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Getting the right advice when things go wrong

Is it really all or nothing?

The 2016 case of Jockey Club v Willmott Dixon looked at whether a claimant, who was either going to win or lose should have the benefit of extra costs and interest under a rule that encourages litigants to attempt to settle cases.

Usually the rule envisages a claimant offering to accept, say, £15,000 rather than £20,000, and if they recover £15,000 or more the defendant should have settled, and the defendant pays extra costs and interest. Where cases are not about money, or where the damages are to be decided, offers in relation to liability can also be made in percentage terms. In Jockey Club there was no chance of a result other than win or lose, yet the claimant offered to accept nine per cent of damages.

The defendant bemoaned the tactic, because it did not reflect a possible outcome. The High Court held that while an offer of 98 per cent might have been just too tactical to justify, an offer of 95 per cent represented a willingness to accept a reduction to bring about a certain and early outcome, rather than an assessment of the risk of losing. It remained a valid “Part 36′ offer and penalty costs were awarded, with extra interest likely to follow at the next hearing.

The case of the vanishing car

Another 2016 Case of Hughes v Pendragon Sabre Limited surrounds a claim for failure to sell a limited edition Porsche, a 911 GT3 RS4. The buyer paid a deposit and agreed to buy a Porsche, a contract that was expressed as being conditional on the seller being allocated one to sell. The seller was, but sold it to someone else.

Was this merely an agreement to agree or a binding agreement? After all there was no car, no delivery date – and no price fixed at the time of the contract.

The Sale of Goods Act 1979 (SGA) allows for an agreement to buy “future goods’; so the lack of a date or car did not mean that there was no contract. The SGA also makes it clear that the price can be fixed by a method agreed by the parties. Finally the lack of a delivery time was again not fatal; the SGA implies delivery within a “reasonable time’. A deposit had been paid and an “order form’ completed, which relied on usual terms and conditions, and one of those referred to the price being fixed by the difference between the “importer’s recommended retail price’ and any deposit paid. The Court of Appeal held that that there was a binding agreement. There was an agreement to sell, subject to the contingency of the seller being allocated a car to sell. There was an interesting lack of evidence in terms of assessing damages, and ultimately the Court of Appeal decided that the true measure of loss was to assess what the purchase price of the car had been (£135,000) and what it would cost to buy now (£170,000). The party that failed to buy the car, that could not be guaranteed to exist at the time the contract was made, was awarded £35,000.

These cases show that, if a case does become disputed, having an expert team on hand to select and implement the right tactic based upon proper understanding of the relevant law is key. Anything else will be extremely costly.

John Gordon is a Partner in the Commercial Litigation Team at Wilson Browne Solicitors. To contact John please call 01536 410014, by email at or by visiting www.wilsonbrowne.co.uk.

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