Claimant argues that its own purported “Part 36 offer” was invalid

06-01-2012 09:08

In Thewlis v Groupama Insurance Company Ltd [2012] EWHC 3 (TCC) (05 January 2012) the court was asked to consider whether an offer made by the claimant purporting to be a Part 36 offer was a valid part 36 offer and if so whether it was capable of acceptance by the defendant even after it was expressly rejected.

The claimant’s offer letter was dated 24 September 2008 and made before proceedings were issued. The offer was rejected by the defendant on 1 October 2008. Proceedings were subsequently issued on 25 May 2011 and on 17 October 2011 the defendant purported to accept the offer in settlement of the whole claim and sought a declaration from the court to the effect that proceedings have been stayed pursuant to Part 36.

The claimant sought to argue that the letter was not a valid part 36 offer as, firstly it argued that the letter failed to comply with Part 36(2)(b) in that it did not say on its face that it was intended to have the consequences of Part 36. Secondly, the claimant submitted that the letter was inconsistent with Part 36 because the letter provided that, after 21 days, the offer set out in the letter could only be accepted "if we agree the liability for costs or the court gives permission".

The defendant argued that when the letter is read as a whole it refers to Part 36 in two places, one in bold type, and that it was plainly intended to be a Part 36 offer. The defendant also referred to the letter’s heading (which contained reference to Part 36), the other reference to Part 36 in the letter, the requirement to pay the reasonable costs and the statements that the sum claimed was inclusive of interest and that it relates to the whole of the claim. The defendant argued that all of these are features of Part 36 and thus show that the letter was intended to have the consequences set out in Part 36.

His Honour Judge Behrens considered a number of recent cases involving the interpretation of Part 36 and held that as rule 36.2 uses the word "must", failure to comply with rule 36.2 is fatal. His Honour Judge Behrens held that the letter of 24th September 2008 does not comply with rule 36.2 and is not therefore an offer within Part 36.

His Honour Judge Behrens went on to find that the limitation placed on the offer after the expiration of 21 days to provide that the offer could only be accepted "if we agree the liability for costs or the court gives permission" is inconsistent with a Part 36 offer and therefore as a matter of construction this offer was not open for acceptance after 21 days and it was not accordingly a Part 36 offer.

This decision may be somewhat surprising given the court’s recent approach to the interpretation of Part 36 and purported Part 36 offers which appears to have been to attempt to construe (where appropriate) an attempted Part 36 offer as a valid Part 36 offer.

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