Dispute Resolution analysis: The High Court has adopted a flexible approach to the award of enhanced cost consequences in respect of a beaten Part 36 offer which represented a genuine attempt to settle a claim but not the proceedings as a whole.
Matiere SAS (a company incorporated under the laws of France) v ABM Precast Solutions Ltd [2025] EWHC 2030 (TCC)
What are the practical implications of this case?
This decision suggests that there is scope to apply a flexible approach to the granting of consequential relief in circumstances where a Part 36 offer is beaten at trial but the court is not satisfied that the offer itself was a genuine attempt to settle the proceedings as a whole. It explores the appropriate steps for the court to take where a Part 36 offer represents a genuine attempt to settle a claim within a set of proceedings but effectively disregards a much higher value counterclaim within those same proceedings. It rejects the idea that the enhanced cost consequences in Part 36 are 'all or nothing' in character and suggests that it is both permissible and appropriate to award enhanced cost consequences in respect of a claim whilst ordering the costs of a counterclaim within those same proceedings to be payable on the standard basis only.
What was the background?
In December 2021, a claim was issued by Matiere SAS (Matiere) in the sum of £373,295.06 in respect of unpaid invoices against ABM Precast Solutions Ltd (ABM). Around half of those invoice debts were admitted by ABM but a set-off was raised in respect of a substantial counterclaim arising out of the alleged breach of express good faith obligations found in a consortium agreement. The counterclaim was initially pleaded in the sum of £4.8m in February 2022 but was later revised up on amendment to £18.92m. By the time of trial, for which judgment was handed down on 11 June 2025, almost all the unpaid invoice claim was admitted and the remainder was found to be owing at trial. On 4 April 2022, Matiere made a Part 36 offer in the sum of £350,000. That offer included the following comment, 'our client is aware that the costs of these proceedings will quickly become disproportionate to the value of their claim (disregarding in its entirety, of course, your client's unmeritorious and entirely speculative counterclaim, which is bound to fail) '. At the consequentials hearing, Matiere argued that this was a valid Part 36 offer and that the full consequences set out in Part 36 should follow in respect of both the claim and counterclaim unless ABM could cross the formidable obstacle of demonstrating injustice. ABM argued that the Part 36 offer was not a genuine attempt to settle the proceedings, given that the overwhelming majority of the costs were concerned with the counterclaim and that this did not amount to a genuine offer to settle the counterclaim, which had been treated dismissively in the letter.
What did the court decide?
The principal question before the court was whether it would be unjust to apply the full enhanced cost consequences set out in CPR 36.17(4). On the facts of this case, the claim value represented around 8% of the value of the counterclaim. Although the offer amounted to nearly 90% of the claim value, it necessarily presupposed the complete failure of the counterclaim. The court concluded that it did not amount to a genuine offer to settle the proceedings as a whole, however, was a genuine attempt to settle the original claim. The court was satisfied that CPR 36.17(5)(e)could be applied flexibly in such circumstances to take account of this distinction. The court rejected the submission that ABM did not have sufficient information before it to justify the application of the enhanced cost consequences, simply because the offer was made prior to disclosure and the exchange of witness evidence. The court decided that Matiere should be entitled to its costs of the claim on a standard basis up to the relevant date effected by the Part 36 offer and on the indemnity basis thereafter. However, Matiere was entitled to its costs of the counterclaim on a standard basis only throughout.
Case details
- Court: High Court of Justice (Technology and Construction Court)
- Judge: Alexander Nissen KC (sitting as a Deputy High Court Judge)
- Date of judgment: 31 July 2025
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