CLAIMANT’S PART 36 “SUBJECT TO A NIL CRU” WAS A VALID OFFER: IF THE DEFENDANT WAS CONFUSED THEY SHOULD HAVE SOUGHT CLARIFICATION

The judgment of District Judge Hickinbottom in Gibbons -v- Rotherham Doncaster and South Humber NHS Foundation Trust (o4/06/2019), discussed in an earlier post, also has an interesting section in relation to a Part 36 offer.

“It seems to me the Defendant could have used 36.8 and asked for clarification if they were not clear.  They did not do that.”

THE CASE

The claimant had succeeded at trial and had beaten a Part 36 offer that had been made.  The defendant argued that the Part 36 offer was defective in that it stated that it was “subject to a nil CRU” and therefore ambiguous. The defendant had not sought clarification of the terms of the offer.

THE JUDGMENT ON THE PART 36 POINT

The judge rejected the defendant’s argument that the Part 36 offer was not valid.  If the defendant was seriously arguing that they did not understand the terms of the claimant’s offer there was a clear mechanism within CPR Part 36 which would have allowed it to ask for clarification.

  1. I now deal with the second issue before the court in this hearing, which is the dispute arising out of Part 36 offers that were made by the Claimant.
  2. The Claimant made a number of Part 36 offers, the first on 23rd January 2018 for £3,500 and it is accepted between the parties that that offer was not beaten and therefore is not relevant. A second offer was made on 13th November 2018 for £2,500. It is accepted that the second offer bites, subject to whether or not it is valid, on the basis that the damages were assessed at just over £3,000 and then inclusive of interest, some £3,302.20.
  3. The issue that the defendant takes with the offer is that that offer and a subsequent offer made on 12th December 2018 for £1,750 was expressed in terms that it was subject to a nil CRU.
  4. I had seen skeleton arguments prior to the hearing commencing. This was dealt with very briefly in the Defendant’s skeleton argument, simply saying that the offer was conditional.  The representative of the Defendant today has attempted to expand upon that, and I am not sure it has really made matters much clearer as far as I am concerned as to exactly what the Defendant is saying about that matter.
  5. It appears that the Defendant is in part saying that there is an inconsistency in respect of 36.5 where it says at (d) that you have got to state whether it relates to the whole of the claim or to part of it, or to an issue that arises in it, and if so, to which part or issue. The Claimant says, as was stated on the offer, that the offer relates to all of the claim, but the Defendant says it does not in fact relate to all the claim because there is the CRU and the level of that is unclear at that stage.
  6. It seems to me in relation to that objection, that that does not take the matter much further forward as far as the Defendant is concerned. It is an offer in relation to the whole of the claim.  The fact that it leaves an element that may be unclear as to what the liability is for the defendant does not mean that it is not a valid offer, and it does not mean that it is not an offer that relates to the whole of the claim.
  7. I have heard some very brief submissions today in relation to whether or not a Part 36 offer has to have certainty of terms. Counsel on behalf of the Claimant says that Part 36 is a self-contained regime and that ordinary contractual principles do not apply.  The Defendant says simply, the terms have got to be certain.
  8. It seems to me that the reality is, and the case law shows that certain contractual principles do not apply to Part 36 offers and certain contractual principles do apply. It is right to say that where Part 36 provides for a certain regime for a particular matter, and that is in contradiction to ordinary contractual principles the Part 36 regime prevails. However, some contractual principles, such as that of mistake, can apply within the Part 36 regime.  However, in addition to the dispute over the extent to which ordinary contractual principles apply to Part 36 offers, there is also a dispute in this case over whether or not there is in fact any uncertainty of terms.
  9. What I do note is that at 36.8 there is the following provision: “The offeree may within seven days of a part 36 offer being made, request the offeror to clarify the offer. If the offeror does not give the clarification requested under paragraph 1 within seven days of receiving the request, the offeree may, unless the trial has started, apply for an order that the offeror do so”. 
  10. So, it seems to me, if the Defendant’s contention is: “Well, we could not accept this offer because we did not know what it meant”, there was a proper procedure for them dealing with that within Part 36. In any event, it seems to me that those offers are not unclear and uncertain, because effectively what they mean is that the Claimant gets the £1,750 or the £2,500 and that there are no deductions from that compensation as a result of CRU.  That would be the understanding that I would have, and as I say, if the Defendant was not clear, there was a provision within Part 36 for them to clarify what was meant by that.
  11. In any event, Part 36 does allow for the consequences of a Part 36 offer not to be applied in circumstances where it would be unjust to do so. It seems to me that there could be arguments put forward by an offeree in circumstances where they said that the offeror’s offer was not certain for them to make arguments for the disapplication of Part 36 consequences.
  12. As a result of that, in fact, at 36.1.7, where it looks at whether or not it would be unjust to allow the Part 36 consequences follow, one of the considerations is the terms of any part 36 offer, and another is, at d): “The conduct of the parties with regard to the giving of or refusal to give information for the purposes of enabling the offer to be made or evaluated”.
  13. So it is clear that the regime provides for parties to clarify offers and for the Court to consider whether or not Part 36 consequences should in fact follow and that could be where an offeree says that there is some uncertainty about the terms or that there was a failure to provide adequate information. However, I do not think that the offer’s terms are uncertain.  It is clear that Part 36, in any event, allows for terms to be clarified.  If the Defendant had so wished they could have asked the Claimant to clarify, they could have asked the Claimant to confirm the position in respect of CRU.  It seems to me that whilst the wording of that is, subject to a nil CRU, I do not read that as it is a condition as such.  It seems to me that that is the way in which the Claimant has set forward the offer is that they do not anticipate there will be any deductions from the amount that the Claimant gets in his pocket as a result of acceptance of that offer. The only uncertainty, as such, is as to the level of the CRU but that does not mean the terms of the offer are unclear. The Defendant could accept the offer accepting the risk of the CRU, or could seek clarification as to the level of the CRU.
  14. So, for all of those reasons, I find that it is a valid Part 36 offer. Having raised the issue of whether or not the consequences should then apply, I am going to go on and deal with that.  It seems to me the Defendant could have used 36.8 and asked for clarification if they were not clear.  They did not do that.  So when looking at 36.1.7, the terms of the offer and the conduct of the parties, it seems to me that it is clearly not unjust to award part 36 consequences, because it was very much within the Defendant’s hands to clarify the position if they had wanted to.  However, they did not, they did not do anything about it. It is not, therefore unjust for the part 36 consequences to follow.  So, in those circumstances, the £2,500 and the £1,750 are both valid offers.  I think the parties are not particularly interested in the 12th December 2018 offer of the 90/10 split, but it seems to me that where that would bite is in respect of the whole of the claim, in terms of being more advantageous.  The Claimant will have beaten an offer.  I would not separate out liability and quantum in respect of that.  I am not sure upon what authority that would occur, but in any event, that is perhaps beside the point, given what I have said about the other two offers.