Gibbon v Manchester City Council; LG Blower Specialist Bricklayer Ltd v Reeves  EWCA Civ 726
The Court of Appeal has given judgment in two appeals concerning important questions about Part 36. In Gibbon, the court considered whether a Part 36 offer lapses on its rejection (in accordance with general contractual principles) or whether it lives on until the offeror has served a notice of withdrawal. In LG Blower, the court concentrated on the concept of a “more advantageous judgment”.
In Gibbon, the council had purported to accept a Part 36 offer from Mrs Gibbon. However, since she had made that offer, the council had: (i) already rejected it once; and then; (ii) made two offers of its own (including one of the same sum as Mrs Gibbon’s offer), which Mrs Gibbon rejected. On a normal contractual analysis, it is clear that Mrs Gibbon’s offer no longer stood – as it had been rejected by the council, and impliedly withdrawn by Mrs Gibbon’s rejection of the council’s equivalent offer. However, Moore-Bick LJ said that Part 36 was a “self-contained code” and held that a Part 36 offer may be accepted at any time unless the offeror has withdrawn the offer by serving a notice of withdrawal. Mrs Gibbon had not done this, and accordingly, her offer stood and the council was entitled to accept it.
In LG Blower, the key question was the extent to which the idea of a “more advantageous” judgment should take into account factors such as irrecoverable costs and emotional stress. Earlier judgments of the court had held that such factors should be taken into account, but Carnwath LJ in particular expressed some scepticism as to how workable such an approach was. He said that success in fi nancial terms would be the governing consideration in most cases, as he shared “the diffi culty of some commentators in seeing how the court can sensibly make a judgment of such factors as pre-trial stress or other personal factors as part of an overall objective assessment of overall advantage”.
The approach of the court to these questions emphasises strongly that Part 36 is a carefully structured regime with a particular purpose. Parties wishing to use it (rather than making offers outside the regime) must be alive to its strict procedural requirements. It enables parties to manage their costs risk with some degree of precision – but in order to take advantage of the certainty that Part 36 offers, its rules must be carefully followed.