are the truth…"

From that statement we can surmise that NGN made an offer to pay a sum of money by way of damages which Ms Miller felt compelled to accept. The pressure to accept an offer results from the fact that had she proceeded to trial and recovered less than she was offered, she would have been liable for her legal costs and those of NGN which were incurred from the date the offer lapsed.

This risk is confronted daily in claims where offers are made under Part 36 of the Civil Procedure Rules.

Part 36 provides, so far as is likely to be relevant in this case, that a defendant can make a 'Part 36 offer' to pay a sum of money in settlement of a claim (CPR36.6).  Where a Part 36 is accepted within the relevant period (being a specified period of not less than 21 days from the date of the offer), it usually follows that the claimant will be entitled to the costs of the proceedings up to the date of acceptance. Another consequence of acceptance of a Part 36 offer which relates to the whole claim is that the claim will be stayed upon the terms of the offer (CPR 36.14).

However, what is likely to have weighed heavily in consideration of any offer made by NGN, is the rule that if the claim proceeds to trial and the claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer, then the court must, unless it considers it unjust to do so, order that the defendant is entitled to costs and interest from the date on which the relevant period expired (CPR 36.17(4)). "More advantageous", in relation to any money claim or money element of a claim means better in money terms by any amount.

Defendants' offers are made invariably 'without admission of liability', and so are made, principally, in respect of the money element of the claim. So, should the absence of an admission of liability lead the court to conclude that it would be unjust to make a costs order on the usual basis? The rules themselves give an indication of what the court will take into account when considering whether it would be unjust to make the usual order.

The court must take into account all the circumstances of the case, including (a) the terms of any Part 36 offer; (b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial stated the offer was made; (c) the information available to the parties at the time when the Part 36 offer was made; (d) the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated; and (e) whether the offer was a genuine attempt to settle the proceedings (CPR 36.17(5). In deciding whether it would be unjust, it is not open to the court "to make an exception merely because he or she thinks the regime itself harsh or unjust. There must be something about the particular circumstances of the case which take it out of the norm" (Sir David Eady, in Downing v Peterborough & Stamford Hospitals NHS Foundation Trust [2014] EWHC 4216 (QB)).

The question of whether the court can depart from the usual rule has been considered in other phone hacking cases.

In Yentob v MGN Ltd [2015] EWCA Civ 1292, the Court of Appeal upheld a decision of Mann J to depart from the usual order on the grounds that only limited admissions had been made and it was unlikely that the defendant would have agreed to make a statement in open court. However, in the judgment of Mann J, approved on appeal, he said: “In what I might call a more normal case, it seems to me that the desire to have a trial in order to have a finding of a judge in public as to what happened is unlikely to be a legitimate objective in Part 36 terms so as to justify a claimant refusing to accept a Part 36 offer and insisting on going to trial.”

The absence of an apology was considered in Ali v Channel 5 Broadcast Ltd [2018] EWHC 840 (Ch), and Arnold J held (distinguishing Yentob as an “exceptional case”) that it was not unjust to impose the ordinary costs consequences of failing to beat a monetary offer in a misuse of private information case where there was no offered apology.

Therefore, proceeding with the claim because there was no admission of liability or to achieve a finding in public as to what happened may not have protected Ms Miller from the adverse costs consequences in Part 36.  

The Part 36 regime was originally enacted with the Civil Procedure Rules 1998, which had two prominent policy objectives of improving access to justice through straightforward and transparent procedures and trying to reduce the cost of civil litigation in England and Wales. The raison d'être of Part 36 is to encourage settlement to be reached between the parties to a claim. It is inevitable that some will feel that it denies them justice.