Houghton (Stanley) v P.B. Donoghue (Haulage & Plant Hire Ltd & Ors) [2017] EWHC 1738 (Ch)

The facts

The claimant accepted the defendant’s Part 36 offer after the trial had started but before judgment had been given. The defendant no longer wished for their Part 36 offer to be available for acceptance but the offer had not been formally withdrawn.

It was seen that the claimant had formed an assessment in respect of the prospects of their claim succeeding, which differed from their earlier assessment so they wished to accept the Part 36 offer that had been made several months previously.

The defendant opposed the Part 36 offer being accepted and the claimant made an application for permission to accept the Part 36 offer.

Decision

The court considered the fact that the claimant had seen the direction that their claim was taking at trial and had changed their view and wished to accept an offer that they had not previously wanted to.

It was stated that there were arguments in favour of the court giving permission for the claimant to accept the Part 36 offer against the defendant’s wishes as court time could be saved and a settlement reached.

It was noted that the claimant had left accepting the defendant’s Part 36 offer to a very late stage mid-trial. The court held that if the claimant was permitted to accept the Part 36 offer, then settlement would be imposed upon an unwilling defendant, who had asked the court to refuse permission. It was borne in mind that the defendant wished to take their chances with the trial continuing and the court would be imposing a settlement which was no longer voluntary.

Mr Justice Morgan stated that “…the philosophy exists that where a claimant decides to take his chances with the trial and then repents his earlier decision to turn down the offer of settlement … the court will often take the view that it is not right to give permission to impose a settlement on the reluctant defendant … that approach does not mean that permission will never be given.

The court held that the claimant had provided insufficient evidence in support of their application and the just result was to refuse permission for them to accept the unwilling defendant’s Part 36 offer.

What this means for you

This case shows that a party can obtain the courts permission to accept an opponent’s Part 36 offer during the course of trial but there needs to be grounds for them to do so. In this case, it was seen that there was insufficient evidence to show that it would be appropriate for the claimant to be allowed to accept the defendant’s Part 36 offer during trial, when the defendant was not willing for them do so.

The claim was already mid-trial and the defendant had made a substantial Part 36 offer in the sum of £330,000, which was made on the basis of being accepted prior to trial. It was also made in order to offer the defendant costs protection in the event that the claimant was unsuccessful at trial and failed to beat the offer. Under these circumstances, the court considered it reasonable for a defendant to want to run the case to a conclusion after the trial had started, when there is the possibility that they will be successful and will not pay anything at all.

It can be seen that the court reached a sensible decision because the claimant had clearly decided that that the trial was going less well and/or more badly than predicted so wanted to accept an offer which was no longer voluntary. As a result, it would have been unjust for the claimant to have been granted permission to accept the Part 36 offer when there was insufficient evidence as to why it should be allowed other than the claimant simply having a change of heart.