pnBlawg

the professional negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Liability of third party funders / coverage re. costs in PL policies

The Court of Appeal handed down a judgment in the case of Legg & Ors v. Aviva [2016] EWCA Civ 97 yesterday. The case concerned the scope and application of the rule relating to a party’s ability to secure an adverse costs order against a third party who funded the unsuccessful claim by a claimant /defence of a defendant.  Additionally it concerned the proper approach to the interpretation of a “costs” term in the Defendant’s “Public Liability” policy.    The short message in relation to the first issue is that Insurers cannot choose to inter-meddle in litigation against their Assured without facing the costs consequences when the claim against the Assured is ultimately successful.  The choice for the Insurer is to decide whether or not the claim brought against its Assured falls within or outwith the cover afforded by the policy and to act consistently with that decision.  If the decision reached is that the claim is not covered by the policy terms then it should stay out of the litigation against its Assured and await any subsequent claim that may be brought against it under the provisions of the Third Party (Rights against Insurers) Act 1930, which it can then contest on that very ground.  If, on the other hand, the Insurer chooses to become involved in supporting its Assured in seeking to defeat the claim against the Assured it will probably be found to have chosen to become a third party funder in that litigation and, so, be at risk of an application under s.51 of the Superior Courts Act 1981.  The second message for Insurers is that, if they consent to the incurring of costs by an Assured in defending a claim, they will only avoid liability to meet the costs of the party which succeeds in its claim against the Assured if its policy wording quite specifically excludes liability for such costs.  Whether such an exclusion of liability for costs incurred with Insurers’ consent is a readily marketable product is another matter altogether.    

Costs Budgeting: are incurred costs untouchable?

