UK: Settlement – How To Accept Part 36 Offers

Sutton Jigsaw Transport Limited v Croydon LBC [2013] EWHC 874

Part 36 of the CPR provides a mechanism whereby parties are encouraged to settle claims – a party who does not accept a Part 36 settlement offer may be subject to additional costs and interest. The ruling in this case confirms that parties must strictly adhere to these rules if they wish to obtain the benefits of Part 36.

Sutton Jigsaw related to the claimant's application under CPR 36.9 (3) for permission to accept a Part 36 offer put forward by the defendant. The claimant initially sought to accept the Part 36 offer during the first day of trial by handing the defendant's barrister a handwritten note during a short adjournment. Two minutes after the claimant's purported acceptance, the defendant faxed a letter withdrawing the Part 36 offer to the claimant's solicitor's office (the claimant's nominated address for service).

The defendant alleged that there had been no valid acceptance of the Part 36 offer before it was validly withdrawn by the fax. In particular, the defendant argued that the acceptance did not comply with CPR 36.9(1) (which provides that a Part 36 offer is accepted by serving written notice of the acceptance on the offeror) as the claimant had not sent its written acceptance to the defendant's nominated address for service.

The court held that the claimant's purported acceptance was invalid as the acceptance provisions in CPR 36 had not been complied with. The ruling of Judge McKenna confirmed that:

• The CPR provides clear rules with regards to the acceptance of Part 36 offers, namely:

• In the absence of exceptional circumstances as to why the claimant did not accept the defendant's offer in accordance with the rules for acceptance, to permit the claimant's purported acceptance of the defendant's offer would give the claimant, who did not comply with the rules provided for service or acceptance of a Part 36 offer, an unfair advantage over the defendant, who did comply with the rules.

Comment

This case provides a pertinent reminder that courts will be reluctant to deem Part 36 offers to have been accepted unless acceptance has been made in compliance with the CPR. In this case Judge McKenna was uncompromising in stating that both parties should be taken to know the rules and should comply with them if they wish to be bound by the consequences of Part 36.

It is noteworthy that the court reached this conclusion even though, arguably, given the parties' representatives and lawyers were at court, it was overly legalistic not to accede to the claimant's application. However, it is clear from this decision that the court was more concerned with not giving the claimant an unfair advantage over the defendant (who had complied with CPR 36 when withdrawing its offer).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.