The High Court considered the issue of whether a settlement offer expressed to be open for acceptance for a limited period of time can be a Part 36 offer, and so attract the consequences of such offers, in C v D and D2  EWHC 2940 (Ch).
In order for a settlement offer to attract the costs consequences set out in CPR Part 36, the offer must be made in accordance with CPR 36.2. As regards acceptance of a Part 36 offer, CPR 36.9(2) provides that such an offer “may be accepted at any time … unless the offeror serves notice of withdrawal on the offeree”.
In this case, the Claimant had written to the Defendant making an offer to settle and the letter had included the phrase “the offer will be open for 21 days from the date of this letter”. This period expired on 31 December 2009. The letter also stated that it was intended to have the consequences set out in Part 36. The Defendant accepted the offer on 5 November 2010, only a few weeks before the trial was due to start and almost a year after the offer was made. The Claimant applied for a declaration that the offer was no longer open for acceptance on 5 November 2010, and that the Defendant’s purported acceptance was therefore not effective. The Defendant argued that the offer was still open for acceptance at this date because a notice of withdrawal had not been served. The offer had, the Defendant submitted, been validly accepted and there was no need for the matter to go to trial.
The court held that the letter was not a Part 36 offer, rather it was a valid time-limited offer which was not open for acceptance on 5 November 2010. Warren J noted that if the words used in an offer letter are not entirely consistent with Part 36 then that Part does not apply, regardless of the intention of the offeror. On the issue of whether a time-limited offer is capable of being a Part 36 offer, Warren J concluded that it is not. A Part 36 offer must be capable of acceptance unless and until it is amended or withdrawn.
This case highlights the need both to keep Part 36 offers under review, and to ensure that any settlement offer is very carefully drafted.