The judgment of Mr Justice Bryan in Assetco Plc v Grant Thornton UK LLP [2019] EWHC 592 (Comm) provides a helpful review of the principles and authorities relating to the approach to be adopted when a claimant beats their own Part 36 offer, in particular in relation to interest.


The claimant had succeeded at trial in obtaining judgment for over £22 million. The claimant had made two Part 36 offers to settle, one for £10 million, the other for £17 million.  Both offers were comfortably beaten.  Given the sums involved the rate of interest to be applied is of some considerable significance.


    1. The consequences of this are set out in CPR r.36.17. In summary where, as here, the claimant has obtained a judgment against the defendant which is at least as advantageous to the claimant as proposals contained in a claimant’s Part 36 offer, the court must, unless it considers it unjust to do so, order that the claimant is entitled to (a) interest on the whole or part of any sum of money, excluding interest awarded at a rate not exceeding 10 per cent above base rate, for some or all of the period starting with the date on which the relevant period expired; (b) costs (including any recoverable pre-action costs) on the indemnity basis from the date on which the relevant period expired; (c) interest on those costs at a rate not exceeding 10 per cent above base rate, and (d) an additional amount which shall not exceed £75,000, calculated as set out in CPR 36.17. CPR 36.17(5) provides:
“In considering whether it would be unjust to make the orders referred to in [inter alia CPR 36.17 sub-paragraph (4)], the court must take into account all the circumstances of the case including—
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(c) the information available to the parties at the time when the Part 36 offer was made;
(d) the conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated; and

(e) whether the offer was a genuine attempt to settle the proceedings.”

  1. There is no suggestion that AssetCo’s Part 36 offers were not compliant with Part 36 or were not genuine attempts to settle and, in the light of the Liability and Quantum Judgments, and AssetCo’s Part 36 offers, Grant Thornton does not resist an order that it pays (i) costs assessed on the standard basis up to 14 December 2016, together with compensatory interest on such costs; (ii) costs assessed on the indemnity basis from 15 December 2016, together with compensatory interest on such costs; (iii) interest on the principal sum due at a compensatory rate up to 14 December 2016 and at an enhanced rate from 15 December 2016, and (iv) an additional amount of £75,000.


The judgment deals with the principles and authorities in relation to compensatory interest.   The judge awarded a blended rate of three month LIBOR plus 2%.

  1. Turning then to the percentage over the rate, and bearing in mind the submissions of both parties and the authorities that I have identified, I bear in mind the evidence of Mr Davies in relation to the cost of the borrowing, but only insofar as that might be said to be some indication of what other companies with similar characteristics might borrow at. I also bear in mind Mr Cuerden’s evidence which, on the whole, I found more useful in relation to the average margin that has been identified. I also bear in mind Mr Wolfson’s points in relation to the fact that for a substantial period AssetCo were cash rich, although I consider the likelihood is that they will have had some borrowing, although I do not have actual evidence before me, though I would not expect such evidence, nor would it be appropriate to have detailed evidence before me in relation to individual borrowers or depositors.
  2. That being the case, and bearing well in mind all the points that have been canvassed before me, I take what I would describe, in accordance with the authorities, as a blended rate of three month LIBOR plus 2 per cent for the requisite period.


The judge set out the basic principles.

  1. CPR r.36.17(4)(a) provides that where a claimant beats its own Part 36 offer the court “must, unless it considers it unjust to do so” order “interest on the whole or part of any sum of money (excluding interest awarded) at a rate not exceeding 10% above base rate for some or all of the period starting with the date on which the relevant period expires”. The default position, therefore, is, as is accepted and common ground, that enhanced interest must be awarded save where this would occasion an injustice.
  2. It is not suggested in this case that injustice would be caused; indeed, it is recognised by Mr Wolfson, on behalf of Grant Thornton, that there should be enhanced interest, but it is submitted that that enhanced level of interest should be only 1 per cent above the compensatory rate. Given that I have already found that the appropriate compensatory rate is 2 per cent above three month LIBOR, that would be a figure of 3 per cent above three month LIBOR. It is also submitted by Mr Wolfson that I can do the calculation in that manner, i.e. not starting from base rate, but I should be alive to the fact that the maximum is 10 per cent above base rate and, if one is in the territory of the top end of the spectrum, one should be careful not to exceed the maximum rate.


The judgment then contains a detailed review of the authorities in relation to enhanced interest.


  1. Ultimately I have to look at all the circumstances of the case. I consider that, at one extreme, the invitation from Mr Wolfson that the appropriate enhanced rate should be 1 per cent above the compensatory rate does not fully reflect the general points of principle, which are identified in the OMV case, that I have already identified. The fact that the whole purpose of the rule is to encourage good practice, the fact that it is a carrot and a stick, the fact that it is important to demonstrate what the consequences are of the Part 36 regime in relation to that, I consider that an appropriate enhancement, in general terms, is likely to be more than 1 per cent above the compensatory rate and certainly, on the facts of the present case, I consider it should be greater than that.
  2. But, equally, at the other end of the spectrum, Mr Templeman invites me, if not to impose the full 10 per cent – he realistically accepts that this case is not as egregious as the Glencore case, indeed, is not an egregious case at all in the sense that it was used in the OMV case – he does nevertheless urge that the uplift should be at the very top end of the spectrum. Mr Wolfson will say that I should be careful not to give too large an uplift because I should leave room for cases which are, as he put it, “more egregious” than this particular case.
  3. Having regard to all the submissions of both parties, which I bear well mind, including those that I have not specifically referred to in this ex tempore judgment, and having regard to the principles in the OMV Petrom case and all the circumstances of this case, I consider that an appropriate enhanced rate is 3 per cent above the compensatory rate. The compensatory rate that I ordered was 2 per cent above LIBOR and I consider the appropriate enhanced rate is 3 per cent above that compensatory rate, that is 5 per cent above LIBOR.


