CIVIL PROCEDURE BACK TO BASICS 84: HOW NOT TO MAKE A PART 36 OFFER THAT IS NOT VALID:
You may not care to believe it but the title of this post is deliberate, there is a double negative and a lack of clarity. This reflects the ambiguities and uncertainties in many of the attempts at Part 36 offers we have looked at on this blog over the years. There have been “creative” efforts made to add to or supplement offers, which have often led to the offer not being valid under Part 36.
TO GET PART 36 BENEFITS THE OFFER HAS TO BE VALID
It is of vital importance that the offer is a valid one. As was seen in Essex County Council v UBB Waste (Essex) Ltd (No. 3)  EWHC 2387 (TCC) there is no principle of “estoppel” that applies to Part 36. It is either a valid offer under Part 36 or it is not. Mr Justice Pepperall stated:-
“I consider that, as a matter of policy, the responsibility for ensuring that an offer is compliant with Part 36 should lie squarely upon the offeror and his lawyers.”
LET’S LOOK AT THE RULES
Form and content of a Part 36 offer
(1) A Part 36 offer must—
(a) be in writing;
(b) make clear that it is made pursuant to Part 36;
(c) specify a period of not less than 21 days within which the defendant will be liable for the claimant’s costs in accordance with rule 36.13 or 36.20 if the offer is accepted;
(d) 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; and
(e) state whether it takes into account any counterclaim.
(Rule 36.7 makes provision for when a Part 36 offer is made.)
(2) Paragraph (1)(c) does not apply if the offer is made less than 21 days before the start of a trial.
(3) In appropriate cases, a Part 36 offer must contain such further information as is required by rule 36.18 (personal injury claims for future pecuniary loss), rule 36.19 (offer to settle a claim for provisional damages), and rule 36.22 (deduction of benefits).
(4) A Part 36 offer which offers to pay or offers to accept a sum of money will be treated as inclusive of all interest until—
(a) the date on which the period specified under rule 36.5(1)(c) expires; or
(b) if rule 36.5(2) applies, a date 21 days after the date the offer was made.
(1) Subject to rules 36.18(3) and 36.19(1), a Part 36 offer by a defendant to pay a sum of money in settlement of a claim must be an offer to pay a single sum of money.
(2) A defendant’s offer that includes an offer to pay all or part of the sum at a date later than 14 days following the date of acceptance will not be treated as a Part 36 offer unless the offeree accepts the offer.
WHERE DOES IT ALL GO WRONG?
Here is a flavour of some of the posts on this site about the validity, or otherwise, of Part 36 offers.
- Is this a Part 36 offer I see before me? That’s an important question
- Another case where there was an invalid Part 36 offer.
- Defective Part 36 offer meant claimant did not obtain Part 36 benefits: why claimants should draft their Part 36 offers carefully.
- A “Part 36 offer” that attempts to vary usual costs consequences is not a Part 36 offer at all: High Court decision.
The central themes is often an attempt by the maker of the offer to get something “different”, or better for their client. They ending up with getting a poorer result.
IF YOU WANT TO BE SAFE USE THE FORM
The safest, indeed perhaps the only safe, way to ensure a Part 36 offer is to use the form, and fill it in correctly. As we have seen even a minor variation in the wording of an offer can lead to lengthy argument as to whether it is valid or not. In the Essex case the offer failed to refer to 21 days after service and there was a lengthy argument as to whether this rendered it invalid.
Form N242A should be every litigator’s friend. Read it, know its contents and use it carefully.