Costs News

14 June 2018
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Judge allows defendant’s acceptance of £950 part 36 offer after claim value increased to £125k

A claimant that left a £950 part 36 offer open has failed to overturn the defendant’s eventual acceptance of it after the claimant had increased the claim to £125,000.

The details of Hogg v Newton, decided last month by His Honour Judge Gargan in Sheffield, come from a report on the website of defendant law firm DAC Beachcroft.

The claimant submitted their claim for personal injury and credit hire through the MoJ portal in May 2012. In February 2013, the claimant's solicitors made a part 36 offer of “£1,600 in full and final settlement of this claim”. It was elsewhere within this letter expressed to be for “the whole of our client's claim”.

In March 2014, the personal injury element of the claim had been settled at a net sum of £650, reducing the residual value of the part 36 offer to £950. Proceedings were issued almost two years later after a change of solicitors, including losses pleaded at over £125,000, with a hire claim of over £122,000.

In July 2016, noting that offer was still effective and had not been withdrawn, DAC Beachcroft accepted the offer in full and final settlement of the whole of the claim in the net sum of £950. After making the payment six days later, the defendant applied for a declaration that the claim had been compromised. District Judge Read agreed, as did HHJ Gargan on appeal.

The claimant argued that its offer did not fall within part 36 as it did not contain the wording in that provision. But HHJ Gargan ruled that the reference in the letter to the claimant “seeking the full sanctions available under part 36” was sufficient and that a reasonable man (or insurer) would have read the relevant passage as being part of a valid part 36 offer.

Similarly, the court found that it was sufficient that the 21-day period had been referred to within the offer and that it was unnecessary for the offer to set out the exact text in the rule in full.

The judge continued that settlement of part of the claim did not revoke the part 36 offer. It had not been withdrawn in writing as required by rule 36.9(2), while the conclusion that the offer remained open was more consistent with the overriding objective.

The claimant finally argued that the part 36 offer was for the personal injury claim only and could not relate to any other heads of claim, including credit hire. HHJ Gargan agreed with District Judge Read that, in the absence of some special factor, the natural meaning must be given to “the whole of our client's claim”, such that it could not be found that the offer excluded the claim for credit hire. 

 

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