How do you get around costs budgeting? One might have thought that incurring as much by way of costs as you can before the CCMC: Practice direction 3E 7.4 states that the court may not approve costs incurred before the date of a budget. In CIP Properties Ltd v Galliford Try Infrastructure [2015] EWHC 481 Coulson J came up with an order which would prevent parties to litigation trying to get around the process. In the recent case of GSK Project Management Ltd v QPR Holdings Limited [2015] EWHC 2274 Stuart-Smith J made a similar order (will it become known as a ‘Coulson Order’ or a ‘CIP Order?) In GSK Stuart-Smith J was managing the costs in a dispute over works carried out at Queens Park Rangers’ Loftus Road ground. The claim was essentially for £805,675 of unpaid sums due under the contract and there was a counterclaim for defective works. The claimant’s costs budget was for £824,038 and it stated that over £310,000 had been incurred already. The budget therefore exceeded the sums at stake. The defendant’s budget was £455,554 in total although, as the judge commented, a comparison was not appropriate because of the very different hourly rates; comparing the hours was therefore more illuminating. ‘Broad brush’ or detailed approach? Stuart-Smith J commented that experience in the TCC had shown that most costs budgeting reviews can and should be carried out quickly and with the application of a fairly broad brush. He said that ‘only exceptionally will it be appropriate or necessary to go through a Precedent H with a fine tooth-comb, analysing the makeup of figures in detail.’ This, however, he considered an exceptional case because the aggregate sum was so disproportionate to the sums at stake and the length and complexity of the case. Proportionality: The judge’s starting point was that a case would have to be wholly exceptional to render a costs budget of £824,000 proportional for the recovery of £805,000 plus interest. It was not. There were no novel or difficult issues of law, there was only a handful of witnesses, trial had only been listed for 4 days and it was not a document heavy case. He took the view that good reason would need to be shown to justify more than half the figure of £825,000 on proportionality grounds. Reasonableness: the judge rejected the submission that his starting point should be the other party’s budget as parties have different roles and responsibilities. However he accepted he should have regard to it as it ‘may provide useful indicators’. The judge rebuffed a submission that the Defendant had underestimated the resources necessary for the litigation with the comment that such a submission would “probably require evidence and not mere assertion”. That evidence was not available. Pre-action costs: the lesson to draw from the judge’s comments is that if pre-action costs/hours are high then a judge is likely to expect solicitors to be ‘well on top of the case by the time of issue’. If little progress has been made the judge is likely to consider the time has ‘not been reasonably or proportionately incurred.’ The judge said that if he could approve pre-action costs he would have approved £13,500 rather than the £43,067 incurred. Issue/statements of case: the incurred costs for this phase were £246,908. The judge was very critical of the lack of explanation of what had been done during the hours billed given they were so high. He ultimately concluded that £115,000 would have been a reasonable and proportionate expenditure on this phase. Remaining phases: the judge took a hatchet to the remaining phases of the budget on the basis of what he considered reasonable and proportionate. By the time he had finished he had reduced it to £422,622 which, as “it turns out” (he observed), was almost exactly the same as his first assessment of proportionality of the sums being estimated. He then rounded the budget up to £425,000. The court’s difficulty: The problem for the judge was that his £425,000 would have involved substituting his figures for incurred costs which he was not entitled to do. The judge referred to the options Coulson J had set out in CIP Properties (AIPT) Limited v Galliford Try Infrastructure Limited [2015] EWHC 481 (TCC) namely: Order a new budget Declining to approve the claimant’s costs budget Set budget figures and allowing the relevant party to take their chances on incurred costs Refuse to allow any further costs Coulson J settled on (iii) but identified the difficulty: it potentially enabled the claimant to ride roughshod over the budgeting process. The incurred costs were untouchable (£310,000 in GSK ) in the budgeting process but if they were allowed on assessment, they would potentially enable the claimant to exceed the budget set at the CCMC. Coulson J’s way around this was to say effectively to any subsequent costs judge, “if you assess the costs incurred above my figure then you will have to reduce the amount for later work because my estimate will need to be adjusted accordingly.” He put it in a more judicial way setting out the figure he approved for each phase and making the following comment: “I take that figure into account when assessing each element of the prospective/estimated costs dealt with below. To the extent that the claimant recovers more than £x.xx on assessment under this head, it would mean that more work had been legitimately done in the earlier stages of the case than I thought, which would in turn mean that less remained to be done in the future. Thus the prospective costs figures approved below would fall to be reduced by an equivalent sum.” Stuart-Smith J adopted the same approach and stated “in this way the incurred costs/approved costs budget will be a total of £425,000.” He referred succintly to “97(a) of CIP Properties”. The judge concluded by describing the costs estimate as “grossly excessive” being overstated by almost 100%. He made the claimant pay the costs of the issue and ordered the claimant’s solicitors to bring the terms of the judgment to the attention of any paying client who had retained them and to notify the court when it had been done.

Shooting Admiral Byng

Admiral Byng was held responsible for the loss of Minorca in 1756. He was relieved of his command, court martialled and shot by a firing squad. Voltaire remarked of the decision to shoot him that it was beneficial to kill an Admiral from time to time “pour encourager les autres”. Although Hildyard J. made reference to Admiral Byng in his judgment in the case of Caliendo v Mishcon de Reya [2014] EWHC 3414 he was not prepared metaphorically to shoot the Claimant’s solicitors, DLA Piper LLP, to encourage the rest of us. DLA were 3 ½ months late in serving notice on the defendant of the existence of a CFA and an ATE policy in a professional negligence claim. They made an application for relief from sanctions at the time of service of proceedings and admitted that they had no good reason for their failure. The judge accepted the serious effect of the ATE/CFA funding arrangements but considered that what mattered for the first limb of the Denton test was the seriousness and significance of late notification. He held that the defendant had not been able to show ‘material prejudice’. This seems a slightly different test from whether or not the breach was ‘serious and significant’ - a failure to pay court fees was given as an example in Denton of a breach which is serious and significant but it cannot be said to cause ‘material prejudice’ to the other party. The judge’s application of the third limb of the Denton test (evaluation all the circumstances of the case so as to deal justly with the case) was interesting. When dealing with the impact on other court users, the judge was keen to emphasise that he was not aware of any specific detriment to court users such as in Mitchell where the adjournment of the cost budget hearing caused an adjournment and the vacating of an asbestosis claim. It is submitted that the test of the impact on other court users has always been difficult – on the one hand information of a specific detriment is rarely likely to be available outside, perhaps, the masters’ corridor but, on the other hand, without such specific detriment the courts and parties will often be merely speculating. The judge did not consider it would be just to withhold relief from sanction. Whereas Denton undoubtedly softened the Mitchell regime, judgments such as this are taking us closer still to the original relief from sanctions test which focused on the requirements of justice – too late to save some of the Admiral Byngs of the past year.

