In a consequential matters judgment handed down on 19 October 2021, the High Court ruled on the correct interpretation of the liability cap in the share sale agreement ("SSA") and the cost consequences of the Part 36 offer.
The court held that the contractual cap on liability for breach of warranty claims under the SSA did not capture ancillary liabilities such as costs. The liability cap applied only to any damages awarded in respect of a breach of warranty claim.
The court also held that it is an ordinary consequence of the Part 36 regime that an enhanced rate of interest is payable on the amount awarded at trial and not the amount that the offeror was prepared to settle for. The court observed that parties often have to consider a Part 36 offer "without all pieces of the jigsaw in place" and "[m]uch of the purpose of Part 36 would be lost if it were otherwise".