4 August 2022

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A stitch in time? Revisiting the ‘relevant period’ under part 36

A High Court master did not find any inherent provision in part 36 for the court to vary or rewrite the period of acceptance of an offer, writes Charlotte Wilk

In Mrs Halima Begum (A protected party by her litigation friend Mr Farid Akhtar) v Barts Health NHS Trust [2022] EWHC 1668 (QB), it was held that the court has no jurisdiction to extend the “relevant period” under part 36.

Background

The claimant alleged a negligently delayed diagnosis in early 2017 and expert evidence was commissioned. In pre-action correspondence, the defendant admitted breach of duty but denied causation. On 3 March 2022, the defendant made a part 36 offer of £100,000 gross of recoverable benefits.

The offer expressly stated that the defendant would be responsible for the claimant’s costs if accepted within 21 days of service; if the offer were to be accepted any time after 24 March 2022, then “liability for costs must be agreed between the parties or decided by the court”.

This judgment concerned a pre-issue application by the claimant to the court that (i) time for acceptance of the offer dated 3 March 2022 be extended to 24 November 2022 and (ii) if the offer was accepted by 24 November 2022, the defendant would be responsible for the claimant’s costs in accordance with CPR 36.13.

The usual rule is that the claimant pays the defendant’s costs if the offer is later accepted (or not beaten at trial); the claimant must show that the usual order “would be unjust” (CPR 36.17(5)) in order for the court to depart from it.

The application raised an important issue concerning the court’s jurisdiction. The defendant denied any such jurisdiction. The claimant relied upon comments in RXL (A protected party by her litigation friend) v Oxford University Hospitals NHS Foundation Trust [2021] EWHC 1349 (QB) and the power of the court under CPR 3.1(2)(a) to shorten or extend the time for compliance with “any rule, practice direction or court order”.

The claimant’s solicitor considered that it was not possible to quantify the claim without further expert evidence to determine causation issues and condition and prognosis, particularly because the applicant was a protected party.

The decision in RXL

This was a decision in which the claimant, a protected party, had accepted a part 36 offer after the relevant period but sought to persuade the court that it should exercise its discretion pursuant to CPR 36.13(4)-(6) and depart from the usual order.

David Pittaway QC, sitting as a High Court judge, refused the application on the basis that the claimant’s legal advisors had sufficient information at the time of the part 36 offer to advise as to its reasonableness. The defendant’s counsel had argued that an application could have been made to the court for an extension of time, but the claimant’s solicitors had failed to do so. The judge considered that it would not be unjust to make the usual costs order as the claimant had been furnished with sufficient information with which to evaluate the offer.

Master Thornett considered that, whilst RXL contemplated the facility of an application to vary the terms of a part 36 offer, the judgment did not expressly identify the procedural mechanism for doing so.

The conclusion on jurisdiction

Master Thornett dismissed the application. He held that the comments in RXL were obiter dicta. As concerned other cases regarding the exercise of discretion under rule 36.13, the issue of what steps might have been open to the claimant did not refer to applying to the court for further time beyond the 21-day period as distinct from requesting it from the defendant.

The Court of Appeal in Matthews v Metal Improvements [2007] EWCA Civ 215 [2007] CP Rep 27 referred to the possibility of asking the defendant for an extension of time for acceptance and suggested that, in the face of refusal for an extension, an application might have been for a stay. There was no mention in this case of a facility to apply to the court to vary the terms of the actual offer. In further cases there has been no suggestion that the claimant has available to them the right to apply to the court to oblige a longer period of acceptance.

As an alternative to the claimant’s primary submission that the court had jurisdiction under part 36 to vary the terms of the offer, it was also submitted that power to do so existed by way of the provisions under rule 3.1(2)(a). Master Thornett accepted the defendant’s submission that this rule was not apt for application to part 36, as such a rule referred to the power to adjust the time for compliance, not to adjust periods of time otherwise featured in the rules.

Practical implications

Crucially, Master Thornett was not satisfied of any inherent provision in part 36 for the court to vary or rewrite the period of acceptance of a part 36 offer. It follows that the court has no jurisdiction to alter the costs consequences associated with the relevant period.

The judgment serves as yet another reminder that part 36 is a “self-contained code”.