Jackson on Jackson

“It was no part of my recommendations that parties should refrain from agreeing reasonable extensions of time, which neither imperil hearing dates nor otherwise disrupt the proceedings” said Jackson L.J. in Hallam Estates Limited v Teresa Baker [2014] EWCA Civ 661. In Hallam the claimants (paying parties) asked for an extension of time for filing their points of dispute in proceedings for detailed assessment of costs. The defendant had been late in filing her bill of costs. Jackson L.J. held that they had given sensible reasons for asking for the extension and, given her own delay, the defendant could hardly object to a modest extension. Pursuant to r. 3.8(3) the court’s approval was required for such an extension but this should have been no more than a formality. In fact the judge approved it on paper without a hearing and this approach was endorsed by the Court of Appeal. Rule 3.8 is about to be amended to allow parties to agree extensions of time for up to 28 days as long as no hearing dates are imperilled. The parties have a duty to further the overriding objective (which includes allotting an appropriate share of the court’s resources to cases) and thus, according to the great man himself, agreeing reasonable extensions which don’t imperil dates or disrupt the course of litigation is not a breach of a legal representative’s duty to their client. Jackson L.J. made it clear that if an application was made for an extension of time before the expiry of the time permitted by a rule or practice direction the application remained an application for an extension of time even if time expired before the application was heard. He said that the principles governing relief from sanctions were not applicable in these circumstances. As was said in Mitchell itself, it is clearly better to make an application for an extension in advance if a deadline is likely not to be kept. Greater clarity has now been brought to the extent to which parties can agree extensions of time. A number of cases have now emphasised the need to identify whether a court sanction has actually been imposed by breach of a court order, rule or practice direction – not all breaches automatically result in a sanction and therefore it is doubtful that relief from sanctions is required in such circumstances.            

Kelly v Black Horse - reasonableness of ATE premiums in PPI litigation

  Another recent example of the courts’ more robust approach to costs (as to which, see also my earlier posting on Willis v MRJ Rundell & Associates Ltd) is found in Kelly v Black Horse [2013] EWHC B17 (Costs). Kelly was a fully-contested PPI claim which the claimants won. The district judge ordered that the balance of their outstanding loan (£5,200) be written off, that the defendant should re-pay the claimants the sum of £6,000 and that the claimants should receive 70% of their costs, to be subject to detailed assessment if not agreed. Senior Costs Judge Hurst conducted the assessment. One issue for him to decide was whether the claimants were entitled to recover in full their ATE premium, which had cost them £15,900. On any analysis the premium paid was high when compared to both parties’ costs - the claimants’ base costs were in the region of £14,000 whereas the defendant’s costs were £5,837.10. The judge decided that it was not reasonable for the defendant to have to pay the full ATE premium and he set out his reasons for reaching that decision in a written judgment ‘in the hope that this may assist in resolving future disputes in this area’. As part of his decision, he rejected the claimants’ risk assessment as being ‘entirely meaningless’ and substituted a success fee of 53.85% (based on a 65% chance of success) in place of the 100% originally claimed. He then analysed the reasonableness of the ATE premium by first calculating the so-called ‘burn premium’ (i.e. the risk of paying out multiplied by the claimants’ estimated maximum liability) and then increasing that figure by an appropriate percentage to reflect brokerage and profit. The judge found that the claimants’ maximum liability was £7,243.30 (i.e. claimants’ disbursements of £1,406.20 plus defendant’s costs of £5,837.10) and that they had a 35% chance of being liable for this sum. Thus the burn premium was £2,535.16 (0.35 x £7,243.30), which when uplifted by 25% to reflect brokerage and profit, produced an appropriate figure of only £3,168.95. Even if the potential costs exposure had been anticipated in the region of £8,500, the appropriate figure to pay by way of ATE premium would have been no more than £3,677.63. The judge therefore concluded as follows: ‘There is no doubt that the ATE premium sought in this case is wholly disproportionate… I have been given no evidence as to the information which was given to the ATE insurers to enable them to rate the policy, but, given the risk assessment completed for the purpose of the CFA, which was entirely meaningless, it is safe to assume that the insurers were not given accurate information.’ In those circumstances the judge decided that it was only reasonable to expect the defendant to pay 25% of the premium claimed of £15,000, which produced a figure of £3,750. This figure compared favourably with the earlier figures calculated by reference to the burn premium. It is suggested that this decision reflects a greater willingness on the part of the courts to analyse the reasonableness of ATE premiums, without recourse to expert evidence. Potentially also, it heralds a significant reductions in the level of legal costs that the defendants are required to pay to successful PPI claimants.    