The judge reviewed the principles and decided that interest on costs should be compensatory rather than enhanced.

    1. There is an issue between the parties as to whether the interest on costs should simply be compensatory interest or be enhanced from 14 December 2016. The matter was addressed in the OMV case, at para.43:
“As I have said, I do think that we are bound by the McPhilemy case to decide that the assessment of the rate of interest on costs should be such as to achieve a fairer result for the claimant than would otherwise have been the case. That does not, however, indicate that some of the factors I have already mentioned may not be relevant. Moreover, once again I do not regard the award as purely compensatory. As I have also said, different factors may in practice apply to the enhanced interest under CPR Parts 36.14(3)(a) and (c). That is because account may need to be taken of how the costs, on which an enhanced rate of interest is claimed, were incurred. It could have been, for example, that despite the fact that it was unreasonable to refuse the Part 36 offer, the conduct of the litigation was itself reasonable, so that the costs on which enhanced interest was sought were not incurred in contesting bad points or dishonesty by the defendants. That is not this case – but in some cases, it would be a serious consideration.”
  1. For his part, Mr Templeman invites me to award enhanced interest on costs. There is no doubt that such a power is available to me and it is part of the range of remedies which are set out in the CPR in this situation. However, realistically, Mr Templeman also accepts that the basis for his submission, which is that there has been unreasonable conduct in the sense of going “uphill and down dale” in the litigation and also not responding to Part 36 offers, is to be taken in the light of the findings that I have made earlier in my judgment in relation to that, where I have indicated that, whilst the litigation was conducted “uphill and down dale” and, in certain respects raised points which perhaps ought not have been pursued – such as the Companies Act point and a pleading point taken on interest and the like, this is not one of those cases where there was egregious conduct and, therefore, although I bear those points well in mind, I consider that in circumstances where there are already indemnity costs, and the payment of £75,000, and the enhanced interest which I have already awarded in relation to principal, I do not consider that this would be an appropriate case, on the particular facts of this case, where it is appropriate to award enhanced interest on costs.
  2. The danger would be, in particular, if, for example, I identified specific aspects of the litigation where I thought it could have been conducted differently – for example, the Companies Act point – because we are now dealing with the question of costs and what costs were incurred, one could very easily and erroneously disproportionately reward or penalise, in its most general sense, a party by an award of enhanced interest on costs, given the amounts at stake.
  3. Therefore, on the facts of this particular case, I do not consider it is appropriate to award enhanced interest and, therefore, the interest will be compensatory in the terms I have already ordered.


The judge accepted that there was no point in ordering that part of the bill be prepared electronically. This action had not been costs budgeted.

  1. Practice Direction 47, para.5.1, recently introduced a new rule requiring parties to submit costs bills in a new electronic format in respect of “work undertaken after 6 April 2018”. The prescribed form of the “new” costs bill tracks the categories of costs which apply to costs budgeting under CPR r.3.15.
  2. It is urged upon me by both parties in this case that preparing a costs budget in this form would be a time consuming and costly task. It would also make, it is said, little sense, firstly, as these proceedings were not subject to costs budgeting; secondly, the electronic version of the bill in the new form would only apply to work done after 6 April 2018, and, therefore, it is not likely to be of great assistance to the costs judge if the court were provided with two separate costs bills in different formats. I am, therefore, invited to make an order dispensing with the requirement to submit an electronic costs bill. There is power for me to do so in para.5.1(a)(iii) of Practice Direction 47, which provides that the bills of costs must be electronic bills except, and then (iii), as I say, where the court has otherwise ordered.
  3. I consider that in the circumstances of the present case, where the case has substantially been undertaken prior to that date, and given the costs implications when measured against the likely benefits to the costs judge, this is an appropriate case where I should otherwise order and, therefore, the parties are not required to submit costs bills. It effectively means that AssetCo is not required to submit costs bills in the new electronic format for the reasons that I have given.


The judge ordered that the judgment sums be paid into an account pending an appeal. The question then arose as to what interest should accrue on those sums.


  1. Standing back and viewing this as a matter of principle, it seems to me that AssetCo do have a monetary judgment. The effect of a stay with a payment into court is that they will be out of their money and will not have received any money. I consider therefore, that the correct approach is that post-judgment interest rate be at 8 per cent. That is, in any event, the starting point unless I postponed interest from running, but I consider that that is the right outcome as well because that is the rate, for good reasons or bad, under the Judgments Act 1838, that AssetCo are entitled to on a judgment sum and, in circumstances where they are out of their money in the meantime, I consider that the appropriate order is that it should carry interest at 8 per cent. I will hear discussion as to exactly how this is to be implemented in terms of the amount to be paid in, and the frequency of further payments in to reflect interest, in circumstances where I am satisfied that the interest should also be part of the sum secured.