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Warning: exaggerate your Claim and you could face cost consequences

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Warning - exaggerate your claim and you could face consequences
It is important to value a claim accurately before taking your matter to court. It is essential because this vital step ensures that both parties base their pre-action and post-issue negotiations a factual position rather than the matter reach trial and they find the entire basis of their conduct is undermined by a grossly exaggerated claim.

An example of one such claim arose when, in the matter of Duncan V Churm, Oxford County Court (12 September 2014), HHJ Harris QC presided over a case where the figure claimed was exaggerated. The Claimant had commenced proceedings in 2011 and, in 2013, served a Schedule of Loss claiming £1 million. The Schedule of Loss was revised in 2014 to £500,000. The Defendant made a Part 36 Offer of £202,500 in January 2014 and the Claimant accepted the offer in July 2014.

The acceptance of the offer was after the expiry of the relevant Part 36 period. So unless the court ordered otherwise, the Claimant was entitled to recover the costs of proceedings to the date the relevant period expired, and the Claimant was liable for the Defendant’s costs for the period from the expiry of the relevant period to the date of acceptance. This rule is interpreted consistently by the Courts, unless it is unjust to do so.

What was the Judge’s finding?

When reflecting upon the case, the Judge held that, when it can legitimately be inferred that a case would have settled much sooner than it did, if the claim had been reasonable there was “every reason” why it should be reflected in costs. His findings were that the original claim value was likely to have greatly inhibited the prospect of an early settlement and it would be unjust for the Defendant to bear costs incurred when the Claimant was seeking to recover about 5 times what she eventually accepted as the true value of her claim. In this case, the Court ordered that the Claimant pay the Defendant’s costs incurred from the date of service of the initial Schedule of Loss back in 2013. Because the Claimant’s case was grossly exaggerated, she was forced to pay costs to the Defendant, which could have been avoided.

What can we learn from this case?

The case serves as a reminder to all Claimants to be confident in their valuation of their claim and similarly, to Defendants that, well placed Part 36 offers of settlement can be tactically beneficial when there is a distinct lack of evidence supporting a claim.

If you need support in preparing your claim or indeed need some specialised legal assistance in a claim that you wish to pursue – please feel free to ask me any questions below, or contact me on 01604 282 828. I am also on Twitter if you would like me to answer a quick question. (@SarahJCanning)

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