Lilleyman v Lilleyman & anr (costs) [2012] EWHC 1056 (Ch)

Analysis

Briggs J gave judgment in relation to costs occasioned by Mrs Barbara Lilleyman’s successful claim for reasonable financial provision from the estate of her late husband, reported as Lilleyman v Lilleyman [2012] WTLR 1007.

There had been extensive without prejudice negotiations and offers (both Part 36 offers and without prejudice offers) had been made by both sides. On 27 July 2011, the defendants had made two simultaneous offers: a Part 36 offer (the July Part 36 offer) and a without prejudice offer (the July without prejudice offer). The defendants made a further without prejudice offer on 6 January 2012, the effect of which was disputed. It was contended by Mrs Lilleyman that the January 2012 offer had been effective to withdraw and replace both the July Part 36 offer and the July without prejudice offer. The defendants submitted that it had withdrawn only the July without prejudice offer, leaving the July Part 36 offer in place.

It was common ground that Mrs Lilleyman should have her costs from the estate from the date of issue until 17 August 2011, ie 21 days after the July Part 36 offer was made. However, the effect of Mrs Lilleyman’s failure to beat the July Part 36 offer was in issue. It was submitted on behalf of Mrs Lilleyman that:

1. (i) the defendants’ refusal to concede that the will did not make reasonable provision for Mrs Lilleyman;
2. (ii) the realistic offers that had been made by both sides in a field of legal difficulty; and
3. (iii) the fact that a full application of Part 36 would leave Mrs Lilleyman with less than she reasonably required for her maintenance led to a conclusion that the full costs consequences of Part 36 should not be applied.

Held

1. 1. The offer made in the letter dated 6 January 2012 did not withdraw the July Part 36 offer. It is plain that the subject matter of the letter was the July without prejudice offer. The letter was designed to, and did, keep on foot the July Part 36 offer, while at the same time negotiating without prejudice on different terms (para [12]).
2. 2. Since Mrs Lilleyman has failed to obtain a judgment more advantageous that the July Part 36 offer, the defendants are entitled to their costs and interest on those costs from 17 August 2011 unless it is unjust pursuant to CPR 36.14 (para [14]). The court’s discretion under Part 36 of the Civil Procedure Rules is more constrained than the broad discretion under Part 44. Nonetheless, the court is not disabled from having regard to question of justice and injustice. Otherwise, the offering party could conduct litigation at the offeree’s potential expense without regard to the overriding objective (para [16]).
4. 3. Although the defendants were entirely unrealistic in maintaining that the will made reasonable provision for Mrs Lilleyman, the approach of Mrs Lilleyman had been unrealistically high. While recognising that this is a field of undoubted legal difficulty, Part 36 is designed to encourage settlement of such cases just as much as more simple cases (paras [17]-[18]).
6. 4. Mrs Lilleyman will be left with a modest amount in the context of providing financial security for the rest of her life but this would not amount to an injust within the meaning of Part 36, although it is substantially less than reasonable provision from the estate. The unfortunate reality is that Mrs Lilleyman was, from August 2011, engaged in a high-risk venture. It would be unjust to the defendants to require the costs of the litigation to come out of the estate in light of the generous offer they had made (para [21]).
8. 5. Both sides exchanged irrelevant accusations that had exacerbated what were already hostile relations between the parties (para [3]). The no holds barred way in which the litigation had been pursued meant that there would be injustice in allowing either side full recovery (para [22]). Most of the responsibility lay with the defendants (para 24]).
10. 6 The claimant’s costs incurred up 17 August 2011 would be paid out of the estate with 80% of the defendants’ costs incurred thereafter to be paid by the claimant (para [25]).

JUDGMENT MR JUSTICE BRIGGS: [1] This is my judgment in relation to the costs of and occasioned by Mrs Lilleyman’s claim for reasonable financial provision from the net estate of her late husband. I handed down my judgment on the main claim on 4 April 2012, and then heard extended submissions as to costs for …

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