Michael v Middleton - relief from sanctions under CPR 3.9 and solicitors negligence claims

Litigation solicitors up and down the country are no doubt assessing the implications of the latest procedural changes with an eye to their own risk management profile. Of particular importance has been the change to the provisions concerning relief from sanctions under CPR 3.9. The recent decision of Michael v Middleton [2013] EWHC 2881 (Ch) illustrates how tough the courts are becoming in implementing the Jackson reforms. It also raises the possibility of more solicitors’ negligence litigation in the future if caseloads are not managed efficiently. The case was a dispute between claimant business owners and their solicitor, the defendant. A key issue was how the defendant was to be paid, the defendant’s account being that he was to be given an interest in the claimants’ business as part of his remuneration. The claimants issued proceedings but failed to provide satisfactory disclosure and, in 2012, the claim was struck out for non-compliance with an `unless’ order. Approximately one year later (2013) the claimants instructed new solicitors but then waited for several months before finally issuing an application for relief from sanctions under CPR 3.9. It was accepted by the parties that the struck-out claim was not time-barred and that the claimants had been badly let down by their first solicitors. It was also in issue whether the second solicitors had unreasonably delayed in issuing the application for relief. HHJ David Cooke refused the claimants’ application for relief and stated that granting relief would ‘send a wrong message`. As part of his decision, he focussed on two specific aims of CPR 3.9 – conducting litigation efficiently and saving costs, and enforcing compliance with orders. Of particular relevance here, the Judge considered and rejected the submission that any claimant, who was denied relief, was bound to be disadvantaged by having to sue his solicitor instead. On the Judge’s findings, it was still open to the claimants to bring a fresh claim against the defendant, without being met either by limitation or abuse of process arguments. Nevertheless the implications of this decision are that the courts are going to adopt a less pragmatic approach to applications for relief. Instead of granting relief on the (unspoken) basis that there is little point in forcing a claimant to re-start the litigation, they are going to adopt a tough approach with potentially far-reaching consequences for any solicitor having conduct of the litigation at any stage.      

