High Court rules that $3m offer was made in time and usual consequences should follow
The first day of a trial is “the first day that the parties attend on the court with their lawyers”, the High Court has ruled in a dispute over whether a claimant’s part 36 offer was made at least 21 days before trial.
Awarding costs to the claimant, Mr Justice Calver said that judicial reading days were not included in assessing when a trial begins because they can change, while the date of the trial “was known to the parties and fixed”.
In Gagliardi v Evolution Capital Management LLC [2025] EWHC 3488 (Comm), the High Court heard that trader Robert Gagliardi made a part 36 offer of $3m to settle his claim against his employer, hedge fund Evolution Capital Management, on 12 September. He was awarded $5.38m at trial.
Rule 36.17(7)(c) provides that the part 36 rules do not apply to offers made less than 21 days before trial.
Evolution argued that the first judicial reading day was 1 October, and so this was when the trial began according to the Commercial Court Guide. As a result Mr Gagliardi’s offer was made 18 days before the start of the trial and so he would not be entitled to part 36 benefits.
But Calver J said the fact that the guide had “for practical reasons, deemed the first day of judicial pre-reading to be the start of the trial” did not mean that the part 36 rules should be construed “in an unnatural way”.
He said counsel for the claimant was right to argue that the guide “does not purport to and could not affect” when a trial commenced for the purposes of a part 36 offer.
“It would be odd, and contrary to the desirability of certainty as to the effect of a part 36 offer if part 36, which operates as a self-contained code in relation to all civil proceedings in all divisions, were to have a different interpretation as to when a trial commenced based upon a particular court guide or practice, particularly where that practice can change from time to time, as indeed it did in 2022 in the Commercial Court.”
Calver J held that the start of the trial, 6 October 2025, was known to the parties and fixed.
“That provides certainty. Judicial reading days, on the other hand, can change. If asked when did the trial begin, I consider that a reasonable onlooker would no doubt say ‘6 October’, being the first day when all the parties turned up at court with their legal teams ready to begin the trial. That is how I consider that the rule should objectively be construed.”
He went on to find that the defendant had not established it would be unjust for the part 36 consequences to follow; the court was told that the “limited effects” in this case, given the late offer, “may make the difference of something like $200,000”.
The claimant went on to seek indemnity costs but Calver J only allowed them in respect of the defendant’s counterclaim because of the way it was pleaded, including the allegation that Mr Gagliardi’s behaviour was “disreputable”.
Calver J rejected an argument by Evolution that Mr Gagliardi’s costs should be reduced by 10% in relation to disclosure.
He rejected Evolution’s application for permission to appeal.
Andrew Legg and Gretta Schumacher (instructed by PCB Byrne) for the claimant. Paul Downes KC and Emily Saunderson (instructed by Hogan Lovells) for the defendant.