The recent High Court decision in Learning Curve (NE) Group Ltd v Lewis & Anor [2025] EWHC 2491 provides an important reminder of the consequences of making or failing to accept a settlement offer under CPR Part 36.
Underlying proceedings
The case concerned a Share Purchase Agreement dated 29 October 2021, under which the Claimant acquired shares from the Defendants. The Claimant brought a claim for breach of warranty under an indemnity contained in the Share Purchase Agreement.
On 7 February 2024, the Claimant made a Part 36 offer to settle for £5,211,625, with which the Defendants did not engage. This was unusually the exact same amount that was awarded within the judgment dated 4 August 2025.
Consequential Judgment
The central issues before the Court were whether the Part 36 offer was valid and clear, the application of Part 36 consequences under CPR 36.17(4), the appropriate interest rates on the judgment sum and costs, and the bases of assessment for the costs Orders.
The Defendants argued that the offer was unclear because it did not explicitly take into account their prior payment, while the Claimant contended that the offer was clear and should trigger Part 36 consequences.
HHJ Russen KC held that the Claimant’s Part 36 offer was valid and that the amount awarded under the judgment matched the offer. This meant that the full consequences of CPR 36.17(4) were triggered. The Court rejected the Defendants’ argument that the offer was unclear, noting that they could have sought clarification under CPR 36.9.
Interest was awarded at 2% above the base rate for the period until the expiry of the relevant period, and 8% above the base rate thereafter until the judgment date. The Court ordered costs on the standard basis for work done prior to the expiry of the relevant period and on the indemnity basis thereafter. The Judge ordered a payment on account of costs amounting to £1,257,382, representing 100% of the budgeted costs, and awarded an additional Part 36 amount of £75,000 (which is the maximum amount that can be awarded in accordance with CPR 36.17).
Practical implications
This case highlights the importance of making effective Part 36 offers. A carefully considered and timely offer that is not accepted can lead to substantial additional costs, interest and other consequences. Although the Part 36 offer in this case did not explicitly address the prior payment, the Court found it was sufficiently clear that the Part 36 offer was in respect of the entire claim, including the prior payment. Parties should therefore seek clarification promptly if they are unsure on the terms of a Part 36 offer.
Bethany Collings is an Associate in the Costs and Litigation Funding Team at Clarion Solicitors and can be contacted at bethany.collings@clarionsolicitors.com or on 07774 951949.