Costs budgets and professional negligence claims

 Many lawyers are no doubt wondering how the new costs rules, particularly those as to costs budgets, will affect litigation in the future. The recent decision of Mr Justice Coulson in the Willis v MRJ Rundell & Associates Ltd & Anor [2013] EWHC 2923 (TCC) provides some helpful pointers.  The case, which was run under the costs management pilot in the TCC, involved a £1.1m professional negligence claim against a firm of construction professionals. At a costs management hearing in September 2013, both parties submitted costs budgets - £897,369 for the claimant and £703,130 for the defendant. The judge refused to approve either party’s ‘disproportionate’ costs budgets.  The judge had some interesting comments to make on costs budgets and the issue of proportionality. He stated that costs-budgeting was an important tool by which the courts endeavoured to control the costs of civil litigation. In the instant case he considered that the costs budgets were disproportionate and unreasonable because it would ‘cost significantly more to fight this case than the claimant [would] ever recover.’  On professional negligence claims, the judge had the following comments to make. He recognised that they would be more costly than other commercial disputes because they required expert evidence. He also recognised the fact that the courts, when considering proportionality, needed to make due allowance for the ‘for the non-quantifiable, but potentially serious, damage to the defendant’s professional reputation’ that might be caused by claims of this type.  Finally the judge articulated the test of proportionality in the following way:  ‘It seems to me that one test of proportionality is whether the trial is likely to be an end in itself, or merely a lesser part of the process which the parties will use in order to put themselves in the strongest position to argue that, subsequently, the other side should pay all or most of their costs. When the costs on each side are much higher than the amount claimed/recovered, the latter is almost inevitable.’  Fortunately for the parties, the judge explained that the absence of an approved costs budget did not mean the successful party would recover no costs at all. He stated as follows:    ‘However, I should add that, although I am aware that some have taken the view that the absence of an approved costs budget means that that party will recover no costs at all, I do not believe that such a draconian approach is in accordance with the letter or the spirit of the new costs rules or 51G PD.’   This case illustrates the need, as the judge explained, for ‘all litigants and their solicitors [to] get to grips with and comply with the new regime as soon as possible.  

The Return of the Omni Ombudsman

Our regular readers will recall that we recently blogged about the Legal Ombudsman’s interest in providing redress for clients of non-legal professionals. This is not the only area where LeO's domain may expand. The Legal Services Consumer Panel reported last year that non-client third parties should have a right of redress from LeO. The Panel has since looked into the  2,184 complaints from non-clients that LeO turned away last year for want of jurisdiction. Earlier this week the Panel published 39 case studies to illustrate the sorts of complaints that might merit redress by LeO. The case studies include conveyancing horrors, aggressive debt recovery, unpleasant experiences at court and failures to administer estates properly. A number of the case studies concern situations in which the legal professional would or might owe a duty of care to the complainant. LeO's rules allow for a complaint to be dismissed or discontinued if it would be more suitable for the issue to be dealt with by a court, but the Panel thought that the costs of going to court meant that redress by LeO might be the only realistic prospect of getting justice for some complainants. As a change to the classes of complainant to LeO requires an order of the Lord Chancellor under the Legal Services Act 2007 it might be sometime before non-clients can obtain redess from LeO. In the meantime the case studies should provide a rich source of inspiration to those setting interview questions, tort examinations and moot problems.  

