Part 36 in Judicial Review Costs: Enhanced Interest and Indemnity Basis After Settlement — PM v DPP

Detailed Assessment — 2026-02-24

Deputy Costs Judge Latham rules that Part 36 consequences apply even where a detailed assessment concludes by consent rather than judicial determination. The paying party's plea that it did not intend to trigger enhanced consequences was rejected — settling for £65,000 against a Part 36 offer of £65,542 entitled the claimant to indemnity costs, enhanced interest and a £6,500 additional amount.

Overview

Date: 24 February 2026

Judge: Deputy Costs Judge Latham

Nature of Proceedings: Whether Part 36 consequences under CPR r.36.17(4) apply where a detailed assessment is completed by consent agreement rather than full judicial determination of every item in dispute

Key Issues:

Whether CPR r.36.17 consequences apply where a detailed assessment is concluded by consent rather than judicial determination
Whether a consent order completing a detailed assessment constitutes a "judgment" for Part 36 purposes
The interaction between CPR r.36.17 and CPR r.47.20 in detailed assessment proceedings

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The Facts

A child, PM, was arrested in late 2020 following a police warrant executed at his home concerning access to indecent images online. He made admissions at the scene. After the Youth Offending Team declined the case, the CPS indicated its intention to charge. PM's solicitors, Irwin Mitchell LLP, sent representations challenging the decision and ultimately served a letter before action alleging failures to provide reasons, disclosure failures, and breach of the duty of candour. Following contested disclosure proceedings, the CPS agreed to discontinue the prosecution in favour of a youth caution. The judicial review proceedings were withdrawn on terms that the DPP pay PM's reasonable costs, to be subject to detailed assessment if not agreed.

The Bill of Costs was served at £83,135.60, with Notice of Commencement issued on 2 July 2024. On 17 April 2025, the Claimant served a Part 36 offer to accept £65,542.57 inclusive of interest, with the relevant period expiring on 8 May 2025. The Defendant rejected the offer. At the detailed assessment hearing, the judge gave ex tempore rulings on two preliminary issues (interest and hourly rates). The parties then negotiated and reached agreement for the Defendant to pay £65,000 in respect of costs claimed (excluding interest and the costs of assessment). With interest calculated at £2,651.74, the total sum recovered exceeded the Part 36 offer.

The dispute that then arose was whether this consensual conclusion triggered the enhanced costs consequences under CPR r.36.17(4).

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The Part 36 Framework in Detailed Assessment

CPR r.47.20(4) adapts Part 36 for detailed assessment proceedings, substituting key terms: "claimant" becomes "receiving party," "defendant" becomes "paying party," "trial" becomes "detailed assessment hearing," and critically, "judgment being entered" is equated with "completion of detailed assessment." Rule 47.20(7) further provides that detailed assessment proceedings are to be regarded as "an independent claim."

The Defendant advanced two principal arguments. First, that it did not intend the agreement to trigger Part 36 consequences and would not have agreed had it known this would follow. Second, and more fundamentally, that a consensual agreement without judicial determination of every issue could not constitute "judgment" for Part 36 purposes — the assessment had not truly been "completed" in the manner the rules envisage.

The Claimant argued that the consequences followed automatically once the sum recovered exceeded the Part 36 offer, that the Defendant could have made exclusion of Part 36 consequences a term of the settlement but failed to do so, and that CPR r.47.20 contained no requirement for judicial determination of every point.

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Consent Orders as "Judgments"

Deputy Costs Judge Latham resolved the central question by reference to recent Court of Appeal authority. In Smithstone v Tranmoor Primary School [2026] EWCA Civ 13, Bean LJ had considered the nature of consent orders, drawing on Vanden Recycling Limited v Kras Recycling BV [2017] EWCA Civ 354, where Hamblen LJ held:

> "Although the Consent Order does not use the wording of adjudication or judgment, the order it makes is to the same effect as one which would be made following a judgment."

> "Since in substance and in effect the order for payment made by the Consent Order is the same as would be made following a judgment I consider that the judge was correct to conclude that it is to be treated as a judgment."

Bean LJ in Smithstone put the matter beyond doubt:

> "I have no doubt that it is both a judgment and an order and any attempt to distinguish between the two terms in describing it is misconceived."

Applying this reasoning, Deputy Costs Judge Latham held that when the parties returned to court, informed the judge of their agreement as to costs quantum, and the judge completed the assessment on those terms — whether by judgment, order, or costs certificate — "the effect was the same. Judicial determination is not a necessary feature."

The Judge stated plainly: "Using the language in CPR r.47.20, the detailed assessment was 'completed' by consent."

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The Consequences and the Unjustness Safeguard

Having found that Part 36 consequences applied in principle, the Judge noted that the Defendant had made no submission that it would be unjust for the consequences to follow under CPR r.36.17(5). The court was therefore required to order, unless it would be unjust:

Interest at up to 10% above base rate on the awarded sum from expiry of the relevant period
Costs on the indemnity basis from expiry of the relevant period
Interest on those costs at up to 10% above base rate
An additional amount of up to £75,000 (10% of £65,000 = £6,500)

The Judge was notably unsympathetic to the Defendant's subjective intentions:

> "All parties negotiating the conclusion of detailed assessment (or indeed any other) proceedings should be aware of any effective Part 36 offers."

The parties were invited to agree an order reflecting the judgment, with a short hearing to resolve any disputed quantum of detailed assessment costs.

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Key Takeaways

For Solicitors

1. Part 36 consequences survive consensual settlement — A paying party cannot avoid Part 36 consequences simply by reaching a negotiated settlement at the assessment hearing. If the sum agreed exceeds the receiving party's Part 36 offer, the enhanced consequences follow automatically unless the court finds it would be unjust.

2. Negotiate with Part 36 offers in mind — Before agreeing any figure at a detailed assessment hearing, paying parties must check whether any effective Part 36 offer has been made and factor the potential consequences into their settlement calculations. If you wish to exclude Part 36 consequences, this must be an express term of the agreement.

3. Make timely Part 36 offers in detailed assessment — This decision confirms that Part 36 is a powerful tactical weapon in detailed assessment proceedings. Receiving parties should consider making offers that are realistic but slightly below the likely assessment outcome, forcing the paying party to weigh the enhanced consequences risk.

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Conclusion

PM v DPP provides an authoritative ruling on a question that has lurked in detailed assessment practice: can a paying party sidestep Part 36 consequences by settling rather than proceeding to full judicial determination? The answer is a clear no. The decision, grounded in Court of Appeal authority on the nature of consent orders, confirms that "completion" of a detailed assessment for CPR r.47.20 purposes includes completion by consent.

The practical implications are significant. Paying parties must now approach settlement negotiations at detailed assessment hearings with full awareness of any outstanding Part 36 offers. The Defendant's plea that it did not intend the settlement to trigger these consequences received short shrift — ignorance of the rules is no defence. For receiving parties, the decision reinforces the value of making well-pitched Part 36 offers early in the assessment process, knowing that the enhanced consequences will follow whether the assessment concludes by judicial determination or by agreement.

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Citation: PM, R (On the Application Of) v Director of Public Prosecutions [2026] EWHC 419 (SCCO)

Full judgment available at: BAILII

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