When does time start to run for a contribution claim where a Part 36 offer is accepted?
A third party had brought a personal injury claim against the claimant. The claimant made a Part 36 offer and that was accepted on 4th November 2010. The claim was therefore automatically stayed and a consent order was made on 15th December 2010 (with costs to be agreed). A costs order was subsequently made in September 2011. In January 2012, the claimant’s solicitors wrote to the defendant’s insurers claiming contribution from the defendant. Proceedings were commenced by the claimant against the defendant on 3 December 2012.
The Civil Liability (Contribution) Act 1978 provides, broadly, that a contribution claim must be brought within 2 years of the date of a judgment in any civil proceedings (section 3 of the Act) or, in any case not falling within section 3, the date on which an amount to be paid is agreed (section 4 of the Act). At first instance it was held that the contribution claim was time-barred because time had started to run when the Part 36 offer was accepted. The claimant appealed and the Court of Appeal has now held as follows:
- This case fell under section 4, and not section 3, of the Act. There had been no “judgment” and the consent order did not constitute a “judgment”. Indeed, it was noted that “one of the benefits for a defendant who settles is, at least in the normal run of cases, that he avoids any adverse judgment of the court”.
- Section 4 is focused on the sum paid for the actual damage caused. It does not cover costs, which might be agreed (as they were here) later on. Accordingly, the judge had been correct to hold that time had started to run when the Part 36 offer had been accepted, and the contribution claim was time-barred.