WES FUTURES LTD v ALLEN WILSON CONSTRUCTION LTD

[2016] EWHC 2863 (TCC), Technology and Construction Court, Coulson J, 10 November 2016

Part 36 offer - Meaning of 'the cost of the proceedings' and 'our client's legal costs incurred in the case' - Whether they extended to the costs of adjudication

The claimant carried out sub-contract works for the defendant and made a claim for unpaid invoices of £86,469.21 plus VAT. Various letters were sent on behalf of the claimant to the defendant as it sought to recover the money it believed was owed to it (and it commenced but did not progress to completion of an adjudication in 2015). On 11 February 2016 solicitors acting for the claimant sent a letter to the defendant which was headed 'Without Prejudice Part 36 Offer' and which stated that the claimant was prepared to accept the sum of £65,000 plus VAT in full and final settlement of its claim. The letter continued by stating that if the offer was accepted more than 21 days after the date of the offer the defendant would be 'liable for all our client's legal costs incurred in this case'. The defendant did not make any payment and so in August 2016 the claimant referred the dispute in relation to the unpaid invoices to adjudication. In September 2016 the adjudicator decided that the defendant should pay to the claimant £86,469.21 plus VAT and interest. Matters then took an unexpected turn on 4 November 2016, when solicitors acting for the defendant wrote to say that they accepted the claimant's Part 36 offer of 11 February.