Source: http://www.9parkplace.co.uk/news-and-events/2012/06/28/recent-case-on-part-36-offers-a-statement-of-the-obvious/
Timestamp: 2013-05-20 07:31:33
Document Index: 682333039

Matched Legal Cases: ['art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36', 'art 36']

Recent case on Part 36 offers: a statement of the obvious?
From a contractual point of view there may have been a residual unease that the procedural code of CPR part 36 modified in certain respects the well-established common law rules that an offer lapsed when rejected or if not accepted within a reasonable time after it had been made. CPR 36.9(2) for example provides that a part 36 offer may be accepted “at any time (whether or not the offeree has subsequently made a different offer) unless the offeror serves notice of withdrawal upon the offeree”, although the court’s permission will be required to accept an offer in the circumstances set out in CPR 36.9(3). It follows from those provisions that a part 36 offer will remain capable of acceptance (a) even after it has been rejected, (b) even after the period of 21 days has elapsed, within which the Defendant will be liable for the claimant’s costs under rule 36.10 if the offer is accepted and (c) unless it has been expressly withdrawn by the offeror. Of course, if a part 36 offer is to have the automatic costs consequences specified in CPR 36.14 upon judgment being entered, then it must not have been withdrawn before that time, because rule 36.14(6)(a) expressly states that those automatic costs consequences do not apply to a part 36 offer “that has been withdrawn”. These provisions led to an interesting and rather novel situation in the case of Joyce v West Bus Coach Services Limited [2012] EWHC 404 (QB) (Kenneth Parker J), decided in March 2012, where the Claimant sought to take advantage of the terms of CPR 36.9(2) that a part 36 offer may be accepted “at any time” unless a notice of withdrawal has been served. This case provided an unusual example of what may appear to be a conflict between the provisions of the Civil Procedure Rules in relation to striking out a statement of case upon the making of an unless order and the provisions of Part 36 itself.
This case involved a claim for damages arising out of a road traffic accident, where the damages claimed represented the balance of hire charges for a replacement vehicle for the Claimant over a 10 week period. The Defendant admitted liability but disputed quantum, and made a part 36 offer to settle the claim. This offer was not accepted. Exactly one year after the offer had been made, the Claimant failed to comply with an “unless” order for service of its disclosure statement. By reason of the Claimant’s default in complying with the “unless” order, the Defendant then wrote to the Court, and asked the Court to strike out the claim. Some 7 days after the date of the Defendant’s request to the Court, the Claimant tried to accept the Defendant’s part 36 offer of a year earlier, which had not been withdrawn in the interim period. If the offer was then capable of acceptance, the Claimant’s acceptance of the offer would, under the terms of CPR 36.11(1), have then resulted in the claim being stayed. In fact, the Court ordered that the claim be stayed, although that order was subsequently set aside by the district judge, and the claim was ordered to be struck out in accordance with the terms of the earlier “unless” order. The order striking out the claim was the subject of an appeal by the Claimant to the circuit judge and then, as a second appeal, to the high court judge. One of the issues for determination on the second appeal was whether the Part 36 offer remained effective and capable of acceptance after the claim had been struck out for the Claimant’s failure to comply with the terms of the earlier unless order.
The High Court Judge (Kenneth Parker J) noted that there was some tension between the provisions of CPR 36.9(2), set out above, and CPR 36.11, which does not state expressly, but implies, that a part 36 offer cannot be accepted where there is in substance no claim left to be pursued. The judge noted that the position was clear: where a claim had been dismissed or judgment had been entered on a claim, that precluded the acceptance of a part 36 offer in relation to that claim because the claim was then at an end in such circumstances. The question might be thought to be less clear where the claim had not been dismissed by an order of the court and judgment had not yet been entered. However on a proper interpretation of the rules and giving effect to the overriding objective, it was held that the rules prevent the acceptance of a part 36 offer in circumstances where the claim had not been dismissed by an order of the court and judgment had not been entered but the claim was in substance at an end. Accordingly the Claimant’s attempt to accept the part 36 offer after the claim had been struck out failed. When looked at objectively, this outcome clearly accords with the overriding objective, with the policy of the court’s case management powers and with common sense. It could not be correct in principle that where the substantive claim had been struck out for failure to comply with an unless order, the claim could nonetheless somehow survive in the abstract if only to allow a part 36 offer in relation to that claim (of which the court incidentally would have been unaware) to be accepted. This decision, albeit unusual on its facts, brings further clarity to the operation of the Part 36 regime. The message is clear: if a claim has been struck out for procedural default, it cannot be rescued by a subsequent attempt to accept a part 36 offer. Richard Kember