Whether or not an offer was a Part 36 offer

http://www.bailii.org/ew/cases/EWHC/Ch/2015/2848.html

An offer was made by the defendant in February 2015 and it was accepted by the claimant. The issue in this case was whether that offer was a valid Part 36 offer or not.

At the time of the offer, CPR r36.2(2) provided that a Part 36 offer must, inter alia:

"(c) specify a period of not less than 21 days within which the defendant will be liable for the claimant's costs in accordance with rule 36.10 if the offer is accepted; and

(d) state whether it relates to the whole of the claim or to part of it or to an issue that arises in it and if so which part or issue."

(The Part 36 rules were modified in April 2015 but, other than a change in numbering, the above rule was not altered.)

The offer in issue in this case was headed "Part 36 offer". However, Morgan J held that it was not in fact a valid Part 36 offer because it did not relate to a part of the claim (since that part was only added after the date of the offer). An argument was raised that, since a Part 36 offer can be made at any time (including before the commencement of proceedings), CPR r36.2(2)(d) should be read as including references to a claim which has not yet been brought but which is subsequently brought after the offer. That argument was rejected by the judge who said that: "As Part 36 is a highly prescriptive and self-contained code, it does not seem to me to be right to add in further provisions on the basis that they would have an analogous effect to the express provisions of Part 36". Accordingly, this was not a valid Part 36 offer as it did not comply with CPR r36.2(2)(d).

However, had the judge been required to decide the point, he would have held that there had been no breach of 36.2(2)(c) in this case.

The offer had effectively said to the claimant that it was up to the claimant whether or not to continue with the balance of the claim (to which the offer did not relate). If the offer was a valid Part 36 offer and the claimant had decided to abandon the rest of the claim, it would be entitled to its costs of the proceedings. If it decided to continue with the balance of the claim after accepting the offer, costs would be decided by the court later on. Here, there had been a reference to 21 days and the offer had stated that the claimant would be entitled to its costs of the part of the claim being introduced by the amendment (to which the offer related), but the defendant had not said what the costs consequences would be if the claimant abandoned the rest of its claim. That did not matter, because "r. 36.2(2)(c) does not require a Part 36 letter to explain the costs consequences of an acceptance; instead it requires the offeror to specify the period within which the offeror will be liable for the offeree's costs in accordance with r. 36.10 if the offer were accepted".