Successful part 36 costs offer gives opportunity to exceed £1500 limit on Provisional Assessment Cos

In Lowin v Portsmouth (reported on Lawtel) Laing J held that the cap of £1500.00 on the profit costs of a provisional assessment under CPR r.47.15(5) did not displace a receiving party’s entitlement to having the costs of that assessment on an indemnity basis under r.36.17(4) where the receiving party had been awarded more than their Part 36 offer for costs.

The effect of this decision, however, is significant for both paying and receiving parties as an early and accurate Part 36 offer in relation to costs gives either the paying party an opportunity to avoid or the receiving party the opportunity to recover indemnity basis costs significantly above the cap of £1500.00 in the event of success.