Lawyers' liability for costs

  A recent decision of Mr Justice Edwards-Stuart in the Technology And Construction Court (“TCC”) in Webb Resolutions Ltd v JV Ltd t/a Shepherd Chartered Surveyors [2013] EWHC 509 (TCC) considers lawyers’ obligations when drawing up court orders. The Claimants were assignees of a centralised mortgage lender suing the Defendant surveyors in respect of three allegedly negligent loans. The issues in the current litigation include the validity of the various assignments, whether or not the lender was negligent or failed to mitigate its losses, and whether the individual valuations were made negligently. This action is one of many such claims brought by the Claimants against surveyors – e.g. Webb Resolutions v E Surv Ltd, which John Bryant considers in his posting on 7 February 2013.   At a CMC held last year, Mr Justice Edwards-Stuart directed that the issues of the validity of the assignments and the lender’s negligence should be tried first and the issue as to the individual valuations be tried separately. He limited disclosure and the exchange of witness evidence to the assignment and lending issues. The Claimants’ solicitors and counsel were, as is the usual practice in the TCC, asked to prepare a draft order for agreement with the Defendant’s legal team.   In his judgment, the Judge described what happened thereafter as being in his experience “unique”. Three days after the hearing, the Defendant was provided with a draft order that “bore no relation” to what the court had directed. In effect the draft order provided for disclosure, exchange of witness evidence and expert evidence on all issues, as opposed to the Judge’s more limited directions concerning the lending and assignment issues. Not surprisingly the Defendant was unable to agree the Claimants’ draft order and therefore provided its own version. The Claimants’ lawyers responded by returning the Defendant’s draft with extensive amendments, which were in turn unacceptable to the Defendant’s legal team.   In the course of correspondence with the parties’ solicitors, the court indicated that the Defendant’s draft reflected the order made at the CMC but that it was open to the Claimants to apply for a variation. Notwithstanding that indication, the Claimants did not agree to the Defendant’s version of the order until shortly before a further CMC. At the CMC the Defendant applied for a costs order against the Claimants’ solicitors.   Mr Justice Edwards-Stuart noted that if a party was charged with drawing up an order, it was the duty of its solicitors and counsel to produce a draft that “fairly reflects what they think the judge decided or directed…” What the Claimants’ solicitors had done in the instant case was produce an order that reflected the directions that they or their clients would like to have had, but not what the court ordered. This was, in the Judge’s view, “wholly unacceptable…. [and] not just unreasonable… [but] verging on the contumelious…” In making a costs order against the Claimants’ solicitors, the Judge stated that solicitors and counsel “had to give effect to court orders…. They [were] not to attempt to manipulate them to their own or their client’s perceived advantage…”   On a practical note, the Judge observed that where parties cannot agree precisely on what the judge directed (or intended to direct), the point or points in issue are usually raised with the court in correspondence and resolved by the judge without a further hearing. Further it is always open to a party unhappy with a draft to apply for either a variation of the order (under the provision giving permission to restore) or permission to appeal.    

Disclosure under the Professional Negligence Pre-Action Protocol: Webb Resolutions Ltd v Waller Needham & Green [2012]

