To the Editor,

When I read the letter from District Judge John S Merrick MCIArb, I immediately turned to my copy of the January issue of the Newsletter, page 33, and reread my article The Judiciary – they’re only human. Having done so, I am hoping that John’s letter will inspire other readers to do the same.

To the Editor

I read with interest Peter Horne's article in the last Branch Newsletter, especially with regards to the possible effects of a Claimant's offer, akin to that referred to in the Civil Procedure Rules (CPR) Part 36. I agree with Peter that s61(2) of the Arbitration Act (AA) is probably worded widely enough to enable arbitrators to take into account a properly made Claimant's offer when considering liability as to costs. However, there are two more difficult questions with regards to Claimant's offers that I would be interested to know members’ views on.

The first is: does the existence of a Claimant's offer that is subsequently bettered enable the arbitrator to order that some of the Claimant's costs be paid on an indemnity basis as allowed for in CPR 36.21(3)(a)?  In other words is the existence of a Claimant's offer sufficient reason to vary the general rule set out in S63(5) of the AA?

A second, and to my mind more interesting, question concerns the evaluation of interest.  In the past interest has been considered to be compensatory in nature, but CPR 36.21(3)(b) has introduced the possibility of higher, some would say "punitive", interest being awarded against the Respondent if they do not accept a Claimant's offer which is subsequently bettered.  Does an arbitrator have similar powers to increase the rate of interest awarded after a Claimant's offer has been rejected?  In order to do so, under S49(3) of the AA, the arbitrator will need to be satisfied that such an award "meets the justice of the case".  I accept that the mere existence of a Claimant's offer that is bettered will not necessarily automatically mean that the "justice of the case" requires the award of interest at a higher rate, hence the use of the word "may" in CPR36(3).  However, in some cases it may be that the Respondent's actions in rejecting a Claimant's very reasonable early offer that was subsequently well beaten, in order to force them into an expensive and unnecessary action, can clearly be seen to have been unfair and unreasonable.  In those circumstances can, and should, the arbitrator award interest at a rate higher than that necessary to merely compensate the Claimant, as the courts can under CPR36?

If the answer to my second question is "yes", then it may require changes to the wording of any Claimant's offer made and, more importantly, where such an offer is made, it will require that the arbitrator is specifically asked not to deal with interest as well as costs in the substantive award. 

I would be interested to hear the members’ views on this matter.

Peter Cousins BEng Dip Arb CEng MICE MCIArb

To the Editor

It was a delight for me to read the letter in the previous issue from Geoffrey King, whom I came to know quite well over a period of years. Apart from his distinguished record as Chairman of the Chartered Institute, Geoffrey was a lively member of the Branch, usually ready with a penetrating comment or question.
Indeed, he was a polemicist of the kind that no branch should be without (ideally every branch should have at least two) and I have formed the view that the Branch meetings are not the same without him. I recall the Chairman's evening a few years ago during the days when we met at Croydon Magistrates' Court, where the wine was free and I could travel there on the train, when the Chairman (whose name I withhold for reasons that will become plain) invited the audience to ask questions as his talk proceeded. After he had been going for about ten minutes Geoffrey asked a question. Not being satisfied with the answer Geoffrey asked the question in a different way, whereupon the Chairman, in a display of petulance that was quite unwarranted, and unprecedented in my experience, packed up his papers and left.  I have an abiding memory of his pigtail (I am not making this up) swinging as he went out of the door. I forget what we did for the rest of the evening. This was quite exceptional, as one may imagine. Geoffrey was a catalyst for lively debate, his comments and questions were always courteous although they could be a test of character.

In case you read this, Geoffrey, be assured that I am not the only one who regrets your departure and I trust that you and your wife are now well settled in Australia.

Derek Jerram