Recent case law has considered the Civil Procedure Rules relating to amending or withdrawing a Part 36 offer. This article summarises the current law and provides a practical example of how the rules are applied.
Amending or withdrawing a Part 36 offer – The Relevant Law
36.3 (5) Before expiry of the relevant period, a Part 36 offer may be withdrawn or its terms changed to be less advantageous to the offeree only if the court gives permission.
36.3 (6) After expiry of the relevant period and provided that the offeree has not previously served notice of acceptance, the offeror may withdraw the offer or change its terms to be less advantageous to the offeree without the permission of the court. 36.3 (7) The offeror does so by serving written notice of the withdrawal or change of terms on the offeree.
36.9 (2) Subject to rule 36.9(3), 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 on the offeree.
The current rules
Following amendments to Part 36 of the Civil Procedure Rules in April 2007, both claimants and defendants need the court’s permission to withdraw or alter a Part 36 offer during the period for acceptance of such offer, but neither claimants nor defendants need the court’s permission to withdraw or alter a Part 36 offer after the expiry of the relevant period. Any change in the offer has to be made by the offeror serving a written notice of the withdrawal or change of terms on the offeree.
If the offer has not been withdrawn it can be accepted after the offer period of 21 days or more without the permission of the court (with very few limited exceptions) even if the parties cannot agree liability as to costs. A Part 36 offer can be accepted by the offeree even after the offeree has made a counter offer.
Amending or withdrawing an offer – a practical example
On 3 September 2009 His Honour Judge Holman considered two appeals which dealt with the acceptance and withdrawal of Part 36 offers (Whistance v Valgrove Limited and Gibbon v Manchester City Council). The facts of Gibbon are simple and provide a useful example of how the rules are applied in practice.
In Gibbon the claimant suffered a personal injury. Liability was admitted and – following sight of the claimant’s medical evidence – the following negotiations took place: please click here to view timeline.
The defendant issued an application for a declaration that the claim had been compromised by a valid acceptance of the claimant’s Part 36 offer. The District Judge concluded that there had been a valid acceptance. The claimant was awarded costs up to 26 February 2009 (with costs from 10 December 2008 being assessed on an indemnity basis). The claimant was ordered to pay the defendant’s costs of the Application. The claimant was given permission to appeal.
The Court of Appeal declined to accept the transfer of the proceedings and therefore the appeal was heard before His Honour Judge Holman sitting at Manchester County Court.
The claimant argued that the defendant had specifi cally rejected the offer made on 18 November 2008 and, in applying contractual principles, there ceased to be an offer capable of acceptance. In the alternative there had been an implied withdrawal of the offer when the claimant invited an increased offer following sight of updated medical evidence.
His Honour Judge Holman did not accept this argument. The central issue in the case was whether a written notice of withdrawal or change of terms was served by the claimant. The judge noted that the January 2009 letter from the claimant’s solicitors did not address the November offer at all nor did it change the terms of this offer. In light of the updated medical evidence it would have been a simple matter for the claimant to have put forward an updated Part 36 offer or, alternatively, state that the November offer was withdrawn. Either way the defendant would have been precluded from accepting the claimant’s November 2008 offer.
In the circumstances the claimant’s appeal was dismissed.
Amending or withdrawing a Part 36 offer – practical considerations
- Keep offers under constant review. If there are developments which strengthen your case or weaken your opponent’s case, consider whether or not you should withdraw or amend any outstanding offers
- Withdrawals or amendments should be in writing. Make your letter as clear as possible and, for the avoidance of doubt, refer to CPR 36.3 (7)
- Bear in mind that if you receive a Part 36 offer which is expressed to be open for acceptance for 21 days (or more) the offer can still be withdrawn before the end of this period if permission from the court is obtained