Non-compliance by claimants with their disclosure obligations under the Professional Negligence Pre-Action Protocol can prove an expensive mistake.  Webb Resolutions Ltd v Waller Needham & Green [2012] EWHC 3529 (Ch) shows why.   The Claimant, a purchaser of mortgage loans from institutional lenders – c.f. the preceding post – wished to sue the Defendant solicitors who had been engaged by the original lender.  In July 2010 it sent the Defendant a Letter of Claim.  After initial exchanges the Defendant wrote in January 2011 requesting sight of 12 classes of documents which it said it needed to prepare its Letter of Response.  The Claimant asserted that the documents were for the most part unnecessary and that no more would be provided until liability was admitted.  In May 2011 the Claimant made a Part 36 Offer on the usual 21-day terms.  The Defendant objected that it could neither serve a Letter of Response nor advise on the merits of the offer without receipt of the requested documents.   The Claimant was having none of that.  In September 2011 it went ahead and issued proceedings.  In its Defence the Defendant pleaded extensively from the Protocol and repeated its stance regarding the documents.  In March 2012 the Claimant provided standard disclosure, inspection took place, and in May 2012 the Defendant accepted the Part 36 Offer made a year earlier.   As the offer had been accepted after expiry of the 21-day period the automatic costs provision in rule 36.10(1) – defendant pays all – no longer applied, and instead costs became a matter for the court’s discretion under rule 36.10(4).  The default setting in that situation is that the claimant gets his costs up to the date when the relevant period expires, and the offeree is liable for the offeror’s costs thereafter until acceptance: rule 36.10(5).  The court should depart from the normal order only if it would be unjust not to, having regard to all the circumstances but in particular the four matters set out in the analogous rule 36.14(4): SG v Hewitt [2012] EWCA Civ 1053.   In this case the normal order would have resulted in the Defendant paying all of the Claimant’s costs both before and after issue.  However the judge (John Baldwin QC sitting as a deputy) was underwhelmed by the Claimant’s conduct.  He noted that the stated aim of the Protocol (paragraph A2) is to establish a framework in which there is an early exchange of information so that the claim can be fully investigated and, if possible, resolved without the need for litigation.  He found that although the Defendant’s early requests for disclosure were overambitious the Defendant had made out a good case for why it needed some of the documents and the Claimant, if acting reasonably, would have supplied copies of the files and not merely extracts from them.  By failing to do so the Claimant offended against the letter and the spirit of the Protocol.  That justified a departure from the normal order.   What order to make instead?  The judge began by holding that the Defendant should pay the Claimant’s costs incurred up until the end of the 21-day period (i.e. until June 2011), notwithstanding that the Defendant had been awaiting sight of the documents since the previous January.  He rejected the Defendant’s argument that the Claimant’s costs should be disallowed from that earlier date, reasoning that that would place the Defendant in a better position than if it had accepted the Claimant’s Part 36 Offer in time and the automatic costs order under rule 36.10(1) had taken effect.  It would be “rare indeed”, he said, that a party could improve his position on costs by waiting till the relevant period had expired, so as to take advantage of the more flexible position under rule 36.10(4).   In so saying the judge was perhaps overlooking two things.  First, it didn’t follow that settlement by acceptance of the Claimant’s Part 36 Offer was the best the Defendant could have hoped for.  Given the judge’s finding that the Claimant’s conduct had reduced the prospects of early settlement he could have concluded that, if the disclosure had been provided promptly, the case would probably have settled earlier even than June 2011 - for example, as the result of acceptance of a Part 36 Offer made by the Defendant upon viewing the documents.  (The Defendant had in fact made its own offer as early as December 2010, albeit at a nuisance level.)  So the judge wasn’t bound to treat all costs incurred prior to the end of the 21-day period as necessarily beyond the reach of his discretion.   Secondly, the automatic costs order under rule 36.10(1) is not quite as inflexible as it looks.  In Lahey v Pirelli Tyres Ltd [2007] EWCA Civ 91 the Court of Appeal held that although the rule deprived the court of its general discretionary powers under rule 44.3, nonetheless on any detailed assessment the costs judge could still disallow entire sections of the claimant’s bill of costs on the footing that they were costs "unreasonably incurred": rule 44.4(1).  The Court cited as an example (at [24]) that if the costs judge considered that the claimant had acted unreasonably in refusing an offer to settle made before proceedings were issued, he was entitled to disallow all the costs post-issue.  (See too Re (Edwards & Anor) v Environment Agency & Ors [2010] UKSC 57 at [21].)  So if the judge in Webb Resolutions had deprived the Claimant of some of its costs incurred before June 2011 he wouldn’t necessarily have been rewarding the Defendant for its delay: even if the matter had concluded with an acceptance of the Claimant’s Part 36 Offer, a costs judge could have disallowed just such costs on a detailed assessment anyway.   As for the costs incurred after June 2011, the judge felt unconstrained by the automatic rule and adopted a harder stance.  He held that it was significantly more likely than not that such costs would not have been incurred at all had the Claimant acted reasonably and responded properly to the letters of request for disclosure: by implication, the matter would have settled.  Therefore the Claimant, far from having its costs in respect of that period, should be ordered to pay the equivalent costs incurred by the Defendant.   One further point is worth making.  For the purposes of rule 36.10(1) “the relevant period” for accepting a Part 36 offer means, in the case of an offer made more than 21 days before trial, the period stipulated in the offer letter “or such longer period as the parties agree”: rule 36.3(1)(c)(i).  So a defendant who receives a Part 36 offer at a time when the information available to him is incomplete should be wary of negotiating any extension of time for acceptance until after provision of the missing documents.  If the defendant then accepts the offer within the extended period he will deprive himself of any opportunity to recover any of his own costs from the claimant, because the automatic rule will take effect.  Even if he then delays acceptance until after the extended deadline, he is still likely to be met with the argument that he must bear all the claimant’s costs up to the deadline on the authority of Webb Solutions.  Better, then, to protest at the claimant’s breach of the Protocol and let the original acceptance period go by default.